US embassy cable - 02ABUJA1817

NIGERIA AND NASCO - THE TRUSTEESHIP OPTION

Identifier: 02ABUJA1817
Wikileaks: View 02ABUJA1817 at Wikileaks.org
Origin: Embassy Abuja
Created: 2002-06-19 16:00:00
Classification: SECRET//NOFORN
Tags: PTER PREL ETTC PINS NI
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

S E C R E T SECTION 01 OF 02 ABUJA 001817 
 
SIPDIS 
 
 
NOFORN 
 
 
E.O. 12958: DECL: 1.6X1, 1.6X6 
TAGS: PTER, PREL, ETTC, PINS, NI 
SUBJECT: NIGERIA AND NASCO - THE TRUSTEESHIP OPTION 
 
 
REF: A. SUMMARY OF AHMED IDRIS NASREDDIN COMPANIES 
     B. 01 STATE 207526 
     C. STATE 10592 
     D. ABUJA 0187 
     E. EPSTEIN/ANDREWS EMAIL 6FEB02 
     F. ABUJA 0418 
     G. DATTA/ANDREWS EMAIL 24MAY02 
 
 
CLASSIFIED BY CDA ANDREWS.  REASONS 1.6X1, 1.6X6. 
 
 
1.  (C) Summary:  If placing NASCO under trusteeship is a USG 
priority, we suggest the Secretary raise it when he calls on 
Obasanjo 21 June.  Approaches at other levels are unlikely to 
bear fruit.  However, action against NASCO could result in 
collateral damage to bilateral relations far exceeding the 
value of the target.  End Summary. 
 
 
2.  (S) Background: Ref C identified companies belonging to 
the NASCO Group as possible sources of financing for 
international terrorism and sought Mission views on adding 
them to the E.O.13224 assets freeze list.  The Mission 
provided detailed information on the role NASCO plays in the 
economy of Nigeria's eastern Middle Belt and advised that a 
thorough and well-documented analysis of the NASCO companies' 
role in financing international terrorism would be needed to 
convince the Government of Nigerian (GON) to freeze NASCO 
assets, an action that would put the companies out of 
business, with attendant consequences for employees and 
suppliers.  Pursuant to Ref E, the Mission discussed at 
length possible palliative measures but could identify 
nothing significant and so reported ref F.  The Department 
subsequently provided Ref A, along with a request (ref G) 
that the Mission informally explore whether the GON would be 
amenable to placing the NASCO companies under a trustee. 
Theoretically, this option would permit the companies to 
remain in operation, generating benefits for Nigerians, while 
preventing profits from falling into the wrong hands. 
 
 
3.  (S/NF) Actions Taken: 
 
 
(A) Regional Affairs Counselor about two weeks ago gave Ref A 
to National Security Advisor LTG Aliyu Mohammed (ret), along 
with a summary of what the USG was seeking.  Mohammed did not 
respond to the request directly, but commented that he 
thought Nasreddin had not visited Nigeria in recent years. 
RAO/C did not have the impression that Mohammed would quickly 
take action along the lines of our request. 
 
 
(B) CDA 18 June broached the issue informally with MFA 
Permanent Secretary T.D. Hart, asking Hart's "advice" on how 
best to approach the GON.  CDA did not mention that RAO/C had 
spoken with Mohammed.  Hart is very sympathetic to us on 
anti-terrorism issues.  He said such a matter should normally 
be put before the NSA.  However, because of intertwined 
religious and political issues, the NSA would be hard-put to 
act.  Hart thought aloud a bit and concluded that the best 
approach would be for a special emissary or USG delegation to 
present our case directly to President Obasanjo.  He could 
not come up with any other avenue that would yield the 
results we seek in reasonable time. 
 
 
4.  (S) Comment: Hart's conclusion on what Mohammed would 
likely do matched RAO/C's initial assessment.  Now that 
Nigeria is entering an electoral cycle, every action that 
might be contemplated is subjected to an assessment of how it 
would play domestically -- not so much with respect to the 
general public but more terms of how well-informed political 
elites would react.  While there is substantial support for 
choking off funding for bin Ladin, Ref A does not establish a 
very clear link between NASCO, on the one hand, and bin 
Ladin, al Qaeda or the GSPC, on the other.  Rather it asserts 
that there exists evidence linking Nasreddin, through Bank Al 
Taqwa (of which he is a director), to the financing of 
international terrorism.  We are asking the Nigerians to 
accept (1) that this link exists and (2) that NASCO and its 
Nigerian subsidiaries are  a source of funds. 
 
 
5. (S)  Although Nigerian Heads of State traditionally have 
exercised significant informal executive authority, we're 
uncertain what legal basis exists for either seizure or 
imposition of trusteeship.  Obasanjo, already facing charges 
that he abuses power, likely will not want to take on another 
project that will give his opponents further basis for 
arguing that he 
(1) does not respect due process and democratic norms; 
(2) lacks concern for the welfare of northern Nigeria; and 
(3) jumps too high in response to U.S. demands. 
 
 
6.  (S) Comment continued: Complicating this picture is the 
fact that most of the formal and informal security elements 
fall under the authority of Muslims.  Aliyu Mohammed is the 
NSA; Lateef Kayode Are is the Director of State Security (and 
acts as NSA when Mohammed leaves the country); and the 
President's Chief of Staff is MG Abdullahi Mohammed (ret). 
None of these individuals would be anxious to be known for 
carrying our water on this issue. 
 
 
7.  (S) NASCO, Nigeria and the US: The Mission still has no 
idea how much, if anything, the NASCO companies operating in 
Nigeria contribute to the positive cashflow of entities 
outside of Nigeria under Nasreddin control.  From the look of 
NASCO's flagship facilities in Jos, there does not seem to 
have been much invested there recently.  Also, NASCO is no 
longer the beehive of activity it was several years ago.  It 
probably suffers from some many of the ailments that afflict 
the manufacturing and food-processing sectors in Nigeria. 
But, to the best of our knowledge, it remains by far the 
largest private-sector employer in Plateau State. Moreover, 
many small farms and businesses depend on it for sustenance. 
As we detailed in refs D&F, action that shuts NASCO down will 
inflict collateral damage on the bilateral relationship.  If 
NASCO's role in financing international terrorism turns out 
to be minimal, the costs of that collateral damage could far 
exceed the value of the target eliminated. 
 
 
8. (S) While the trusteeship option might keep NASCO open, we 
know neither what the books would show nor whether the 
trustee would exercise its fiduciary responsibilities 
faithfully.  In other words, NASCO could already be in bad 
shape, or the wrong choice of trustee could put it there.  If 
NASCO goes under as the (apparent) result of being placed 
under trusteeship, Nigerians will blame the GON and the USG. 
For Obasanjo, who faces a tough re-election fight and is not 
anxious to create new adversaries, the costs of complying 
with our request will be immediately evident.  He wants to 
keep Plateau State in his corner.  Obasanjo has complained 
recently that the USG makes too many demands while giving too 
little heed to Nigeria's concerns.  So, we will need to 
deliver our request for a NASCO trusteeship from a level high 
enough that Obasanjo will be forced to listen and to offer 
evidence so strong that he will feel compelled to commit to 
comply. 
 
 
9. (S) Recommendation:  If placing NASCO under trusteeship is 
a USG priority, the Secretary's June 21 call on Obasanjo is 
the best opportunity to raise this issue.  Approaches at 
other levels are unlikely to bear fruit.  Hearing directly 
from Secretary Powell the explanation that, understanding the 
potential economic and political repercussions, we are not 
asking to close NASCO but for Nigeria to keep future profits 
from failing into the wrong hands should help. 
ANDREWS 

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