Driving on the highway from the airport at night, heading into Lagos, we sit in darkness, the blackout curtains in the back of the minibus fully drawn. I am travelling with a group of expat field engineers who have returned from leave. Most of the time we sit in silence. One of them, a Geordie, tries to lighten the mood with talk of his sexual exploits in Thailand, where he lives when not working. But for the most part there is only the noise of the engine, punctuated by the crackle of the radio as the control room at the base checks on our progress. Suddenly, there is a booming on the roof and one side of the minibus and for a moment I think we have come under fire. Someone pulls back the curtain so we can see what’s causing the noise. A squad of soldiers is driving alongside us in an open-topped lorry. The soldiers are striking the minibus with the butts of their rifles, shouting that we are too close. The driver accelerates and swerves into another lane. Before the curtain falls back, I get my first glimpse of Lagos and the lagoon, lit by weak neon, its banks covered in garbage. ‘Welcome to Nigeria,’ someone says and we all laugh and look at each other, pleased to have bagged a good story to tell the people back home. Eventually, the Geordie cannot restrain his curiosity and asks what I’m doing in Nigeria.
‘I’m a company lawyer,’ I answer non-committally.
‘I’m internal investigations counsel,’ I reply. Nobody speaks to me for the rest of the journey.
The recent Unaoil and Petrobras scandals have been a reminder of the pervasive corruption and associated misconduct in the oil and gas business, but cases as large and high-profile as these are rare: oil companies employ an army of ex-prosecutors, police officers and intelligence personnel to conduct investigations into all sorts of misconduct including corruption, internal fraud and breaches of sanctions. We are paid to take care of the oil industry’s laundry before its dirty drawers even come close to being aired in public.
The reason the oil companies care so much is the US Foreign Corrupt Practices Act (FCPA), which makes it illegal for a US company to bribe a non-US government or public official. The Act was passed in 1977 as a result of a number of overseas and domestic scandals involving four hundred major US corporations and corrupt payments of more than $300 million. The Act originally prohibited US corporations and citizens from paying bribes to foreign officials, political parties or candidates in order to assist in obtaining, retaining or directing business to any person. The Act also imposed the less glamorous but equally important recordkeeping and internal control requirements that make it illegal to record a bribe as a legitimate business expense or a consultancy fee. By 1998, US business had had enough of not being allowed to pay bribes while foreign companies could continue to do so. The FCPA was amended to expand the jurisdiction of the act, allowing foreign companies and nationals to be prosecuted in certain circumstances. Since then eight of the ten largest FCPA penalties have been imposed on foreign companies (Siemens occupies the number one spot with an £800 million fine). The FCPA has inspired a host of wannabes, among them the UK’s Bribery Act, passed in 2010, which is on the face of it an even more stringent piece of legislation than the FCPA as it criminalises commercial bribery as well as that of government officials.
The FCPA has most significance for those industries whose business depends on relationships and contacts (and contracts) with governments: defence, construction, telecommunications and oil. The oil industry is particularly well suited to the business of corrupting government officials. The state controls access to oilfields and oil is to be found in ‘emerging markets’, which is to say countries with some of the poorest populations and the weakest governance and legal systems. The combination of having to meet the demands of a very active Department of Justice and the need to work in countries such as Nigeria, Angola and Iraq in order to satisfy the appetite of dividend-hungry shareholders has led to the emergence of a highly developed internal law enforcement (or ‘compliance’) industry that implements anti-corruption and anti-fraud programmes, trains employees, conducts investigations and generally tries to read the runes to work out what the Department of Justice is planning to do next.
Where a state has a constitutional document and laws, a corporation has a code of conduct and compliance policies and procedures. The comparison with a state’s legal system isn’t so far-fetched, for in some jurisdictions where the rule of law is extremely weak and law enforcement agencies can’t be trusted, companies such as mine, with a highly developed internal governance structure, provide a measure of normative certainty.
This is one of the paradoxes of globalisation: multinational corporations are the cause of a lot of the dirt slewing around and at the same time set an example of due process in jurisdictions where there is none available in the domestic legal system. The attempts to influence employees’ behaviour go well beyond the mere enforcement of rules. All companies worth their salt now speak of ethical ‘values’ as being essential and pay lip-service, at least, to a utopian approach to compliance in which eventually employees will internalise the requisite virtues so that procedures and policies will no longer be necessary. In the meantime, the fight against corruption and fraud continues in the oilfields, rigs and bases of Kazakhstan, Angola and Nigeria. And that is why, after a night in a Lagos hotel, I am on an internal flight to the Delta State town of Port Harcourt, which is home to many oil companies’ facilities.
In order to keep its operations running, my company is heavily dependent on the supply of materials, spare parts, office equipment and a whole range of other items from local suppliers. It spends large amounts of money to procure equipment. Dealings with local suppliers are heavily regulated but this remains an extremely vulnerable area for all companies, providing as it does a perfect opportunity for criminals to prosper at the expense of bloated multinationals.
A few days ago a whistleblower made an allegation that an organised gang in one of the bases has been working to control the supply of goods to our business there. Not only that, we are paying handsomely for large quantities of goods that do not exist. The suppliers, it’s alleged, are owned by government officials who in return will favour the company with contracts. To make matters more complex, the whistleblower alleges that some of our employees are also among the suppliers’ owners.
All large oil and gas companies run whistleblower programmes. Employees are encouraged to report breaches of compliance and other misconduct in a variety of ways. There is a phone number they can call anonymously (and it is truly anonymous), and there are email addresses to which they can report their concerns. Employees who would otherwise be too scared to come forward record genuine complaints in this way; others, perhaps engaged in personal vendettas, make slanderous claims about innocent individuals. In my company at least, every complaint, no matter how spurious, is investigated. Extraordinarily, in this case the whistleblower, a woman whose sense of duty seems to have overridden her fear, has come forward in person. The fact that this woman has identified herself means a number of things to an investigator, chief among them being that her complaint is credible and that she has made the allegation in good faith.
Port Harcourt is a dangerous place. We are picked up at the airport by an in-house security team and hurried into a waiting four-by-four. Immediately in front of and behind our vehicle, two pick-up trucks of heavily armed police escort us through the chaotic traffic. The road into town is lined with ramshackle shops and small evangelical churches. Pedestrians thread through the traffic, carrying baskets of personal belongings and cheap plastic goods for sale. Billboards proclaim the achievements of local politicians and pastors in bringing prosperity to the area. The condition of the people milling about beneath them contradicts their boasts. Everywhere, derelict buildings and half-completed bits of infrastructure tell the same story: huge sums of money paid out by oil companies for community and social responsibility projects in return for access to oil are being misused.
We drive straight to the base, a fortified facility opposite a busy marketplace where animals are slaughtered. The facility is circled by a high whitewashed wall; next to them are identical bases owned by our competitors. We are let through the barrier by more security guards and the armed police drive off. I will run the investigation from here for the next few days. While I interview witnesses and suspects (known as subjects), a forensic accountant will analyse financial information and we will work with the security manager to seize evidence if we need to. In a perfect world, all white-collar crime investigations are organised in a similar way. The investigation forms a funnel or inverted pyramid shape. First comes the gathering of documentation, emails and financial information. Then comes the interviewing ofwitnesses, ranging from those who know least to those who know most, moving from the general to the specific. The final act is to interview the subject or subjects themselves, having distilled all the documentation and information already gathered. The evidence is put to the subject, and the subject, overwhelmed by the strength of the case against him, realises the game is up and confesses.
But this is in a perfect world and the perfect fraud or corruption investigation takes a bit of time to plan and organise. More often, if the misconduct is still going on or there is a high risk of government intervention if no immediate action is taken, an investigation will be launched and conducted in a far less structured manner. This is one of those occasions. I’m given an office to sit in. I send out requests to speak to a large number of employees, the vast majority of whom I have no interest in interviewing. But given the high-profile, high-risk nature of this investigation, I have to fire out chaff like a bomber flying over enemy territory, so that when I do speak to the informant, they won’t incur particular suspicion. In the same way, the forensic investigator has requested the necessary financial information under cover of preparing a routine report expected at this time of year.
Eventually, when I feel that everybody is losing interest in the comings and goings around my office, the informant, Eileen, comes to see me. She tells me that she is in terrible danger for speaking out but her conscience will not let her remain silent. She will not countenance this wrongdoing any longer.
‘What will happen if they find out?’ I ask. She doesn’t speak but mimes putting a gun to her head and firing. She is not worrying unnecessarily. A rash of bullet holes in the wall of our base bears witness to the shooting of a manager who tried to break an organised crime ring a few years ago, and while I have never been directly under fire, I’ve been in close proximity to violence only recently. Just before this trip I was in Tripoli during a precarious ceasefire between warring factions. I was there in part to reassure an expat manager who was hated by the workforce and lived in fear of assassination. One night, after gingerly walking into town, the two of us had dinner sitting next to the Arch of Marcus Aurelius listening to the ‘pop’ of small arms going off in the near distance. A few days after I left, the lobby of the hotel where I had been staying was strafed with a heavy machine-gun and several people were killed. In Pakistan a few months before that, I was staying in the Marriott in Islamabad (itself bombed in 2008 and now surrounded by blast walls, soldiers and checkpoints) when news of a major terrorist attack came in during the night. I was woken by the sound of doors being knocked all along the corridor, as high-ranking army and government officials staying in the hotel were roused to deal with the crisis. I was evacuated from the city the next day, escorted to the airport by two elderly Pashtuns wielding shotguns.
Eileen tells me that the crime ring is making money hand over fist. She is the only one standing up to them. She cannot provide documentation – that would be too risky for her – but she names names. She speaks slowly, deliberately, weighing each word. ‘I am so confident that my words that no one wants to hear will be of good help to you. Please treat this as confidential because no one else has heard what you are hearing now. For the sake of my life and that of my family.’ Feebly, I tell her that I will do my best.
The base that I am staying on in Port Harcourt is really a small, heavily defended town, funded by the oil companies and reserved for use by expats. It has apartment blocks, shops, a small hospital and a school. There are leisure facilities including basketball and tennis courts, a gym and even a driving range. Its perimeter is patrolled by specialist detachments from the armed forces. I have been given a room in an apartment that belongs to a rotation worker – a ‘rotator’ – who is currently on leave. That night, as I unpack, I receive the first of several threatening phone calls, warning me off further investigation. I report them to the local security director, who says we should meet the following day, and then I head down to the base restaurant. Very few tables are occupied. Most of the rotators cook in their apartments or prefer to get sozzled with the local hookers. The bar area is full of white middle-aged men conducting faux romances with young women whose bodies they have bought. Sitting a few tables away from me, an expat suddenly bangs the table, stands up and shouts as a waiter takes his plate on his way past the table: ‘i’ve told you a hundred times: do not take my plate until I tell you to.’ Then, just as abruptly, he sits back down and continues scrolling on his smartphone. When I go to pay, I find out that the bar staff are running their own small-scale sting and have wildly overcharged me for my meal. What’s my problem? Why should I care? My company is picking up the tab. Outside the night is beautiful and peaceful and warm.
Next day the Goods Received Ledger that I have been asking for is delivered. This is the central handwritten record of all the supplies that have been received at the base. Ideally, the warehouseman would faithfully record the movement of all goods in and out. I have got to it too late. It has been altered. It’s obvious that many of the pages have been removed and new ones, laboriously written out, put in their place. Whose handwriting is this? Who is responsible? None can say. Nobody knows.
When we meet, the security director, a former intelligence operative, is troubled. I’ve told him about my informant and he agrees with me that the threat against her is credible. I’ve asked that she receive close protection at all times but he shakes his head. ‘It’s pointless. If they want to get to her, they will get to her. We can’t protect her outside of work. They can turn up at home, they can turn up at church. The only thing we can do is move her out of Port Harcourt.’ He tells me that his own family lives under constant threat and he moves house regularly in order to avoid kidnap or assassination. Outside the urban area of Port Harcourt, he tells me, the situation is even more unpredictable and dangerous. Access to well sites is frequently via tribal territories and is controlled by so-called ‘youth groups’ who represent the tribe. This may conjure up an image of adolescents playing table tennis in a church hall, but here a youth group is a gang of local hardmen who demand ‘community contributions’ for truck entry onto well sites and force oil companies to employ unskilled labourers from the tribe. Failure to make an appropriate community contribution can result in the stoppage of all work and significant violence against our employees. Negotiating with these volatile groups is a dangerous business. I ask what would happen if I went to one of these areas. The security director laughs. ‘If they knew you worked for an oil company, you would live. If not …’ and he mimes a machete stroke on my neck.
I continue to speak to witness after witness. No one has seen anything. No one can explain the discrepancy in the records. No one knows who has ordered the goods or whether they ever actually existed. But the financial records show that we have paid. As is often the case in huge bureaucracies, the paperwork has all the correct approvals but no one has sought to check whether the paperwork matches reality.
Finally, at the bottom of the funnel, I interview the main subject. He is young, aggressive and dismissive. He signals his contempt for the whole process by cocking a leg over one arm of the chair and draping his arms over its back. I tell him to change his attitude, that this is a serious business, that he is bound to co-operate, and he pauses, weighing up whether to do as I’ve instructed. To do so is to lose the psychological high ground in this encounter. Not to do so may needlessly antagonise someone from out of town who may not know anything and who is merely on a fishing expedition. He chooses to take his leg off the chair arm and place it with exaggerated care on the floor.
Psychological skirmishes occur frequently in investigation interviews. One of the most interesting aspects of my job is to see how subjects – who are almost always men – behave when questioned. Interviewees will often try and take the initiative away from their interrogator. Some attempt to use physical presence to intimidate. This can only work if you happen to be big and/or physically hard, which in the oil industry interviewees frequently are. Others, with more sophistication, try to turn the tables. They tend to be articulate, used to managing people, and have natural authority. They will interrupt and ask the interviewer to explain himself. They have to be shut down immediately and firmly reminded of the way the dynamic is meant to work. It’s surprisingly difficult to do and if you are inexperienced you can end up having spent the whole interview justifying yourself, rather than asking the questions you are supposed to be asking.
Internal investigation interviews can be rough affairs in other ways too – at least as compared to the highly regulated and choreographed law enforcement interviews I have conducted under the Police and Criminal Evidence Act. Some of my colleagues, more concerned in their former careers with intelligence-gathering than the admissibility of evidence, are quite prepared to trick employees into self-incrimination or to misrepresent the true position in order to get a confession. But even though I never deliberately deceive or misrepresent, there is still a considerable gap between my powers as an interviewer and the protections afforded an interviewee. Employees are almost never represented. They are bound by company policy to co-operate. There is no detailed code laying down the circumstances under which interviews can take place. Often the interview will be conducted with only the investigator and the interviewee present, the interviewer’s version of events the only record. There are no rules on timing: an interview session can go on for as long as I want. And rather than having the use of dedicated interview suites, I have interviewed witnesses and subjects in a range of locations – hotel lobbies, staff houses, or, as is the case now, a borrowed office next to the shopfloor.
I turn to one of the allegations that Eileen has made. By now, any pretence at open-ended, fact-finding questions has disappeared. I am cross-examining. How can he explain that equipment he has ordered hasn’t turned up but has been paid for?
‘I sent it back.’
‘Did you get a record from the supplier?’
‘Did you block payment?’
‘So how can we be sure that the goods were ever sent to us?’
‘I saw them.’
‘Did anyone else?’
‘No. Everyone else was off that day. I sent them back.’
‘So you ordered the goods, you received them, you sent them back and you didn’t put on a payment block?’
‘The goods never existed did they?’ The smile is dropped.
‘You tell me,’ he says. And he knows he’s got me because I can’t. And on it goes until we have butted each other to a standstill.
I can understand, and to an extent admire, his drive and aggression. Making money is no laughing matter in a country like Nigeria. In the Delta region, oil is the way out. It is first survival then status, identity, wealth. The dream. And for some it is even better when legitimate income, already astronomically high compared to that of non-oil industry workers, is supplemented by extra-curricular earnings from fraud or kickbacks or corruption. There can be no greater punishment than to be cast out into the darkness, away from the conference calls with the US, the business-class flights, the corporate retreats. At compliance conferences it is de rigueur to talk of ‘perceived’ corruption risk. But the truth is that Nigeria is riven with serious criminality to levels which are almost incredible to anyone who has only had experience of Western Europe. And the extent of the kleptomania is matched only by the sophistication and depth of the structures that exist to conceal and obfuscate any attempt at investigation.
Later that day, I meet up with Eileen again. I tell her that the only thing we can do is to put her into a company witness protection programme. She can be moved to another part of the country, or even another country until the noise around the investigation has died down. She shakes her head. She has family here and does not want to move. She will put her trust in God instead. That night, the phone calls are more aggressive and there is a power cut on the base. This hasn’t stopped the rotators and their girls though. They sit around the base swimming pool by candlelight eating pizza and sending shrieks of laughter to the stars.
The final meeting I have in Nigeria is with the senior partner of a respected law firm. He is an impressive individual: knowledgeable, realistic, straight-talking. I ask him what our chances of bringing a prosecution would be. ‘To make sure that the police investigated your complaint fairly, you’d have to bribe them.’ We laugh at the absurdity of a system where corruption is necessary in order to get someone to act in good faith. And with that, there’s nowhere else to go. Interviews rarely yield an unequivocal confession and cases are usually built on paperwork, the cumulative effect of circumstantial evidence being enough to substantiate an allegation on a balance of probabilities. To be seen to be doing something is often as important as getting a result. I’ve conducted interviews, seized and assessed evidence and made a show of being concerned with the problem in the hope that it may have some deterrent effect. We will terminate some suspect employees, divert the reception of supplies to another base, and make a senior manager directly responsible for checking and approving goods. This will inconvenience the criminals for a while. It certainly won’t stop them.
Back in London as I write my investigation report, an anonymous email pings into my inbox. The email thanks me for my recent visit but says that, unfortunately, I have got the wrong end of the stick entirely. There is a huge fraud going on right under my nose. I have been picking on innocent individuals. Sir, a criminal mastermind is at work, running a racket that is bleeding the company dry. The evil genius sits at the centre of a web of deceit, directing a network of accomplices. Clever, manipulative and dangerous, ‘the script writer, the master minder, the drum beater, the trickiest person’. Her name, of course, is Eileen, my conscientious informant. Please, sir. We ask you. Come to Nigeria and investigate her wrongdoing as soon as possible.