Is One of the World’s Biggest Lawsuits Built on a Sham?

A dying Irishman went for one last big score in Nigeria. The project failed, but a London tribunal says his company’s owed $9 billion and counting.


Gaslighting

The oilfield fires of the Niger Delta burn day and night. Metal pipes snake through the swampland, spewing flames so vast they cast the sky in apocalyptic orange. Southern Nigeria sits atop a bubbling stew of oil and gas. Companies want only the former, so they incinerate the latter. The industry calls it “flaring.”

For millions of Nigerians, flaring is a curse. It fills the air with toxic fumes that cause respiratory disease and cancer and later fall as acid rain, which damages homes and crops. It also wastes vast amounts of energy in a region where many villages lack electricity and cities suffer daily blackouts.

In 2008 the Nigerian government said it would end flaring by using oilfield gas to generate electricity. The minister of petroleum resources acknowledged that the challenge would be “enormous.” Converting gas requires it to be captured, transported, refined, and piped back to power plants and onto the grid.


Officials struggled to persuade big multinationals to invest in the required infrastructure, so concessions were granted to 13 smaller companies, some virtually unknown. One was Process and Industrial Developments Ltd., or P&ID, which was registered in the British Virgin Islands but had no website or track record. Its chairman was Michael “Mick” Quinn, a 68-year-old Irishman with a rakish mustache and decades of experience in Nigeria, mostly as a military contractor.

Quinn knew powerful people, including the petroleum minister, who guaranteed P&ID a 20-year supply of “wet,” or unrefined, gas for a plant the company would build. The raw material would be supplied for free, to be treated and returned at no cost. P&ID would instead profit from the byproducts, butane and propane. Everyone stood to benefit, not least the villagers whose homes would be lit by electricity rather than the wan glow of flaming methane.

Then the plan fell apart. The government failed to secure any waste gas from oil companies, let alone link up the necessary pipeline, and the plant was never built. In 2012, P&ID notified the oil ministry that it was suing for breach of contract in a London arbitration forum. After a set of closed legal proceedings, judges awarded P&ID $6.6 billion, one of the biggest amounts a company has won from a sovereign state. When Nigeria dragged its feet on payment, P&ID teamed up with a hedge fund and moved the case to public courts, where it could ask judges to seize state assets, including bank accounts and cargo ships.

In the summer of 2018, a man who’d worked for Quinn contacted Joseph Pizzurro, a veteran New York lawyer hired by Nigeria to lead its defense in the U.S. The caller wanted to talk about the P&ID case. “I don’t think it’s genuine,” the man said, according to an account he gave Bloomberg Businessweek on condition of anonymity because he feared for his safety. He told Pizzurro that Quinn had conspired with officials to profit from government projects that were doomed from the start and that P&ID was one of at least three such lawsuits involving Quinn. The caller couldn’t provide enough evidence to substantiate his claims, though, and he didn’t contact Pizzurro again.

This August, P&ID won a ruling from a London judge allowing the firm to start seizing Nigerian assets. Hailed as a vindication by Quinn’s company, it caused an outcry in Nigeria. The country’s finance minister said at a press conference that the size of the award, which has risen above $9 billion with interest, meant all Nigerians would pay a price. The chair of the central bank said that the case has affected monetary policy. Toward the end of the month, the justice ministry opened a corruption investigation into how the gas plant deal was struck. “The contract was designed to fail right from inception,” attorney general Abubakar Malami told reporters. If the Nigerian government is right, P&ID was an audacious scheme that had made unwitting accomplices of legal professionals, financial institutions, and politicians around the world.

The company and its founders remain elusive. A Nigerian newspaper recently published a list of unanswered questions about the firm: Where are its offices? How many people does it employ? How did such a tiny company win such a large concession? Quinn isn’t around to answer them; he died of cancer in 2015. But a close examination of his career, drawn from public records, leaked documents, and interviews with friends and former associates, shows that P&ID wasn’t the only Quinn project to end in disappointment, lawsuits, and corruption allegations. It was just the largest—the one that was supposed to provide his biggest payday.

Man in Mohair

Quinn grew up in Drimnagh, a tough neighborhood in Dublin. After leaving school as a teenager in the 1950s, he trained as a mechanic. An ordinary blue-collar life might have beckoned had one of his neighbors not started a show band, the Royal Olympics. These groups were unique to ’60s and ’70s Ireland: shiny-suited young men playing rock ’n’ roll or jazz, perpetually touring church halls and farm sheds to earn shoeboxes full of cash.

The Olympics needed a manager, and soon Quinn had a new career as one of the natty, ruthless handlers a BBC documentary labeled “men in mohair suits.” He ran some top acts: Daddy Cool & the Lollipops, Twink, Dickie Rock. An old friend recalls that he’d approach a singer and say, “How much are you earning? One hundred pounds a gig? I can get you 1,000.”

Quinn stuck with the industry for a while after the show bands’ popularity declined—newspaper reports suggest he arranged an Irish tour by Diana Ross and the Supremes—but there was more money to be made elsewhere. At some point in the ’70s he started working in Nigeria, either as an oil trader or a financier of cement deals, depending on which of the scattered accounts of his life you believe. He began profiting from a construction boom taking place in Lagos, which was then expanding with such chaotic abandon that hundreds of cement-bearing cargo ships were lined up at port waiting to dock.


He kept working in Ireland, too. In 1979 he and a partner, Brendan Cahill, formed an umbrella company with the resolutely dull name Industrial Consultants (International) to oversee their interests. They began working with the government, for example getting a public grant worth $450,000 to start a videocassette factory near Dublin. The project went bust within two years.

Quinn’s business drew on some powerful allies dating to his show band days. One of the closest was Albert Reynolds, a former music hall impresario who was elected to Parliament in 1977 and became prime minister in 1992. Two years after being elected PM, Reynolds was promoting Kent Steel, one of Quinn’s companies, as a potential savior of Irish industry. Kent had recently won 3 million Irish pounds (about $4.3 million at the time) from the European Union to explore cleaner technology for making steel—potentially a huge boon. Instead, the project produced nothing but some sketches and a bunch of debris.

Joe McCartin, then a member of the European Parliament, says he raised concerns with an EU official that the deal was a scam and was told, “Don’t worry. Your prime minister, Albert Reynolds, knows all about the project.” The EU did eventually start a probe into the grant, and McCartin, who’s now retired, says its investigators showed him a letter from Irish prosecutors relaying that a fraud had been committed but that they couldn’t identify the perpetrators. The probe was eventually closed without penalty; the EU refused to fulfill a freedom of information request about the case, citing privacy rules. Reynolds passed away in 2014.

Quinn’s name came up again during a nationwide corruption inquiry in Ireland. The Mahon Tribunal, as it was eventually known, lasted for 14 years, compiling evidence of graft on an epic scale. Quinn was called as a witness in June 2007, one of the few times he ever spoke on the record. The tribunal wanted to know more about relationships Industrial Consultants had with Frank Dunlop, a shady lobbyist, and Liam Lawlor, a corrupt Republican MP who’d resigned in disgrace before being killed in a 2005 car crash outside Moscow.


Quinn denied knowledge of invoices that bore his company’s name—payments for golf fundraisers, he guessed—and said he thought his signature had been forged on checks. He had no recollection of many of his dealings with Dunlop. “You are a singularly unhelpful witness,” Alan Mahon, the presiding judge, told him. “What you are telling us is nothing, absolutely nothing.” The tribunal later found that tens of thousands of pounds had flowed from Quinn’s companies to Lawlor, but Quinn wasn’t recalled to the stand, and neither he nor Industrial Consultants faced any action.

By then, Quinn had developed a fearsome reputation. Several former associates told Businessweek they were scared to speak on the record about him, because they believed he had ties to Irish paramilitaries; one said Quinn told him his father had been in the original Irish Republican Army in the 1920s. Employees introduced him as “the chairman,” and he employed a man with a pugilist’s squashed nose to drive guests around Dublin, apparently without great regard for red lights. A former Quinn associate says that when Quinn’s daughter ended a brief marriage to David Boreanaz, an American actor best known for roles on Buffy the Vampire Slayer and Angel, Boreanaz called Quinn to make sure there was no bad blood between them. Boreanaz’s manager didn’t respond to requests for comment.

The Trouble With Nigeria

Throughout the 2000s, Quinn lived a kind of double life, divided between Nigeria and a comfortable suburban house near Dublin. At home he was Mick from Drimnagh, living with his wife, Anita, who’d been his childhood sweetheart, and their two Doberman pinschers. On Tuesday nights he’d drop Anita off at bingo, then pick up fish and chips for dinner.

Life in Nigeria was very different. The country’s freewheeling capitalism was fraught with risk and opportunity. The writer Chinua Achebe detailed the climate in his 1983 polemic The Trouble With Nigeria: Contracts with the military government were currency, doled out by senior politicians to allies and friends as the public bore the burden of hidden kickbacks, inflated prices, and stolen materials. Military rule ended in 1999, but democratic Nigeria was proving just as restive and complex. There were tribal uprisings in the Niger Delta and kidnappings and religious conflict elsewhere.

Quinn nevertheless thrived, befriending presidents and civil servants alike. He and Cahill used a company called Marshpearl to bid for lucrative military contracts, initially registering the name in Ireland, then in 1999 using the Panama-based law firm Mossack Fonseca & Co. to create Marshpearl Ltd. in the British Virgin Islands. To the outside world, the BVI company was practically untraceable. Mossack Fonseca documents leaked to the newspaper Süddeutsche Zeitung and made available to Businessweek by the International Consortium of Investigative Journalists show that Marshpearl Ltd.’s directors were nominees, paper executives whose sole job was to sign documents. (Reached by phone, one of them, Nigel John Carter, a Geneva-based trusts specialist who was also a director of another Quinn BVI vehicle called Kristholm Ltd., said, “I’ve never heard of those two companies.”)

relates to Is One of the World’s Biggest Lawsuits Built on a Sham?
QuinnSOURCE: THE PHOENIX
Marshpearl sponsored a local polo team, giving Quinn an excuse to mix with the Nigerian ruling classes. His sons attended elite private schools with the sons of politicians and generals, who asked Quinn to help them acquire helicopters, Japanese motorcycles, and more. On the golf course back in Ireland, friends recall, Quinn would pick up the phone to talk to various officials or military leaders. “Did you get them guns?” one friend remembers him asking in his distinctive Drimnagh drawl. His golf buddies were never sure if he was joking. His contacts included Theophilus Danjuma, who’d risen to prominence in the ’60s by leading a bloody coup against Nigeria’s military ruler. Danjuma went on to become a general, then entered business and eventually politics, ascending to defense minister in 1999. He later sold a stake in a Nigerian oil field to a Chinese state company, helping make him a billionaire.

One of the few people who would speak on the record about Quinn’s life in Nigeria is Neil Murray, a friend of 30 years who was involved in several Quinn projects there. Sitting one night at the Abuja Hilton piano bar, a favorite haunt, Murray wasn’t hard to spot: a gray-haired figure so hunched over he was bent almost double, puffing cigarettes and chatting with businessmen and prostitutes, who called him Papa. After initially accusing a Businessweek reporter of being a spy for the Nigerian government, he agreed to talk. “Mick knew Obasanjo. He knew Yar’Adua,” Murray said, referring to former presidents Olusegun Obasanjo and Umaru Musa Yar’Adua. “He knew everyone.”

Among the projects Murray was involved in was a contract to repair and upgrade 36 British-made Scorpion tanks at an abandoned plant at Bauchi, in the dusty heart of Nigeria. It had all the hallmarks of Quinn’s deals in the country: complexity, misdirection, and a substantial payday for the middleman. “There was a subsequent contract, and a subsequent contract, and a subsequent contract,” Murray said. “It was an ongoing process.” Quinn personally recruited military experts to manage the work and find replacement parts. At one point, Danjuma visited the site.

Several people involved in the venture described each vehicle as an opportunity for profit. Petrol engines were replaced with diesel engines. New radios were installed. When faulty valves needed replacing, one former employee said, he found a British supplier for a few pounds a unit. “Too cheap,” he remembered Quinn telling him. They found costlier valves elsewhere. The more expensive the new part, the bigger Marshpearl’s cut.

A memo viewed by Businessweek that circulated among Quinn’s team noted that Marshpearl had charged the Nigerian army for undelivered tank parts, making his organization “vulnerable.” But the company kept winning contracts, in spite of this hitch and others. It’s not clear how many millions of dollars Nigeria spent on the Bauchi project, but the relationship likely made Quinn a fortune.

For one contract, a spinoff from the main deal, his company sought to supply about 4,000 rounds of tank ammunition made by Belgian defense company Mecar SA. A January 2005 memo outlining Marshpearl’s plan says Quinn’s staff told Mecar they would handle bidding, contracts, and billing. Mecar’s managers “do not want to know the details as they would be embarrassed with Belgian authorities and U.S. owners,” the memo said.

The blueprint called for Marshpearl to establish a company called Mecar SA, register it in Cyprus, and open a bank account for the new offshore entity to avoid Nigerian taxes on the income. The original Mecar would write up a bid for the contract and send it to Marshpearl, where the document would be scanned and altered to increase its value by 20%—commission for Quinn and his friends. Payment to the original Mecar would be routed through the offshore one. All documentation was to be delivered by hand.

The “paper trail” was Marshpearl’s greatest area of concern, the memo’s author wrote, without explaining why. Broadly speaking, while offshore companies have legitimate purposes, they’re also favored by those trying to avoid tax or government scrutiny or hide illicit income. In some jurisdictions, secrecy laws make it virtually impossible to find out who owns them. Registering a company with a virtually identical name to a separate, legitimate business would have the effect of further obscuring the real beneficiaries.

To a watchdog or another outside observer, the Mecar arrangement would look like a simple transaction between a respected manufacturer and the army, with the middleman getting its cut. A tender bid document sent by the offshore Mecar to the Ministry of Defense a few months after the memo’s date placed the contract’s ultimate value at €4.9 million ($5.6 million), meaning Marshpearl would have made almost a million euros.

Shown the memo at the Hilton bar, Murray said, “Very clever.” He didn’t see anything improper in the deal’s structure but added, “I wasn’t directly involved.” A spokesman for Mecar’s current owner, Nexter Group, said the Marshpearl deal took place before it acquired the company in 2014 and that it complies with rules and regulations.





Continued in the link and below

With Tope Alake, Matthew Campbell, Gavin Finch, Daryna Krasnolutska, the International Consortium of Investigative Journalists, and Süddeutsche Zeitung




https://www.bloomberg.com/news/features/2019-09-04/is-one-of-the-world-s-biggest-lawsuits-built-on-a-sham?fbclid=IwAR19HGYGS3S0sX90_6xSACQ_2IJrp8LT_5g6SiawxrT0cd-kHCm6KosbtDM