Buhari terminates $195 million controversial ‘Israeli’ security contract over fraud

President Muhammadu Buhari has terminated a new defence procurement contract initiated by the members of his cabinet over allegations of fraud, an online news medium, Premium Times ,has reported.

The contract, signed off by the Federal Executive Council in December 2017, would have seen the contractor, HSLi, net $195 million in exchange for an undisclosed number of special mission aircraft, special mission helicopters and 12 fast intervention vessels for the Nigerian Navy.

The Guardian later reported that the contract would see Nigeria acquire three helicopters, three aircraft, three big battle-ready ships, 12 vessels and 20 amphibious cars to secure Nigerian waters.

Friendly offer?

The deal was midwived by Nigeria’s transport minister, Rotimi Amaechi. Critics described the deal as a classic defence contract designed to steal, with the transport minister playing the role of “The Government Guy”.

In the memo dispatched by the Chief of Staff to the president, Abba Kyari, directing the Attorney General of the Federation, Abubakar Malami, to terminate the contract, the president also ordered the National Security Adviser and the Nigerian Intelligence Agency to investigate how the contractor obtained security clearance for the job without an end-user certificate.

The president also ordered that the contractor should be made to supply items equivalent to the $50 million upfront payment which they received recently.

The contractor, HSLi, passed around as an “Israeli company” by the transport minister is not a registered business entity in Israel an online medium, PREMIUM TIMES’ investigation revealed.
They, however, hold close ties with Mitrelli, another Israeli Company which also holds close ties with the minister.

In 2012, while Mr. Amaechi was the governor of oil-rich Rivers state, he awarded a $140 million contract to Mitrelli (aka LR Group) to develop a farm in Etche, a suburb of Port Harcourt, the state capital. LR Group recently rebranded as Mitrelli as it transitioned into an arms business.
But, shortly after the contract was awarded, critics began raising questions about the administration’s hiring of foreign firms to secure Nigerian waters, saying it could undermine Nigeria’s sovereignty and national security.

The House of Representatives also launched an investigation into the contract following a petition from civic groups who complained that the contract was fraught with sharp practices.

In March, the House Committee on Public Petitions, which probed the contract, said its findings revealed that the contract would violate appropriation laws because it was not in the budget and recommended outright termination.

The lawmakers said HLSi Security was not a registered company in Israel and Mr. Amaechi failed to supply them with documents even after they had conducted eight hearings on the matter.

At the time the committee’s investigation was ongoing, Mr Amaechi said some corrupt persons were working overtime to frustrate the contract because they were benefiting immensely from the status quo.

“I won’t say who they are until it gets out of control,” Mr Amaechi said at an event in Warri in February. “We are still battling for the contract to take place, but if it gets out of hand, we will name them, including the security people.”

“These are people who make billions of dollars from the waters so they don’t want security on the waters, because if we secure the waters, all this rubbish will go,” the minister added.

He called on ship owners and other maritime operators to “behave like an activist” and petition the president to ensure that the contract remained in place as signed.

It was not immediately clear whether Mr Amaechi was referring to lawmakers at the time.

Executive probe

The recent termination memo lends credence to the lawmakers’ earlier assertions.

While the executive probe is underway, the Navy was directed to list its maritime security requirements for funding by NIMASA.

Given the efforts Mr Amaechi put into the contract, its termination could be seen as a major blow for the minister, a military source said.

“The minister carried us along in the contract,” a senior naval officer told PREMIUM TIMES under anonymity Friday night. “He was able to get the president to sign the contract, but it seemed the president felt deceived after learning that so many things were wrong with it.”

Presidential spokespersons Femi Adesina and Garba Shehu did not return text messages and phone calls for comments about whether the president carried the minister along in the termination.

A spokesperson for the Ministry of Transport, Yewande Shonaike, did not respond to requests for comments about how the ministry saw the development.

Mr Amaechi had long been considered one of Mr Buhari’s biggest loyalists in his cabinet, and he is largely seen as crucial to the president’s re-election efforts.