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October 10, 2010

Report Accuses British Banks of Fueling Nigerian Corruption

A new report says British banks have accepted millions of dollars from Nigerian politicians accused of corruption. 

The 40-page Global Witness report accuses five major British banks of not doing enough to monitor their customers.  It says as a result two former Nigerian governors accused of corruption managed to funnel vast sums of cash into British banks.

Global Witness campaigner Robert Palmer says one of the governors, Diepreye Alamieyeseigha, brought around $4 million into Britain and deposited it with the Royal Bank of Scotland, which is now majority owned by British taxpayers.

"This account received 2.6 million pounds.  Of that, 1.5 million pounds was a corrupt bribe paid by a contractor to secure a contract," Palmer said.

He says the second governor, Joshua Dariye, was also depositing major sums into British banks.  He says Barclays bank accepted major cash deposits of as much as  $75,000 during the course of several years.

"According to the court documents, he made several cash deposits of tens of thousands of pounds.  In one case, I think it was almost 50,000 pounds, in cash," Palmer said.

The Global Witness report covers the years from 1999 to 2005.  It is based on court documents from cases brought by the Nigerian government to win back funds it said had been stolen by the two former governors.

The report says the banks need to do more to better regulate who is using their services.  And it says Britain's financial regulator, the Financial Services Authority, has to send out a clear signal that corrupt money is not welcome.  The report is critical of the Financial Services Authority for not taking action against banks that fail to stop money laundering.

The FSA refused to comment about the specific Nigerian cases but, speaking to VOA, spokesperson Sarah Bailey said earlier this year the financial regulator levied a heavy fine against the Royal Bank of Scotland for failing to sufficiently investigate its customers.

None of the five banks would speak with VOA on the record. But in a statement an HSBC spokesperson said "rigorous and robust" compliance procedures had been followed.

Palmer says whatever the banks say they are doing, at some point the system is failing because millions of corrupt dollars have made their way into British banks.

"Large scale corruption is simply not possible without banks willing to handle such dodgy payments," Palmer noted. "You need a bank to take the deposit.  You need a bank to make a wire transfer, and you need a bank if you want to sustain a rather nice, luxury lifestyle in Britain.  The banks are facilitating corruption by processing these payments."

Alamieyesheigha was accused of corruption after more than $2 million was found at his London home.  He later pleaded guilty to money laundering charges.  Dariye was arrested in 2004 after he bought homes worth millions of dollars, although his yearly salary was less than $100,000.  He has denied wrongdoing.