NNPC disowns ‘illegal’ JP Morgan account

Channels Television  
Updated July 3, 2012

The Nigeria National Petroleum Corporation (NNPC) on Tuesday disowned the ownership of the controversial JP Morgan account.

Speaking before the Joint Senate Committee investigating the management of fuel subsidy, the NNPC Group Executive Director (finance), Bernard Otti said the JP Morgan account was opened by the Central Bank of Nigeria (CBN) on its behalf in 2002 and that the CBN remained the sole signatory to the account till date.

The Minister of Finance, Ngozi Okonjo-Iweala had on Monday exonerated the ministry from knowing any details about the account.

Mr Otti said the CBN operated the account on behalf of NNPC right from the onset when the account was opened in the US.

However, the CBN had in several previous meetings with the committee denied having anything to do with the account.

The controversial account, into which billions of dollars oil monies are being paid over the years, was opened by Nigerian officials with an American bank J.P. Morgan and is raising dust at a Senate committee hearing on the management of the fuel subsidies.

Over N2.7 trillion was spent by the NNPC on joint venture cash calls in 2005-2008, according to extractive industries watchdog NEITI, and the funds passed through what the Senate committee is now calling an illegal account.

Describing the account as unconstitutional, the committee chairman, 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 law.

Mr Abe said NNPC has been operating the J.P. Morgan account to save proceeds from crude oil sales while the Federal Government draws the monies at will.

This, he said, is a violation of the Constitution. He also said it fuels hostilities between the states and Federal Government.

“That account cannot be legally maintained because the proceeds from the sales of crude oil ought to be paid directly to the Federation Account,” Mr Abe said.

“It is against the constitution to keep the monies in an account with J.P. Morgan. Even if it is paid into that account, there should not be a withdrawal without the approval of the National Assembly.

“So, even transferring it back into the Federation Account is unconstitutional. NNPC is a creation of 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.”

Abe said Section (80) (4) of the 1999 Constitution makes it illegal to lodge the monies in the J.P. Morgan account.

The committee vowed to explore means to ensure that accounts not known to the national assembly are legalized and monies paid directly into the federation account.