P&ID Scandal: Insiders from Shell Company Embroiled in $11-Billion Corruption Case Admit Misconduct
P&ID Scandal: Insiders from Shell Company Embroiled in $11-Billion Corruption Case Admit Misconduct
Print article Published: 06 May 2023
WRITTEN BY OLIVIER HOLMEY
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The co-founder of an offshore firm that won a controversial $6.6 billion arbitration award after arguing that Nigeria failed to fulfill an energy contract has admitted in a London court that the company and its affiliates had previously engaged in financial misconduct and deception –– including unexplained payments to senior officials, and falsifying invoices.
English High Court
At the English High Court, P&ID insiders recognized acts of deception and financial misconduct stretching over close to two decades of business activities in Nigeria. (Photo: Michael Heath/Alamy Stock Photo)
Nigeria has gone to court to contest the 2017 arbitration ruling –– which, with interest, has now almost doubled to $11 billion –– arguing that it shouldn’t have to pay since Process & Industrial Developments Limited (P&ID), registered in the British Virgin Islands, obtained the contract through bribing government officials. P&ID denies any bribery in the gas contract. A decision is expected within weeks.
The case has generated headlines worldwide, but the testimony from the eight-week trial in London sheds unprecedented light on apparent bribery and other questionable business practices by P&ID and its sister company, Industrial Consultants International Limited (ICIL).
Under intense cross-examination by Nigeria’s lawyer, P&ID figures addressed two decades of alleged wrongdoing in the West African nation, including but not limited to the gas dispute.
They testified that employees gained access to privileged government documents, moved undeclared cash across borders, sought to influence a witness, tried to destroy evidence, and did business with individuals they knew to have previously paid bribes.
In a filing near the end of the English High Court trial in March, P&ID conceded that “during the proceedings, some evidence of corrupt or apparently corrupt activity within the ICIL group of companies has come to light.”
“This is of course regrettable, although one has to be realistic: so endemic is corruption in Nigeria that there cannot be many companies with a track record of doing business there in relation to which that would not turn out to be the case,” the company wrote.
Nigeria’s lawyer, Mark Howard, told the court that this line of reasoning“demonstrates the scorn that P&ID has for Nigeria, its rule of law, its people, and indeed its efforts to stamp out corruption.” Nigeria, which accuses P&ID of “bribery on an industrial scale,” has called on the High Court to invalidate the arbitration award. P&ID denies Nigeria’s charge.
If the government loses its challenge, it would owe P&ID close to a third of its foreign exchange reserves. Nigerian economists argue that paying this amount would cripple public finances in a country where about 95 million people live in poverty.
The beneficiaries, meanwhile, would receive “riches beyond the dreams of avarice,” as Nigeria’s lawyer put it.
“It Might Be Less Than Honest”
P&ID was set up in 2006 by Brendan Cahill and Michael Quinn, a pair of Irish businessmen who had been working together since the 1970s and had previously secured contracts from Nigeria’s ministries of Defense and Police Affairs.
In 2010, the company won a contract from the Ministry of Petroleum Resources to build a gas-processing plant in Nigeria’s southeastern city of Calabar. Nigeria was to supply the gas for free over 20 years and the two parties would split the processed resources. But Nigeria never provided the promised gas, and the plant was never built.
P&ID successfully sued the Nigerian government for breach of the contract at an arbitration tribunal presided over by Lord Hoffmann, a retired senior English judge. Today, P&ID’s only activity is its legal effort to secure Nigeria’s payment of the arbitration award.
During the High Court trial earlier this year, lawyers for the Nigerian government argued that not only was the original gas contract tainted by corruption, but that P&ID figures also engaged in bribery to win the U.K. arbitration. P&ID has denied both claims. Asked for a response to testimony delivered in the High Court trial, lawyers for P&ID said “it would not be appropriate for us to comment pending judgment in these proceedings.”
On the witness stand, Neil Murray, an Irish businessman who used to take on jobs for P&ID, admitted that he had obtained access to privileged government documents between 2010 and 2013. They outlined internal government discussions about the arbitration case, giving P&ID extraordinary insight into Nigeria’s thinking.
Pages from some of the sensitive internal government documents
Pages from some of the sensitive internal government documents obtained and distributed by Neil Murray. (Photo: Edin Pašović/OCCRP)
The Nigerian government argues that this unexplained access to sensitive government documents is one of many signs that the company was bribing Nigerian officials and lawyers to covertly work on its behalf during the arbitration. P&ID accepts that the company’s access to privileged documents was a “strange” feature of the arbitration, but argues that Nigeria has not been able to establish that it obtained them through bribery.
The lawyer for the Nigerian government said there was no doubt that Murray should not have had the documents in his possession. “I accept that,” Murray said.
Murray claimed he didn’t know how he got them. But when asked if they might have been obtained by corrupt means, he said: “Probably before it got to my desk.”
Murray, who at the time worked as a consultant for ICIL in Nigeria’s capital, Abuja, testified that he scanned and emailed them to P&ID colleagues abroad before deleting the messages and shredding the paper copies.
“It might be less than honest, but it is the way we behaved,” Murray told the court.
Nigeria’s lawyer asked Murray whether Quinn and Cahill were “less than honest” in the way they conducted business. “In some instances, yes,” Murray replied.
Nigerian President Muhammadu Buhari
The Nigerian President Muhammadu Buhari addressing the U.N. General Assembly in 2019 where he told delegates that “the P&ID scam” was “attempting to cheat Nigeria of billions of dollars”. (Photo: UPI /Alamy Stock Photo)
“I Was Not in the Mood To Know What Is Right Or Wrong”
In his written statements to the court, Cahill acknowledged paying $88,000 to Grace Taiga, the ministry’s head lawyer, who advised the petroleum minister to sign a memorandum of understanding with P&ID in 2009 and witnessed the minister’s signing of the gas contract with P&ID the following year.
Though Cahill maintained the payments were lawful gifts “to support Grace with any legal or medical assistance she needed” after she had retired, he admitted under cross-examination that in 2019 he directed them to one of Taiga’s daughters in the United States so that Nigerian law enforcement would not become aware of the transfers.
Appearing remotely from Nigeria as a P&ID witness, Taiga did not contest Nigeria’s claim that she and her family received more than $200,000 from Quinn and Cahill between 2004 and 2019. But she insisted the payments were not bribes. When she accepted Quinn’s offer to support her financially, she was ill, going through a divorce, and earning a meager salary as a government lawyer, she said.
“I was not in the mood to know what is right or wrong,” Taiga said.
Nigeria also alleged that Quinn, who died in 2015, paid $2,000 to a Nigerian petroleum ministry lawyer, Ibrahim Haske Dikko, in 2012. Asked about the payment, Cahill said that, “rightly or wrongly,” it was not “terribly unlikely” that Quinn had made it. Asked whether P&ID might have “compromised” Dikko — who was representing Nigeria in the arbitration case — Cahill denied that Quinn had sought to corrupt the lawyer, and added: “In Nigeria, there is a culture whereby people give presents.”
Dikko did not respond to a request for comment.
“He Wants to Fiddle the Books”
Cahill told the court that his and Quinn’s companies used “sham invoices” at least twice. In 2013 and 2015, he said, colleagues forged invoices to skirt anti-money laundering measures at a Cypriot bank and get it to process $150,000 in transfers from P&ID and an ICIL group company to a P&ID representative in Nigeria, Adetunji Adebayo — money that Nigeria said was to feed a slush fund for bribes Adebayo paid on P&ID’s behalf. Cahill said that the money was unrelated to the gas dispute, while the government said that it was.“It was to facilitate a transfer from the bank which would not be made otherwise,” Cahill saidof his colleagues’ efforts. “They simply cut corners. I am not defending it.”
Adebayo did not respond to a request for comment.
The sham invoices
The sham invoices described by P&ID founder Brendan Cahill, used to justify the transfer of a combined $150,000. (Photo: Edin Pašović/OCCRP)
Murray described similar practices in the company’s accounts. In court, he was shown an email he received ahead of a 2013 tax audit, in which an ICIL accountant proposed creating new payment vouchers to justify certain expenses.
Asked by Nigeria’s lawyer whether the accountant wanted to amend the records, Murray responded: “I would go further and say he wants to fiddle the books.” Was the accountant proposing to produce sham invoices in order to make improper payments seem proper? “That appears to be his thinking, yes,” Murray replied.
But Cahill said this interpretation was “completely incorrect.”
P&ID’s treatment of witnesses also came under scrutiny. Trevor Burke, a lawyer who worked on the arbitration claim against Nigeria, said under cross-examination that in 2019 he asked Cahill to get Grace Taiga to delete from her phone WhatsApp messages between herself and Cahill.
Nigeria claims that this was done to conceal incriminating communications. Burke, who is the nephew of deceased P&ID founder Quinn, said he did it in “very specific circumstances” where Nigerian authorities were seeking to freeze funds sent from Cahill to Taiga that, Burke said, were used to pay for medical expenses. Asked whether he typically advised clients to delete documents, Burke said: “I’ve done it once in my career and it was this time.”
Cahill himself admitted that he advised one of Taiga’s daughters on what to say in a witness statement.
He told the court: “With hindsight, I accept that that was not appropriate and I am sorry I did it, but I did.”
Unexplained Payments
The trial also addressed evidence of practices unrelated to the gas dispute, as the government sought to prove that P&ID figures had a track record of illicit activities in Nigeria.
In the 2000s, ICIL and companies linked to it paid out hundreds of thousands of dollars to senior Nigerian officials, including army generals, according to Cahill’s court testimony.
Cahill admitted that these payments were sometimes anonymized in internal company accounts by replacing the names of recipients with a special code. He said this was done out of a concern that law enforcement might raid their offices and use the information they found to accuse the company of corruption.
“I am not disputing that the purpose of the code was to make sure that if somebody raided the office they were not in a position to say, ‘Here are payments to individuals, here are payments to officials, here are payments to the army, etc, without invoices,’” Cahill said.
Nigeria said the code was used to hide actual corruption, which Cahill disputed.
Cahill explained some payments as legitimate expenses, but acknowledged that there were no documents to back this up. He also said that he was “surprised” to see, in a 2005 company spreadsheet, that he had paid 32.3 million Nigerian naira — worth about $250,000 at the time — in cash to an unnamed minister of police affairs. He had no explanation for 1.5 million naira — about $12,500 at the time — paid in 2002 to the wife of an unnamed finance minister, marked in a separate spreadsheet.
Asked whether the payment to the finance minister’s wife was a bribe, Murray said: “That is how it looks.”
Murray was also shown evidence of $90,000 in payments to Nigeria’s former minister of police affairs, Broderick Bozimo, and his family. Bozimo was in the role between 2003 and 2007, while the payments were made between 2006 and 2009. Asked whether these payments were bribes, Murray said: “I wouldn’t be surprised if they were, but I don’t find the sums disturbingly high.”
Contacted by OCCRP, Bozimo denied that either he or any member of his family received bribes during his tenure as minister. “I remain steadfast in my assertion that I
discharged those duties with merit and integrity,” he wrote. P&ID did not respond to specific questions from OCCRP about the payments to Bozimo.
$50,000 to “Spread Around”
Also unrelated to the gas dispute, Nigeria claims that the companies owned by Cahill and Quinn paid money to individuals identified as “Prof,” “Uzo,” and “Dr. Alimi”. The three then distributed the money as bribes to officials, the Nigerian government claims: $770,000 in the case of Prof and Uzo, about $50,000 in the case of Dr. Alimi.
Cahill admitted to working with the three individuals, and acknowledged that Prof and Uzo had paid out bribes by 2007, though he said this was not done on his companies’ behalf.
Cahill was also shown an email that he received in December 2015 in which he was told that Alimi was requesting $50,000 to “spread around the places he will be going for us.”
“That is on its face a patent reference to paying of bribes, do you agree?” Nigeria’s lawyer asked.
“It is,” Cahill replied.
“I will not pretend that I was shocked to receive such a message,” he added. “Nigeria is widely known to be a pretty corrupt country.” Nonetheless, he called Alimi “a respected lawyer in Nigeria.”
Cahill claimed never to have acceded to Alimi’s request for bribe money, as Nigeria alleged he did.
Finally, Murray stated that he often transported undeclared cash on international business trips for ICIL, sometimes as much as $50,000 in a shoulder bag, including on one trip in 2008 that he said took him from Nigeria, “probably through London”, to Ukraine.
“You cannot lawfully bring into most countries in excess of $10,000 in cash. Are you aware of that?” Nigeria’s lawyer asked Murray.
He replied: “That is the ruling today and recently, yes.”
“No, not recently,” reacted the lawyer. “That, I think you will find, has been the law for a very long time, Mr. Murray.”
