The Houston Chronicle's David Ivanovich, the Washington-based investigative reporter who at my suggestion did the front-page above-the-fold article in February 2005 that nearly doubled the company's share price, has returned with another dramatic headline but a disappointingly insipid story that basically restates everything the New Orlean Times-Picayune reported earlier this year, adding some of the stuff gathered by Harper's Ken Silverstein, and reports once again that no one has any evidence that ERHC Energy ever did anything wrong unless it was to beat ExxonMobil, Chevron and Anadarko out of many billions of barrels of oil by being there first and riding a maelstrom all the way to strong equity positions in the Gulf of Guinea's Joint Development Zone - which ERHC Energy CEO Sir Emerka Offor was largely responsible for creating.
Offor's real error was in not getting out when he was offered a trifle for the company and instead stayed in the game all the way through the phony Sao Tome Attorney General's probe of the company, which halved the share price bur had no effect at all on revenues.
Because Ivanovich is actually a capable investigator, it is profoundly surprising that his editors let him risk his reputation by reporting thrice-reported gossip as a new drama.
What has happened, clearly, is that Exxon and Chevron, Houston power players, conned the paper into publishing a story to keep the ERHC non-scandal alive at a time when it appears that all the FBI and a Washington-based U.S. Atty. has on them is a folder of news clippings marked "William Jefferson."
Ivanovich probably feels like an idiot today, and it will only get worse when no indictments of ERHC are handed down by the Jefferson Federal grand jury.
All of the players except the U.S. Atty. are conveniently ignoring key parts of this story: 1) that whatever the involvement of Phil Nugent, Sr., Noreen Wilson and others with the company, it was a long, long time ago; 2) that Nigeria and Sao Tome have both formally rejected the Sao Tome Atty. General's report on ERHC; 3) that LETH, later known as GEEC and now GEECF, had no relationship with ERHC, and that Nugent and Wilson were investors in LETH and GEEC at least four years after they left ERHC; and 4) that the real story is how oil giants are manipulating the Bush Administration behind the scenes, probably through the husband of Senate Energy Counsel Judy Pensabene, Greg Pensabene, who is Anadarko's VP for Governmental Affairs and with his wife is a close friend and former student of the author of the Sao Tome probe report, a Tulsa law professor whose work was paid for by ERHC's erstwhile partner, Pioneer shareholder George Soros, through donations to the Senior Lawyers Project, which approached the Sao Tome Atty. General, Arlindho Pereira, to do the probe after ERHC walked away with Exxon and Anadarko's multi-billion dollar marbles in three blocks of the Joint Development Zone. The real story is that there is no story, and the majors really need there to be a story and a scandal if they are to capture ERHC's rights without paying good money for them.
Absent that information, the story is yet another example of how Big Oil can call the shots at this nation's major news organizations with complete impunity, whether there are any facts and evidence to back up their smear campaigns or not.
Meanwhile, what's happening with the bribery investigation by Sen. Ted Stevens' Senate Commerce Committee against Exxon, Chevron, Pioneer, Marathon and others in Equatorial Guinea? Complete silence, please, for another few years.
Here's the gossip from the Chronicle, to their shame:
Sept. 18, 2006, 1:28PM
Small Houston oil company at the center of global drama
ERHC's story becomes oddly intertwined with FBI bribery probe
By DAVID IVANOVICH
Copyright 2006 Houston Chronicle Washington Bureau
WASHINGTON - Initially, theirs was a tale to rival that of any legendary Texas wildcatter.
A little-known Houston oil company lands a potential blockbuster deal in the crude-rich waters off West Africa and appears poised for a big payoff.
Negotiating the rocky shoals of West African politics and threats of arrest for sedition, ERHC Energy, a tiny company with no experience in offshore drilling, secures the rights from the government of Sao Tome and Principe to explore a stretch of the Gulf of Guinea thought to hold up to 14 billion barrels of crude.
Then the FBI barges in.
And suddenly, this obscure company's story becomes oddly interwoven with one of Washington's biggest scandals, a bribery probe targeting a Louisiana congressman.
Nine years after wading out to Sao Tome to make its fortune, ERHC — with just two employees — has yet to sink a well. Whether it ever will remains uncertain.
ERHC's legal troubles came to light in May, when FBI agents, clad in bulletproof vests carted off 118 boxes of documents from the company's Westheimer offices. The government was investigating possible "things of value" paid to officials in Nigeria and the tiny island-nation of Sao Tome, according to an FBI affidavit filed in U.S. District Court in Houston.
The FBI has not revealed what information sparked the raid or exactly how all the players in this story might be connected.
To ferret out the truth, investigators will likely be examining a bizarre thread linking an elusive Nigerian billionaire, a polygamous Nigerian politician and Rep. William Jefferson, the New Orleans Democrat recently made infamous for allegedly stashing $90,000 in possible bribe money in his freezer.
ERHC achieved its enviable position — at least in part — by approaching Sao Tome long before most other companies took notice of the former Portuguese colony.
Dealing with a government little acquainted with the world of oil, the company negotiated a highly advantageous deal in 1997.
But the negotiations, and relations with the government, proved stormy. ERHC was forced to renegotiate the terms of its agreement, not once but twice.
At one point, former ERHC Chief Executive Officer Geoffrey Tirman went on Sao Tomean television and accused government officials of corruption, only to have to flee to the airport to avoid charges of sedition.
The company's prospects appeared bleak.
Strategy paid off
Enter Emeka Offor, or "Sir Emeka Offor" as he is styled, a wealthy Nigerian businessman known to have close ties with both Nigeria's late dictator, Gen. Sani Abacha, as well as the country's current vice president and presidential candidate, Atiku Abubakar.
Hoping to interest him in the fate of ERHC, Phil H. Nugent, a Houston energy consultant and major ERHC investor, sought Offor out.
"He had his politics covered," Nugent said in an interview.
Nugent's strategy paid off. Offor proved instrumental in pushing Nigeria and Sao Tome to resolve a long-running border dispute and create an offshore development zone, where international oil companies could bid for the rights to drill.
ERHC's contract with Sao Tome gave it preferential rights in this new Joint Development Zone. In early 2001, as the two countries were creating the joint development area, Offor's company Chrome Energy bought a controlling stake in ERHC.
Despite the company's lack of experience, U.S. producers Pioneer Natural Resources, Devon Energy Corp. and Noble Energy teamed up with the company to explore offshore.
Then, things fell apart.
The company's American partners withdrew.
In November, its independent auditor, Pannell Kerr Forster of Texas, resigned. "No reason for the resignation was specified," ERHC said at the time.
A few weeks later, Sao Tome's then-Attorney General Adelino Pereira called on U.S. officials to investigate ERHC's dealings in the region.
Suggestions of impropriety
"At every stage," the attorney general said in a report, are suggestions ERHC and Offor "may have made improper payments to government officials."
The report cited a $100,000 payment Offor's Chrome made to a company controlled by Sao Tomean President Fradique de Menezes, and the role of Foreign Minister Mateus "Nando" Rita played helping to renegotiate ERHC's contract while also holding 500,000 shares of company stock.
Daniel Keeney, an outside public relations consultant acting as spokesman for the company, said, "We care about perceptions of ERHC Energy, and we have been working to fully understand any concerns expressed about our activities in the Joint Development Zone."
In January, ERHC Chief Executive Ali Memon resigned. Six months later, his successor, Walter Brandhuber, would follow him out the door. Company officials said Brandhuber's departure was not related to the ERHC investigation.
The company's chief financial officer, Franklin Ihekwoaba, also stepped down, acknowledging "he should not have used the designation 'CPA',"as he had been doing on company records.
ERHC was able to rebound, announcing new deals with Swiss firm Addax Petroleumand — in February — with China's Sinopec Corp. to replace its former American partners.
Within weeks of the Sinopec deal, the company's stock price doubled, and things were looking up.
FBI sought documents
On May 4, more than a dozen FBI agents swarmed into the company's Westheimer offices.
Investigators were looking for records pertaining to ERHC's negotiations with Nigerian and Sao Tomean officials, the FBI said in an affidavit.
They wanted any documents referencing Vice President Abubakar, as well as Nigerian President Olusegun Obasanjo and Sao Tomean President de Menezes, and information about stock transfers to a variety of offshore entities.
They also wanted any information about dealings with "Frontier Technology c/o Phil Nugent" at a Bellaire address, court documents show.
Nugent told the Houston Chronicle that he once lived at that address but denied having any knowledge of Frontier.
FBI officials also wanted to see documents regarding "Packard & Packard," presumably Packard, Packard & LaPray, a Beaumont law firm that handled a minority shareholder lawsuit against the company.
The shareholders alleged ERHC's former management violated federal securities laws, filed false information to the Securities and Exchange Commission and used misleading accounting practices.
When Offor was considering buying controlling interest in ERHC, his company contacted the law firm. The shareholders agreed to settle. And the attorneys' fees were paid for in the form of ERHC stock, said Daniel Packard, a partner in the firm.
After raiding ERHC's offices, FBI officials itemized all materials seized. Buried deep in a long list of materials was an intriguing folder labeled "William Jefferson."
Mum on folder
Company officials won't say what was in that folder. And no court documents unsealed to date specify a link between the ERHC investigation and the Jefferson bribery probe.
Indeed, company officials discount any connection.
"At this time, we have not been made aware of any facts to suggest that the U.S. government investigation of ERHC is in any way related to the ongoing investigation of Congressman Jefferson," ERHC spokesman Keeney said.
Both the Justice Department and Jefferson refused to discuss the case.
This much is known:
Jefferson has been on the FBI's radar since March 2005, when an informant accused the eight-term congressman of being part of a possible bribery scheme. The FBI began tailing Jefferson, secretly recording his conversations with the informant about a plan to help a Kentucky telecommunications company known as iGate win contracts in Nigeria and Ghana.
Jefferson has not been charged. But both a former Jefferson staffer and iGate's one-time CEO have pleaded guilty to bribery-related charges.
In secret tapes made by the FBI informant — wearing a wire — Jefferson is heard making plans to pay a $500,000 bribe to Nigerian Vice President Abubakar, according to an FBI affidavit. In July 2005, FBI agents videotaped Jefferson allegedly receiving $100,000 in marked bills from the informant.
Four days later, FBI agents raided Jefferson's Washington apartment and discovered $90,000 hidden in his freezer. The serial numbers on the chilly $100 bills matched those photocopied by the FBI before the sting operation.
Though they also searched the Maryland home of one of Abubakar's four wives, no marked bills were found.
"The vice president has no relationship with Mr. Jefferson, public or personal, other than the usual diplomatic courtesies extending to a high-ranking U.S. official," said Edward Weidenfeld, an attorney for Abubakar in Washington.
Nigeria, Sao Tome visits
None of the documents in the Jefferson probe made public to date mentions ERHC or Offor. But, the FBI affidavit says, "Law enforcement agents have gathered evidence linking Congressman Jefferson to at least seven other schemes in which Congressman Jefferson sought things of value in return for his performance of official acts."
Jefferson, who has served as co-chair of the Africa Trade and Investment Caucus, visited Nigeria and Sao Tome in 2004, a trip paid for in part by iGate and "Leth Energy Inc.," according to PoliticalMoneyLine, an organization that tracks political fundraising and spending.
Two former ERHC executives — one-time president James R. Callender Sr. and former CFO Noreen Wilson — have held positions at LETH, or Life Energy & Technology Holdings Inc., according to SEC and Louisiana state records.
ERHC investor Nugent also did business with the firm, which in August 2004 changed its name to Global Environmental Energy Corp.
Neither Callender nor Wilson could be reached for comment.
Earlier this month, Nigerian authorities revealed that the U.S. Justice Department had requested information on LETH as part of the Jefferson probe.
Sao Tomean officials aren't commenting.
"Nobody spoke about that publicly," said Luis dos Prazeres, executive director of Sao Tome's National Petroleum Agency.
Offor could not be reached. And Abubakar, facing a barrage of criticism at home, did not respond to questions.
His attorney Weidenfeld did assert, "He's had no role with ERHC."
What part Jefferson may have played in the ERHC saga, if any, remains unclear.
"He might have had a meeting here and there," Nugent said. "(Jefferson) was kind of bobbing and weaving on his own."