Thursday, June 08, 2006

Nugent, Wilson, The Kitchen Sink Figure In Jefferson Probe, Silverstein Says

If you read the last post, you will see that former LA Times Washington bureau reporter Ken Silverstein, whose article in the Times put ERHC Energy of the map back in May 2003, picked up on the African Energy Intelligence article and said he thinks the search warrant is linked to Rep. William Jefferson because African Energy said they thought it was linked.

The only reason they think it was linked, I told him in a note tonight, is because ERHC On The Move said we thought they were linked
on May 5.

Yesterday, I'd written, "The article is given away when a personal opinion that ERHC is linked to Jefferson awkwardly peers out of a long, allusion-filled paragraph:

We understand the operation was linked to the FBI investigation into Jefferson.

And today, Ken said:

On May 22, I reported that investigators recently hit ERHC with a search warrant for “documents related to correspondence with foreign governmental officials or entities in São Tomé and Nigeria.” According to my source and to the report in African Energy Intelligence, the warrant is linked at least in part to the Jefferson investigation.

And here is what I said in my May 5 post:

According to information received by ERHC On The Move, however, there may a connection between the search warrant served yesterday and an investigation into the bribery allegations concerning Rep. William Jefferson, Democrat of Louisiana.

This blog has received several requests for information in association with that investigation from Washington-based investigative reporters, who have focused their inquiries on ERHC Energy investor Phil Nugent. It is not known whether Nugent or Jefferson is a target of the current investigation.

Here is Ken's June 7 article from the Harper's Magazine Website blog, in full:

William Jefferson: Tollbooth Operator on the Road to Africa
Posted on Wednesday, June 7, 2006. By Ken Silverstein.

SourcesUpdate: the item we reported yesterday on the home jointly owned by Letitia White, a lobbyist and former staffer to Representative Jerry Lewis, and an owner of defense contractor Trident Systems, has become part of a much larger unfolding story. Check out TPMuckraker [1][2][3], which also reported the story yesterday, and the New York Times, and look in your newspaper tomorrow. A number of reporters will likely be weighing in.

As has been widely noted, Rep. William Jefferson, the Louisiana Democrat who reportedly keeps his cash in the icebox, is under investigation by the FBI for allegedly taking a bribe from the owner of iGate Inc. to arrange deals for the high-tech company in Nigeria and several other African countries. According to court records, the FBI is also looking into “at least seven other schemes in which Jefferson sought things of value in return for his official acts.”

The invaluable African Energy Intelligence, a Paris-based newsletter, reported this week that several of the seven cases “involve oil groups seeking to establish themselves” in Nigeria and other African countries, including Equatorial Guinea, Congo-Brazzaville, and São Tomé. Jefferson frequently met the leaders of all those countries, the newsletter said. I hadn't previously heard anything on a Congo-Brazzaville–Jefferson connection, but I have been told by a source familiar with the investigation that the congressman's links to Equatorial Guinea are under scrutiny. There's strong evidence pointing to a São Tomé connection as well.

With the support of lawmakers like Jefferson, Africa has emerged as a major American oil supplier in the last decade. Jefferson and his staff strongly supported the African Oil Policy Initiative Group (AOPIG), an ad hoc panel of U.S. government and energy industry officials that described African energy as a “vital interest” of the United States. In an article in 2003, Alexander's Gas & Oil wrote that Jefferson was calling for a “full-fledged makeover of the U.S. strategic relationship with Africa” to take advantage of its “petroleum potential.”

In November of 2000, Jefferson led the first-ever Congressional delegation to Equatorial Guinea, taking along representatives from Baton Rouge–based Shaw Global Energy Services and from CMS Energy, which had extensive interests in the country that were later sold to Marathon. When it got involved in Equatorial Guinea in the mid-1990s, CMS allowed a company controlled by the country's president, Teodoro Obiang, to obtain a stake in two joint ventures. Even by the standards of Equatorial Guinea, a textbook kleptocracy, this was a friendship with remarkable benefits. Obiang put no money down for his stake—which was worth about $29 million as of 2004—and received $1 million in dividend payments between 2003 and 2004 alone, according to a Senate investigation.

The government of Equatorial Guinea was so pleased with Jefferson's visit that it presented him with a key to the capital city of Malabo. Jefferson also stopped in São Tomé and Nigeria on the trip; Shaw Global picked up the congressman's travel tab, which came to $6,872. After he returned home, Jefferson began lobbying for the U.S. to reopen its embassy in Equatorial Guinea—it had been closed in the mid-1990s, in part because the government threatened the American ambassador—a step the Bush Administration reauthorized in late 2001.

Another Louisiana firm with ties to Jefferson is Schaffer Global Group. Back in 2002, according to interviews and documents I have received, Schaffer Global was unsuccessfully chasing potential business deals in Equatorial Guinea in conjunction with several other firms, including a lobbying and business-development company called AfricaGlobal that worked for the Obiang regime (and which is now owned by Schaffer). In addition to trying to drum up American investment in Equatorial Guinea, AfricaGlobal also sought to improve ties between Obiang and the United States. At least three people from Schaffer or AfricaGlobal made modest campaign contributions to Jefferson; one of them, Warren Weinstein, served on the AOPIG with Melvin Spence, an aide to the congressman.

Gustavo Envela, an Equatoguinean national who lives in the United States and who briefly served as a consultant to AfricaGlobal, said that Jefferson was a key congressional ally of AfricaGlobal and was enlisted to help in Equatorial Guinea “because of his close relationship” with the Obiang regime. (I'm not suggesting that any of these firms bribed Jefferson, only that the congressman was close to the hideously corrupt government of Equatorial Guinea.)

A second source familiar with Equatorial Guinea told me that when Obiang came to Washington for visits, Jefferson would meet with the dictator at his hotel (which on at least one occasion was the Hay-Adams). This person also said that one of Jefferson's Hill aides was always assigned to accompany government officials from Equatorial Guinea when official delegations were in town.

Jefferson also has interesting ties to São Tomé and to some Americans doing business there, specifically people linked to ERHC. That's the small Texas-based firm that had zero revenue, one full-time employee, and a controversial Nigerian owner (whom I'll discuss below), but which obtained lucrative oil rights in tiny São Tomé. On May 22, I reported that investigators recently hit ERHC with a search warrant for “documents related to correspondence with foreign governmental officials or entities in São Tomé and Nigeria.” According to my source and to the report in African Energy Intelligence, the warrant is linked at least in part to the Jefferson investigation.

Here's what ties Jefferson to people from ERHC and suggests that the warrant slapped on the firm might be part of the Jefferson story:

In February 2004, Jefferson again traveled to Nigeria, São Tomé, Equatorial Guinea, and Cameroon. That trip was paid for by iGate, the firm at the heart of the current investigation, and several other companies, including one that is now called Global Environmental Energy Corp (GEEC). According to records filed with the Louisiana Secretary of State, GEEC's principal office is in the Bahamas; its president is Noreen Wilson, and its registered agent is Phil C. Nugent. The latter is the son of Phil H. Nugent, a Houston-based oil and gas consultant who, when I met him three years ago, was a major shareholder in ERHC and major promoter of the firm. Noreen Wilson is a Beltway lobbyist and ERHC shareholder who helped negotiate the company's deal in São Tomé. (Phil Nugent Sr is also linked to GEEC through Green Energy Management, a firm that partnered with GEEC and of which he was chairman.)

So GEEC, which helped pay for one of Jefferson's trips to Africa (a trip that included a pit stop in São Tomé), has ties to ERHC, the company with the big oil stake in São Tomé. As for ERHC's owner: that would be Emeka Offor, a controversial billionaire with close ties to Nigerian political figures, including vice president Abubakar Atiku. The Nigerian vice president owns a home in Maryland that was searched as part of the Jefferson investigation, and court records show that the congressman is alleged to have planned to bribe him in order to advance iGate's interests in Nigeria. A story published last December by a Nigerian journalist reported that Offor was “being investigated by a branch of the American government,” and suggested it might be tied to money “said to have been paid to some U.S. congressional contacts.” (Offor disputed the claim.)

There is one final iGate connection, which might well be nothing more than a coincidence. Court papers show that Jefferson told a cooperating witness in the probe about a firm called Global Energy & Environmental Services (GEES), which was controlled by his children and run by his son-in-law. The congressman allegedly arranged for GEES to benefit financially from his efforts on behalf of iGate.

Africa's tragedy is that its great resources have been used to enrich a tiny number of colonizers, post-colonial strongmen, and their foreign friends. That may well turn out to be the real story of the Jefferson affair.

In defense of ERHC, I have written the noted journalism blogger, Jim Romenesko, to ask for coverage of this issue:

Jim, you may have been hearing about an investigation of Rep Jefferson that touches on other companies he may have helped, and in particular ERHC Energy. ERHC has been a bad guy in the eyes of the world media for a long time, but I believe it has been a scapegoat to take our eyes off larger crimes involving ExxonMobil, Chevron, Total, Devon Energy and several other larger players in Equatorial Guinea and other parts of West Africa.

The Los Angeles Times ran a brief several years ago about Senate Commerce Committee hearings into the dealings of these and other firms with President Obiang of Equatorial Guinea. The hearings abruptly stopped, probably because Commerce Committeee chairman Sen. Ted Stevens didn't want the probable explorers of ANWAR tainted. Ironically, almost all were either our partners at one time or were our rivals for the same blocks of the Nigeria-Sao Tome and Principe Joint Development Zone, probably the largest and richest new oil field in the world.

It is a large and complex story, but essentially, ExxonMobil in particular and Anadarko Petroleum wanted a block of the Sao Tome-Nigeria Joint Development Zone - Block 4. In adjoing Block 1m Chevron and Exxon have already struck a huge reservoir - at least according to Chip Cummings of the WSJ in early May, who said they discovered a billion barrels and that ERHC had been served with a search warrant because of links to Nigerian and Sao Tome officials "uncovered" by a report funded by George Soros, then a major stockholder in Pioneer, ERHC's partner in Blocks 2 and 3 of the JDZ. Chevron's May 31 press release said they discovered "at least 100 million barrels."

The report sank ERHC's stock, but it bounced right back because insiders knew that the two governments, in a formal statement, discredited it (www.nigeriasaotomejda,com, Feb. 8 press link). Cummings ommitted that fact. Ken Silverstein, the former Washington reporter for the LA Times, wrote a 1,500-word piece on ERHC Energy in late May, 2003 that put the company on the map. Since then, major stories have appeared about in the Houston Chronicle, by David Ivanovich, and by Norval Scott from London in the premium Dow Jones New Service; a book, The Christmas Strike by Joel Rosenberg, and a New Yorker story also focused on the company.

Now Ken is writing a blog for He picked up on the WSJ error (in not reporting the discredited report by Sao Tome's attorney generral) and did a follow-up yesterday linking a search warrant served at the request of the Sao Tome AG to the Jefferson probe. But there is no evidence of that - he is blowing smoke. In fact, I was the source, back on May 5, for an observation that the search warrant served on ERHC and the Jefferson scandal may be linked.

Here is the story: While some very big players tied to specific bribery allegations by the Senate Commerce Committee run free, the media is piling on ERHC Energy, an oil company with three or four employees that is African in origin, a rare thing. We have already been told by the company of all suspect payments it made in 2002, namely, a $100,000 contribution to the Sao Tome campaign of its current president, and payment of a scholarship that was required under a contract ERHC made public in SEC filings even before that, where the benficiary was the son of a prominent oil official in Sao Tome. The AG's report - conducted by R. Dobie Langenkamp, who is a U. of Tulsa Law School prof with very close ties to dozens of Exxon, Anadarko and Chevron officials) concluded that there was no evidence ERHC had bribed anyone, but asked the US to investigate the matter. That gave Greg Pensabene, Anadarko's VP for Government Affairs, who is married to the chief counsel of the Senate Energy Committee, Judy Pensabene, an opportunity to work his magic. And Exxon is not exactly without influence in Washington, either. So, US Marshals served a search warrant on ERHC looking for correspondence with Nigerian and Sao Tomean officials in early May. Nigerian VP Atiku Abubakar, whose home in Potomac, Md., was searched earlier, was cleared of any wrongdoing by the search (Ken refers to him as Abubakar Atiku, the reverse of Atiku's website). We believe ERHC will be cleared, too. But Ken, echoing the CMS group bi-monthly publication African Energy Intelligence, which echoed me, is reporting a link to the Jefferson probe. I blogged about that confluence today: (I pasted in the preceding post)

I hope you will find a way to report on this issue in your column, and if you can't, please feel to pass on this info to anyone you please. Thanks for your time and attention, which I know is hard to come by.


Joe Shea

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