Still on the J.P. Morgan account

Section 2(1)a of the Fiscal Responsibility Act 2007 empowers the Fiscal Responsibility Commission to compel any person or government institution to disclose information relating to public revenues and expenditures. It also empowers the commission to investigate whether any person has violated any provision of this Act. Therefore, the recent discovery of an illegal account allegedly being operated in an American bank, J.P. Morgan, by some government officials has brought to the fore the imperative of enforcing fiscal responsibility in governance.

Nigerians still rue the unprecedented corrupt tendencies by those charged with the responsibility of managing public finance. At the centre of J.P. Morgan issue are the Nigerian National Petroleum Corporation and the Central Bank of Nigeria.

According to the Executive Secretary of the Nigerian Extractive Industry Transparency Initiative, Hajia Zainab Ahmad, who blew the lid off on the issue on November 1, 2011, a substantial amount of money has been stashed in J.P. Morgan by the two government parastatals.

However, the most annoying aspect of the alleged fraud is the denial of ownership of the controversial account by the NNPC and CBN.

While the CBN was reported to have admitted the existence of the said account, it claimed to be ignorant of its signatories. The NNPC also confirmed the existence of the account as well as the deposition of the proceeds of the oil sale, but said it had no knowledge of its ownership. This has surprised many Nigerians, particularly in view of the fact that the two parastatals are in a better position to say who owns and administers the account.

Ahmad, while exposing the existence of the illegal account during her testimonies before a House Committee on Fuel Subsidy, said the account had been in existence for nearly a decade now. Hence, a fraud of such magnitude ought not to be treated lightly. Government must take all necessary actions to identify and punish the seeming lack of transparency by the two principal actors.

In the first instance, the provision of the Fiscal Responsibility Act 2007, which deals with transparency and accountability in the act of governance, must be obeyed to the letter. Nigeria, for a long time now, has been promulgating laws aimed at fighting corruption and ensuring accountability in the running of the country, but it appears we are far from realising this “ambitious” dream of cleansing the society.

Suffice to say, the discovery of such an illegal account with a huge amount of public funds stashed in it is worrisome, considering the two agencies whose operations and functions are directly linked with it.

The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, while facing the Joint Senate Committees on Petroleum Resources (Downstream), Appropriation and Finance, said she was aware of the account but didn’t know the signatories.

Describing the account as unconstitutional, committee chairman, Mr. Magnus Abe, said the government was committing an illegality by maintaining the account and by spending from it without seeking the approval of the National Assembly. He said all federally accrued revenue ought to be paid into the Federation Account, as required by the law.

Abe said, “NNPC is a creation of the law. So, I don’t see how any commercial law could now overtake our constitution. Whatever commercial exigency that made that possible is clearly against the constitution and it cannot go on.”

Of course, Section (80) (4) of the 1999 Constitution makes it illegal to lodge the monies in the J.P. Morgan account, though how much is being saved in the offshore account and the date the account was opened remain undisclosed.

Beyond the need to close the account, as suggested by the Abe committee, the major issue here is the urgent need to strictly adhere to the provisions of the Fiscal Responsibility Act 2007. The Act, to date, remains the most excellent law ever enacted by any administration in the country.

Indeed, the NNPC or any government parastatal would have found it extremely difficult to operate such a bank account if the provisions of sub-section 3 sub-section 1 of the FRA 2007 had been adhered to. The J.P. Morgan bank account saga should therefore serve as a litmus test for the Fiscal Responsibility Commission to make bold its presence in the crusade for fiscal responsibility in governance.

Sada, employee of Fiscal Responsibility Commission, wrote vide [email protected]


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