NERC Chairman's Denial Weakens EFCC Allegation
From Martins Oloja (Abuja Bureau Chief)
UNRESOLVED tussle between the new Minister of Power, Dr. Rilwan Olanrewaju Babalola and the Nigerian Electricity Regulatory Commission (NERC) is threatening reported efforts to revive the power sector.
Efforts by the Senate to resolve the matter were deadlocked last week even as proceedings at the meeting between the Senate Committee on Power and the minister ended in some controversy.
The media had claimed, after the Tuesday meeting, that the Senate had ordered reinstatement of the suspended commissioners of the NERC since the president did not follow due process in ordering their removal, a development the office of the minister had denied.
Another report claimed that the power minister was in trouble over the suspension, as the president was in a fix over the authenticity of the EFCC interim report the minister had acted on.
The minister cited the EFCC report as recommending the controversial suspension of all the NERC commissioners.
Those suspended alongside with the NERC Chairman, Dr. Ransome Owan are Mallam Abdul-Rahman Ado (Vice-Chairman and Commissioner, Market Competition and Pricing); Engr. Muhammed Baba Gana Bunu (Finance and Support Services); Dr. Muhammed Alimi Abdul-Rasaq (Legal, Licensing and Enforcement); Engr. Abimbola Odubiyi (Engineering Standards and Safety); Dr. Grace Eyoma (Government and Consumer Affairs); and Prof. OC Iloeje (Research and Development).
As at press time, there was no word from the presidency on the lingering crisis, which, experts say, could erode investors' confidence in the battered power sector that has also raised dust even in the House of Representatives that could not release its report after a noisy probe last year.
The failure of the power sector has become the biggest source of headache to Nigeria's government's inability to generate, transmit and distribute enough electricity to Nigerians.
Intense conflict in the sector came to a head last Tuesday when the Senate committee summoned Babalola to appear before it, to explain why the chairman, Dr. Ransome Owan and six commissioners of the NERC were suspended on the weight of anonymous and unsigned petition to the minister.
The ministry's Permanent Secretary reportedly referred the petition to the EFCC "for fresh investigation."
The Senate committee's summon on the minister broke, as the chairman of the NERC, on behalf of six other commissioners, submitted a 'Save-our-Soul" petition to the two committees of the legislature on power on the alleged frivolity of the anonymous and unsigned petition that led to their "demonisation, humiliation and suspension" announced two weeks ago.
In a five-page petition submitted to the National Assembly, the chairman and the commissioners denied outright the allegation that they embezzled N1.5 billion or N5 billion belonging to the Commission, a development that led to their current travail.
In the petition obtained last week, the NERC chairman also said he did not put N500 million in a strange fixed deposit, as widely published.
Owan, who made the clarifications in the petition to the Assembly, said their suspension would be a setback for the power sector, as the allegations being hyped were frivolous and unfounded.
Babalola had announced suspension of the commissioners based on preliminary report and recommendation of the EFCC on the allegations of corruption leveled against them via an unsigned petition.
The minister, who had denied allegation of witch-hunting, said the President, who approved the suspension, also approved appointment of a sole administrator, Mr. Imamuddeen A Talba to oversee the commission pending the resolution of the crisis. Mr. Talba is the secretary of the commission.
But the appointment of Talba has sparked off another row, as five other senior managers in the commission have allegedly cried foul that there are five others, mostly from the South, that are senior to him (Talba) and so the president's appointment was irregular.
The more senior managers said to be superior to Talba include Olufunke Dinneh (Legal Licensing and Enforcement), Tony Akah (Government and Consumer Affairs), Alex Amakon (Engineering Safety and Standards), Mustapha Bukar (Finance and Management Services).
Meanwhile, another twist was added to the crisis in the commission, as news broke in Abuja last week that there was more to the crisis beyond the allegation of corruption against the commissioners including a son to a prominent northern Emir.
It was gathered that at the core of the crisis of confidence is who will spend N177 billion Multi-Year Tariff Order (MYTO) Fund, which confirmed The Guardian scoop on the disagreement.
Specifically, sources close to the power sector gladiators revealed that out of the MYTO unspent fund, N32.5 meant for 2008 is still at the Central Bank.
The authorities in the power sector are reportedly bent on spending the money quickly without recourse to the regulatory commission. It was said that the president had raised some questions on structure and platforms to spend the money.
The MYTO is a form of subsidy approved as a bridging cost for consumers, who are not supposed or can't pay tariff. It is in the NERC Act.
Though the Power Minister denied complicity in the ordeal of the NERC commissioners, it was gathered that he is in a position to shed light on the issues, as he was a member of staff of NERC as a deputy general manager where he had allegedly collected N3.8 million for his accommodation allowance for 2009 before he was appointed minister recently.
It was also confirmed that the NERC had been paying the salary of the former DGM, who was seconded to the office of the Chief Economic Adviser to the President Office last year.
But some officials of the Power Ministry, in response to The Guardian inquiry, said the minister, who was in Lagos, would not be able to respond to query.
The officials, who did not speak on the minister's relationship with NERC before he was appointed minister, denied the allegation that he was behind the ordeal of the NERC commissioners.
They merely reiterated what the minister had said in a meeting with journalists in Abuja the other week. In an unsigned response, the officials said:
"The allegation that the Hon Minister of Power is behind the petition, arrest and detention of the Commissioners is predicated on rumour. The Minister, as a man of integrity and honour, cannot do such a thing. As a matter of fact, the petition was first received by the EFCC on 2nd June 2008 before his appointment as a Minister."
The officials added: "The alleged protest about the designation given to the Minister while in NERC is equally based on rumour. It cannot be substantiated."
Earlier, there were claims and reports that Dr. Babalola, who was in the BPE Energy Desk when the agency crafted the paper that led to the birth of the commission, was expected to lead it as chairman but Liyel Imoke, who was then the Power Minister, allegedly overruled that and shopped for an expert in the Diaspora, Dr Ransome Owan, who was then an expert on Energy Management System in the Washington-Maryland-New Jersey axis.
Dr. Babalola ended up as DGM in the commission, a designation he reportedly decried until he was elevated minister recently.
The power sector officials, who were disturbed by what they called alleged distortion in the report on crisis, also explained the circumstances of and origin of the MYTO fund said to have precipitated the crisis: Their words:
"What is MYTO? It is the acronym for Multi-Year Tariff Order. It is a subsidy of N177.95 billion, which was approved by the President for 3 years to cover shortfall between the cost of energy sent out and the actual revenue collected.
"The Ministry (which is the supervising Ministry) being policy formulation arm of government, for the power sector and subsidy being a policy instrument, has the custody of the subsidy fund and it is currently residing with the Central Bank of Nigeria (CBN) as the apex bank, for direct disbursement to the industry".
They added: "For transparency and accountability, NERC as the regulator cannot be involved in monetary disbursement of MYTO fund. Hence there has never been any dispute between the Ministry and the NERC as to who the custodian of MYTO is."
The officials denied the allegation that Talba was too junior to head the interim management of NERC.
Their explanation: "Publication that Mr. Talba is a 'Sole Administrator' is incorrect. Mr. Imamudeen A. Talba is not a Sole Administrator. He was appointed by President Umaru Musa Yar'Adua to oversee the affairs of the Commission pending the resolution of the matter.
"As for the issue of seniority, looking at it from the perspective of the role of a Company Secretary, his role is very crucial as Company Secretaries generally report directly to Chief Executives. Besides, he is competent and has enough experience as evidenced by his track record."
They also denied that the Senate had ordered reinstatement of the suspended NERC commissioners. They claimed:
"In the first place, the Minister of Power has no power to suspend NERC Commissioners. This power is vested solely in the President of the Federal Republic of Nigeria in line with the Electric Power Sector Reform. NERC Act (2005) Section 38 states. The Senators who belong to the Legislative arm are aware of the law and therefore cannot give such an order."
The officials said that what transpired at the Senate last Tuesday was: "Senate Committee on Power did not order Power Minister to revert the decision on NERC. He (minister) was advised to go and confer with Mr. President on the matter and report back to the Committee within two weeks. Similarly, the issue of presidential query to the Minister is baseless, as there is no iota of truth in it. It is absolutely false and unfounded."
The suspension of the NERC officials had also generated controversy, as the NERC Act has no provision for suspension.
But Owan, a US-based energy expert, who was invited home in 2004, said in the petition that he ran to the committees to save his integrity, claiming that no N1.5 billion was embezzled.
Excerpts from his petition read: "There is no embezzled N1.5 billion or N5 billion belonging to the commission. The financial records of the commission have been furnished to the EFCC since June 2008, inclusive of cashbooks and bank statements.
"This is a frivolous and scandalous allegation designed to stain the commission and ruin its reputations. The allegation is false and prejudicial. It is very damaging to the power sector, Mr. President's agenda and will scare away investors and destroy market confidence.
"The EFCC found a list of accounts titled, 'Status Report on the Commission's Bank Account of July 2008' in which moneys in all banks including CBN were indicated.
"Listed was N500 million properly lodged in the name of the Commission at Mortgage Guarantee Savings and Loan meant for a staff housing scheme in a fixed deposit account. Two deposits of N200 million and N300 million were made to MGSL, a thrift/banking institution, not MGSL Properties Limited as alleged by some.
"The chairman has never owned or deposited N500 million in any bank in the world as alleged. The aforementioned NERC deposit of N500 million for NERC Staff Housing Scheme can't suddenly become a 'secret account.'
"NERC keeps certain amounts in fixed or call deposits from time to time with commercial banks and in the name of the NERC. All interests are accrued and vested to the NERC. We have acted prudently.
"The Electric Sector Reform Act 2005 allows NERC to earn interest on its funds based on Section 52(a-c).
"According to the law, the funds of the Commission come from (a) fees, charges (b) funds allocated to the commission and (c) such other moneys as may vest in or accrue to the Commission, whether in the course of its operation or otherwise."
Owan begged the committees to save him from any witch-hunt and attempt to tarnish his image and that of his commissioners.
He added: "Commissioners have been barred from going to work by the Police based on a letter dated February 11, 2009. The instruction of the Ministry of Power signed by the Permanent Secretary has caused police presence in our offices to enforce the unofficial suspension purported to be an implementation of the recommendation of EFCC without any formal endorsement of Mr. President or the Senate to the commission."
The Senate committee has invited the Minister of Power to appear before it on Tuesday and show cause why he flagrantly violated the Act establishing the NERC.
Investigations by The Guardian show that the Act does not contain suspension clause.
Section 38(1) and (2) of the Act says:
(1) The President shall require a Commissioner to vacate his office if the Commissioner
(a) has, subject to Section 36(2) been found to have conducted himself in a manner that renders him unsuitable as a Commissioner, including a contravention of Section 43 or Section 57(2); or
(b) has failed to comply with any term or condition of his office fixed by the President under Section 35(3); or
(c) is mentally or physically incapable of efficiently carrying out his functions as a commissioner; or
(d) the Commissioner is convicted of an offence in respect of which a sentence of imprisonment without the option of a fine has been imposed, whether in Nigeria or outside.
Section (2) says a Commissioner shall not be removed unless the request is supported by a simple majority vote of the Senate."
Dr. Owan also lamented to the committees that the alleged anonymous petition was the second to the EFCC against them. He said the first was in June 2008 and the commission responded to them.
The chairman said "the ghost petitioner used false names of three commissioners to coin a fictitious name thus: Mohammed Abimbola Iloeje as the petitioner derived from (1) Commissioner Mohammed MG Bunu, (2) Commissioner Abimbola Adubeyi and (3) Com/Prof. OC Iloeje."
Meanwhile, relevant documents obtained from the presidency and EFCC confirmed that the EFCC actually recommended to the Vive President - and not the President - that the NERC commissioners "be suspended from office to allow the EFCC proceed with unfettered investigation into the matter.
"We believe that as long as they continue to be in office, they will adversely hamper investigation," the EFCC said.
The Executive Chairman of EFCC, Mrs. Farida Waziri (AIG rtd), signed the letter to the Vice President dated February 6, 2009.
In the conclusion, the EFCC boss told the Vice President: "The nature of the documents found at the residences and offices of the suspects indicates an organised looting of public funds by the Commissioners of the NERC. The looting involves foreign and domestic banks as well as dummy companies.
"Furthermore, some of the documents found are indicative of award of inflated contracts as well as deliberate and willful flouting of Government's Financial directives on Estacode and placement of public funds by Commissioners of NERC.
"Under the circumstances, we will recommend that all the Commissioners of the NERC be suspended from office..."
Some of the EFCC findings in the interim report to the VP include the following:
