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December 20th, 2006 NIGEL JAQUISS | News Stories
 

The Nigerian Connection

The tale of an African government insider, a PGE exec and a shopping bag full of cash.

     
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Portland is rarely at the center of international intrigue.

Sure, meth cooks sometimes ship their product here from Mexico. And recently, news reports suggested links between the Kremlin and a Russian company that wants to buy Oregon Steel.

But as a general matter, being 104 miles up the Columbia from the Pacific and sandwiched between port cities like Seattle and San Francisco means Portland is usually an afterthought for players on the international stage.

Which is one reason a case of alleged money laundering and smuggling that concluded here recently is a puzzler.

The other reason is that the central figure in the probe is a Harvard-educated Nigerian immigrant who holds a senior position at Portland General Electric.

Loretta Mabinton, 46, is an assistant general counsel for Oregon's largest utility. Mabinton has worked on issues ranging from PGE's dealings with the Bonneville Power Administration to its attempted acquisition by the Texas Pacific Group.

But Mabinton's story is not a tale of kilowatts and arcane regulatory proceedings. Rather, it features a presidential jet, the United Nations, an exotic car, a shopping bag full of smuggled cash, and ties to the highest levels of an African regime that many consider one of the world's most corrupt.

Three years ago, federal agents began putting together a case against Mabinton and an associate that they said involved "bulk cash smuggling, violations of currency and monetary instrument reporting requirements, currency transaction report requirements, and money laundering."

If proven in court, the offenses could have constituted felonies—and Mabinton has admitted she had done some of what investigators claimed.

Nonetheless, the feds' case fizzled out in mid-October with a modest financial settlement of $26,000. No criminal charges were ever filed.

"This was a very unusual case for us," says Leslie Westphal, an assistant U.S. attorney for Oregon. "We don't get many money-smuggling cases in Portland, and this is the only one to my knowledge that involves Nigerians."

While Mabinton's case has not previously been reported in the American press, Nigerian publications have plastered it across their front pages.

Veteran Nigerian political observers speculate that Mabinton's activities are part of a far larger web of corruption and wonder whether Nigeria's strategic importance to the U.S. undercut the federal investigation into her activities.

"I suspect that the Nigerian president must have pulled political strings or threatened reprisals to shut the investigation down," says Okey Ndibe, a columnist for The Guardian, a leading Nigerian newspaper.

Court records and the affidavit of Guy Gino, a Portland-based special agent of the U.S. Immigration and Customs Enforcement Bureau, lay out a story that reads like a screenplay.

Gino, 33, has been a federal agent for 10 years. He declined to comment for this article, as did a spokesperson for ICE, which was formed in 2003 from the merger of the law-enforcement functions of the Immigration and Naturalization Service and Customs. But a 21-page affidavit Gino wrote in December 2005, two years after the Mabinton investigation began, provides abundant background.

In his affidavit, Gino says he first learned of Mabinton's case from federal agents in Seattle, who wondered why a Portland-area woman would be shipping goods to Nigeria through Seattle but filling out the paperwork in San Francisco.

Before long, Gino was on a trail that would point right to the top of the Nigerian government.

The story begins with a flight from Africa to the East Coast of the United States. On Sept. 20, 2003, Nigerian leader Olusegun Obasanjo flew to New York on his presidential jet for a meeting at the United Nations.

Obasanjo may not be a household name in Oregon, but as the president of Africa's leading oil producer—Nigeria produces about 2.5 million barrels per day—and most populous country, he's an important U.S. ally.

From a strategic perspective, Nigeria provides a crucial alternative to Middle Eastern oil and sends a million barrels of crude a day to this country, about 10 percent of U.S. imports.

Among those accompanying Obasanjo on his New York trip was Emmanuel "Andy" Uba, a "senior special assistant" to the president.

People familiar with Nigerian politics say Uba is the president's right-hand man.

"The guy has been Obasanjo's Karl Rove," says Bolaji Aluko, professor at Howard University and leader of the Nigerian Democratic Movement, a watchdog group. "He has both political and family connections to the president."

"People who wanted to see the president had to go through Uba. He was the gatekeeper," adds Ndibe, the Guardian columnist. "Uba has been the closest, most trusted aide to the president."

Uba, whose U.S. attorney did not return WW's call, recently resigned as a presidential adviser. He is currently running, with Obasanjo's backing, for governor of Anambra, one of Nigeria's 36 states.

Uba, it turns out, is also a very close friend of Mabinton's. In fact, she would tell a U.S. Secret Service agent that Uba was "her fiancÉ."

Two days after Obsanjo and Uba arrived on the United Nations trip, according to Gino's affidavit, Mabinton flew from Portland to New York. She met Uba at the United Nations Plaza Hotel in midtown Manhattan.

Mabinton, who did not respond to calls and emails seeking comment, has an intriguing background. The niece of a former administrator of a large Nigerian state, according to Ndibe, she attended the University of Ife in Nigeria and earned a law degree from Harvard Law School in 1986.

For a dozen years, Mabinton worked for Union Oil of California as group counsel. She later served as associate general counsel for Homebase Inc. in Irvine, Calif.

Mabinton, who is a naturalized U.S. citizen, moved to Oregon and joined PGE in 2001. A single mother of one adolescent son, she serves on the board of the Dougy Center, a Portland nonprofit that provides counseling to the families of children who have died.

Mabinton lives on a Lake Oswego cul-de-sac in a five-bedroom home she bought in 2001 for $320,000.

Although there aren't many 5-foot-10-inch black women with Nigerian accents living in the city some have called "Lake No Negro," Mabinton keeps a low profile. The only deviation from her corporate-lawyer persona is the vanity plate on her 1996 Toyota Land Cruiser, which reads "MamaEJ."

People on the Dougy Center board speak highly of her.

"She's a good listener and, from what I've seen, a loving mom," says Tim O'Brien, a real-estate executive who serves with Mabinton.

"She seems like a very nice lady and makes good suggestions at our board meetings," says Coni Rathbone, a lawyer and fellow board member.

It's not clear what took place at the meeting between Uba and Mabinton at the U.N. Plaza Hotel. But when she left the hotel, she later told investigators, she was carrying $170,000 in U.S. currency that Uba had given her.

That's a fair sum in this country, but in Nigerian terms, it's a lot of money: According to the World Bank's 2006 Fact Book, about 70 percent of Nigerians lived on less than $1 per day in 2003, the most recent survey year.

On Sept. 23, 2003, after arriving back in Portland, Mabinton set $10,000 of the cash aside and put $160,000 in a purple plastic shopping bag, according to Gino's affidavit.

She then took the shopping bag to the Electra Central Credit Union at 3717 SE 17th Ave., in Milwaukie, where she had an existing account. (Electra is now part of Advantis Credit Union.)

Federal law requires that depository institutions such as banks and credit unions report all cash transactions of $10,000 or more to the IRS within 15 days of the transaction. (It is unclear whether the credit union did so.)

Even if Mabinton had wanted to avoid such attention, it would have been difficult, because not only was the purple bag of cash she carried unusual, so was the money itself.

Each of the 1,600 $100 bills was stamped with the words "AL GULAM." (Those two words appear to have been stamped on the bills by a Nigerian money changer. In his affidavit, Gino explained that "money exchange businesses in foreign countries will place a stamp on United States Currency in order to 'guarantee' that the bills are not counterfeit.")

After making her deposit, Mabinton did not allow the money much time to earn interest.

Two weeks earlier, on Sept. 10, she had gone to Rasmussen Mercedes-Benz on Southwest Naito Parkway, where she put down a $5,000 deposit on a brand-new, fully loaded black Mercedes SL500. The two-door convertible then retailed for about $97,000.

Mabinton told a salesperson "the car was a 'birthday present' for her boyfriend and that she was going to ship it to Nigeria."

The day after she deposited the $160,000, Mabinton returned to the credit union to obtain a cashier's check for the balance of what was owed on the Mercedes.

There was a hitch, however. The credit-union clerk who assisted her needed a vice president's approval to prepare the check and none was available.

Agitated, according to Gino's affidavit, Mabinton left the premises but immediately demanded her money in a written message to the credit union's vice president.

"I risk losing a car that is hard to find," she wrote. "This car has to be in Nigeria no later than December 1, 2003. The transportation time is between 45 and 60 days. It is imperative that I get this car in the hands of the shipping agent this weekend."

After Mabinton raised a ruckus, a bank employee delivered a check to Rasmussen that same day. When she made arrangements to ship the car to Nigeria, however, she caught the attention of the U.S. Secret Service.

In addition to its well-publicized role of protecting the president, the Secret Service is responsible for investigating various financial crimes.

The shipment of the Mercedes caught agents' attention for a couple of reasons.

First, while living in Lake Oswego, Mabinton made arrangements in San Francisco to ship the car from Seattle.

When agents checked shipping details, they learned she'd paid with funds from Electra.

Upon contacting the credit union, agents learned that Mabinton had recently made deposits totaling about $200,000 (that sum included other deposits in addition to the cash she brought back from New York) and "the bank officials also indicated that several of the deposits appeared to have been structured"—another red flag.

The term "structured deposit" refers to the practice of splitting up deposits into sums of less than $10,000 to skirt reporting requirements.

When agents examined Mabinton's bank records, they found at least four occasions on which she apparently broke down larger sums into multiple deposits.

For instance, on Sept. 25, she deposited $10,500 into an ATM near her office. But instead of depositing the money all in one envelope, she put $600 into her Oregon account and split the balance into deposits of $5,000 and $4,900 into an account she maintained in California.

She had made a series of similarly structured deposits totaling $19,600 on Sept. 2, and $9,700 on Oct. 26, agents discovered.

She also appeared to be depositing far more money than could be easily explained.

"Throughout 2002, Mabinton has handled her finances in a consistent manner essentially living check to check with a little money going into some stock investments," wrote Gino.

In 2003, however, "Mabinton's statements show numerous high-dollar transactions including funds wired into and out of her [California] account from multiple and suspicious sources," Gino added. "The financial analysis of these bank accounts showed that throughout 2003, Mabinton was living well above her means."

Uba, the man who gave Mabinton the cash, also piqued the feds' curiosity. In his affidavit, Gino says that the U.S. Secret Service office in Atlanta listed Uba as having been a "previous subject of a Nigerian advance fee fraud scheme investigation."

(Advance-fee fraud is the name given to email scams, which promise enormous payoffs if the recipient puts up a small sum. Many such schemes originate in Nigeria and are called "419 fraud" after a section of the Nigerian criminal code.)

On Nov. 6, 2003, federal agents in Portland convinced Magistrate Judge Dennis Hubel that Mabinton had bought the Mercedes for Uba with "the proceeds of bulk cash smuggling, violations of currency and monetary instrument reporting requirements, currency transaction reporting requirements and money laundering."

The judge ordered the Mercedes—which by that time was in Singapore—seized and shipped back to the U.S.

Under the court order, the feds also seized $131,666.44 from a separate bank account Mabinton maintained in California—apparently cash she had received from other "suspicious" transactions. (Most of that money was later returned to Mabinton.)

When federal investigators examined Mabinton's credit card statements, the story got even more interesting.

They determined that she had spent $45,487.28 of the money from Uba to purchase farm equipment that was shipped to Obasanjo Farms Nigeria Ltd.

That expenditure provided a direct tie to Uba's then-boss.

"The farm is owned by Nigerian President Obasanjo," states Gino's affidavit.

News about Mabinton and Uba's relationship with Obasanjo and the expenditure of some of the mysterious cash directly for the president's benefit proved explosive in Nigeria, generating such headlines as "Obasanjo's Aide in Money Laundering Mess," "Corruption Scandal in Aso Rock [the presidential seat]" and "Andy Uba: The Face of a Fraud."

When they put all the pieces together, the agents investigating Mabinton believed she was helping launder funds for a top official of the Nigerian government.

While such conduct might be unusual for utility lawyers, it wouldn't have shocked those who follow Nigerian politics. According to Transparency International, a German nonprofit that compiles an annual assessment of more than 150 countries, Nigeria's government is among the most corrupt in the world.

"In Nigeria, the Economic and Financial Crimes Commission estimates that over the years $350 billion in oil money has simply disappeared," says Daniel Smith, a professor at Brown Univerity and author of the recently published book A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria. "One former president allegedly took $10 to $12 billion himself."

"Nigeria has some of the most educated people in the world, but the crooks are running the country," adds Ndibe, the Guardian columnist.

Instead of following the money trail back to Nigeria, the federal investigation apparently stalled.

After the feds seized Uba's Mercedes in late 2003, the case veered into a procedural quagmire.

On Nov. 5, 2003, Mabinton admitted to Portland-based U.S. Secret Service agent Mark Kehoe that she'd taken the cash from New York to Portland.

But she denied she'd done anything wrong.

"Ms. Mabinton believed that as a Special Assistant traveling with the Nigerian delegation to the United States to attend the United Nations, Mr. Uba was not required to declare the currency or monetary instruments of more than $10,000," her Portland attorney, Douglas Stringer, wrote in a Jan. 28, 2004, filing.

Special agent Gino disputed this claim: "Uba has no diplomatic status that would have allowed him to circumvent [the law] which requires the reporting of the transportation of currency and bearer negotiable instruments into or out of the United States," he wrote.

Mabinton also argued that Uba had no choice but to physically carry the cash into the U.S.

"It is important to keep in mind that it is difficult to send funds via wire transfer from banks in Nigeria (which operates largely on a cash economy) to banks in the United States," Mabinton told investigators.

Gino also rejected that claim.

"If Uba's financial institution could not wire the money directly to the United States, a corresponding bank of his financial institution in another country did have the capability to wire the funds to the United States," he wrote.

The questions of where the money originated or whether it was the product of illicit activity were never answered, to the frustration of government critics.

Ndibe says he suspects the Portland case is the tiny tip of an enormous iceberg. "One hundred and seventy thousand dollars is lunch money for these people," he says. "If you really dig in, you'd find out they are probably moving millions."

In the end, Westphal, the assistant U.S. attorney who pursued forfeiture of the Mercedes, agreed to settle the case if Mabinton and Uba would pay the federal government $26,000. In return, Uba got to keep the Mercedes.

In the settlement, Mabinton and Uba denied that they engaged in any unlawful conduct and all parties stipulated that the settlement was not an acknowledgement of any illegal conduct.

Westphal dismisses speculation that Mabinton and Uba got off lightly because of political pressure.

Despite the unusual fashion in which Uba brought money to this country, the questions raised by Mabinton's structured deposits and Nigeria's endemic corruption, Westphal says she lacked the most basic element of a criminal case.

"To prove money laundering, you first have to show the proceeds are the result of illegal activity," she says. "We had no such proof."

Westphal acknowledges not everybody liked the result. "There was some disagreement within the government on how to go forward," she says. "But there was no political influence that I'm aware of. Ultimately, we just didn't have a terrific case."

Today, Uba is busy preparing for his governor's race in next year's Nigerian elections. Some observers think his career could go even further.

"There's a good chance he could be the next vice president of Nigeria," says Aluko, the Howard University professor.

As for Mabinton, she remains at PGE, where management was aware of her activities outside work. "She is a dedicated and valued employee," says PGE spokeswoman Gail Baker.

Torn from the Headlines

New Jersey-based journalist Omoyele Sowore of Saharareporters.com has been the most aggressive in pursuing the Mabinton/Uba story, but many others have also prusued it.

"Presidential Scandal: Andy Uba Resigns?" The Times of Nigeria, Nov. 7, 2006

www.thetimesofnigeria.com/index.php?option=com_content&task=view&id=1365&Itemid=81&PHPSESSID=e1f16924491a5c766bfef4e017

"Andy Uba: The Face of a Fraud" Sahara Reporters, Nov. 12, 2006

http://www.ocnus.net/artman/publish/article_27069.shtml

"A Dollar Smuggling Shame" The News, Nov. 13, 2006

www.thenewsng.com/modules/news/article.php?storyid=1831

"Obasanjo's Aide in Money Laundering Mess" The Daily Sun, Nov. 6, 2006

www.sunnewsonline.com/webpages/news/national/2006/nov/06/national-06-11-2006-01.htm

"Andy Uba's Money Laundering Scandal" Sahara Reporters, Nov. 10, 2006

http://www.nas-int.org/news/2006/AndyUbaMoney.html


Nigeria, located in west Africa, is twice the size of California and holds about four times as many people—132 million.

Mabinton's salary at Portland General Electric, which employs 18 lawyers, is not a matter of public record. Industry sources estimate her position pays about $125,000.

In addition to Mabinton's Mercedes, agents found in the shipping container a case of wine (type unspecified), four cases of Ensure (a nutrional supplement) and two extra wheel rims for the car.

Mabinton has never been the subject of a bar complaint in California or Oregon.

 
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