Malabu had sold the lucrative but controversial oil block, OPL 245, to Shell and Eni for fee of $1.1 billion.
The international oil companies also paid $210 million “signature bonus” to the federal government.
Both payments were made by Shell and Eni to a federal government account at JP Morgan Chase, leading to suspicion that they did not want to be directly involved with Malabu because of corporate governance issues, particularly with Etete’s involvement.
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Etete, who had awarded the block to his front company when he was minister of petroleum in 1998, had been convicted for money laundering in 2007 in France in a separate case.
Campaigners said the oil companies used the federal government as “condom” in the Malabu deal.
TheCable previously reported how leaked documents showed Shell and Eni blackmailed Nigeria with an arbitration to underpay for the block.
‘GROSS NEGLIGENCE’
JP Morgan Chase’s payments to Etete’s Swiss and Lebanese accounts were initially blocked by a court order as a result of a dispute between Emeka Obi, the lawyer who brokered the deal, and Etete.
Mohammed Adoke, who was the attorney-general of Nigeria at the time, had given the legal advice that the amount not restrained by the British court could be disbursed by JP Morgan Chase.
Yerima Ngama, who was the minister of state for finance, then authorised the transfer of the “unrestrained” sums from the federal government account at the bank.
The Nigerian government has now filed a case of “negligence” against JP Morgan Chase in a UK high court over the payments.
But in court papers filed last week by JP Morgan Chase and published by Finance Uncovered, the bank said it went ahead with the transfer after doing its due diligence.
‘REPEATED CONSENT’
The US bank claims it repeatedly sought consent from the UK top anti-money laundering agency, Serious Organised Crime Agency (SOCA), to make the payments.
It said it got the green light to go ahead with the transfer.
But campaigners argue that the bank should not have effected the transfers because Etete had a previous conviction for money laundering.
JP Morgan admits it knew it was paying to a company associated with Etete and also acknowledged knowing Etete was a convicted money launderer.
However, the bank says it “complied fully” with UK anti-money laundering laws by raising a series of Suspicious Activity Reports with SOCA for various requests to pay Etete’s company over two years.
JP Morgan Chase, in its court filing, said it was repeatedly given consent by SOCA.
But on one occasion, SOCA initially refused before reversing itself on a requested payment of $74 million in July 2013.
NIGERIAN BANKS
On two occasions, payments failed as banks in Switzerland and Lebanon declined as a result of the restraining order obtained by Obi, who said he was entitled to $215 million as his fee.
In August 2011, JP Morgan finally transferred at total of $801.4 million to Malabu accounts in two Nigerian banks.
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Barnaby Pace, an anti-corruption campaigner at Global Witness, which has spent years investigating the OPL245 deal, said the revelations in JP Morgan’s new court filing raise serious questions for the UK authorities.
He said: “If we want to stop corrupt deals happening in the future we need to address the systems that make them possible. There must be accountability for individuals and institutions that enable corruption in major financial centres like London.
“The failure of the UK’s anti-money laundering regime to prevent this billion dollar payment to a front company owned by a former minister and convicted money launderer is a real cause for concern.”
Finance Uncovered has also been at the forefront of investigations into the OPL 245 affair.
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