Boko Haram is Funded by CBN Officials, Australian Negotiator Alleges

With the dust raised by his interview in which he named a former Governor and a retired army chief as associates of the Boko Haram terrorist organization yet to settle, Dr. Stephen Davies, an Australian negotiator has fired another salvo. He alleged that the terrorist group that has killed thousands of Nigerians is being funded through the Central Bank of Nigeria.
He made the allegation in a telephone interview.

Below is the full text of the interview as published:

A large chunk of the finances of Boko Haram may be passing through the Central Bank of Nigeria (CBN), an Australian with close links to the militant group has told TheCable. Dr Stephen Davis, who was in Nigeria for four months trying to negotiate with Boko Haram to release the kidnapped Chibok schoolgirls, said Boko Haram commanders told him a senior CBN official, who cannot be named by TheCable for legal reasons, was fully involved in the funding of the insurgency. Davis, who spoke with TheCable on phone from Australia in his first interview with a Nigerian journalist, said Western countries could not trace the majority of the source of funding to Boko Haram because “it is done through a legal channel, through the gatekeeper, the CBN, and that makes it very easy to cover up”. He said Boko Haram commanders told him a senior CBN official, who currently works in the bank’s currency operations division, was the one handling the transactions. “One of the biggest of suppliers of arms and military uniforms to the JAS (Jama’atu Ahlis Sunna Lidda’awati wal-Jihad, better known as Boko Haram) currently lives in Cairo, Egypt. He is the recipient of money sent by political sponsors from Nigeria. The funds go through the CBN’s financial system and appear to be a legal transaction. “Meanwhile, the CBN official who handles the funding is an uncle to three of those arrested in connection with the Nyanya bombings. The three boys lived with him. They were arrested by the SSS (Department of State Security) after the bombings but they do not seem to have been interrogated about their uncle in CBN. Or if they have given up information about their uncle then the SSS has not moved against him.”

“Also, a senior official of CBN, who recently left the bank, was very close to Sodiq Aminu Ogwuche, the mastermind of the Nyanya bombings who also schooled in Sudan. Boko haram commanders said Ogwuche’s wife used to visit this top official in his office at the headquarters of the bank in Abuja before the Nyanya bombings. They were very close,” Davis said. The former Canon Emeritus at Coventry Cathedral, UK, said he decided to come out to speak now because the Nigerian authorities were not acting fast and he was heart-broken by the evils being done to the kidnapped Chibok girls and the many other girls and boys being kidnapped. “I have three daughters. I just cannot stand the thought of what those girls are passing through. I have spoken to an escapee who described how she was being raped for 40 days by militants. I can’t stand it. It is heart-breaking. Nigerian authorities must act decisively now,” he said, revealing that he spent “days and weeks” with commanders of Boko Haram in the north-east during his time in Nigeria. Davis, 63, holds a PhD in political geography from the University of Melbourne, Australia. Below are excerpts from the exclusive interview

Can you share with us your experience with Boko Haram leaders?

Let me take you back a bit. I specialise in negotiation. It may interest you to know that I have been involved in peace negotiations in Nigeria since 2004 when President Olusegun Obasanjo invited me to intervene in the Niger Delta crisis. With a local Nigerian colleague, I spoke with Asari Dokubo and took him to Obasanjo at the Presidential Villa in Abuja. Because Asari is a Muslim, the Muslim boys in the north heard about me and warmed up to me. I did a report in 2005 on the threat of extremism among young northern Muslims. Obasanjo’s security chiefs dismissed the report with a wave of the hand. They said no such thing existed. In 2007, President Umaru Musa Yar’Adua, who desired to end the militancy in the Niger Delta, invited me and made me presidential envoy. I toured all the northern states. I went to the country’s borders. I came back with a report that there were some budding sects in the north. The national security adviser (NSA) at the time, Gen. Sarki Mukhtar, dismissed the report. He said they didn’t exist. A succession of NSAs dismissed all these reports and allowed the groups to flourish. By the time President Goodluck Jonathan came to power in 2011, these groups had spread all over the north. They had cells and commanders in 16 out of the 19 northern states. President Jonathan called me and sought my opinion on the best way to tackle the militancy and bring it to an end. I knew many of the leaders. I spoke with them. They trusted me. They initially wanted to kill me. They thought I was an American but I told them I was not. They also thought I was British but I said I was not. I told them I was an Australian. They relaxed. I don’t know why but they became more accommodating. They became friendly and, gradually, we built the trust. They started feeling free with me. I don’t call them Boko Haram. I call them JAS. People call them Boko Haram. They don’t call themselves Boko Haram.

What deal were you seeking under Jonathan’s mandate?

The president wanted peace. He asked me to discuss with them so that we could arrive at the terms of peace. They came up with some terms that were acceptable and others that were not acceptable.

What were those terms?

They wanted training for the widows of their deceased fighters. They asked the government to give these women cottage training. They, ironically, wanted education for the children of their deceased members. That is why I don’t call them Boko Haram (“Western education is a taboo”). They asked that the children be sent to school. They also wanted the government to rebuild villages that were destroyed by the security agencies. They asked for amnesty as well.

What terms were unacceptable?

The president said he would not grant amnesty in the sense that they meant it. He said those who surrendered their arms would not be prosecuted, but those who continued to commit more crimes would face the law and would be charged with treason. They also wanted women and children who were being held in custody to be released. Their leaders that I spoke with were ready to accept the conditions. But the NSA then, Gen. Owoye Azazi, went vehemently against it. He said there should be no negotiation with terrorists. He completely turned the military against the peace deal I was working on, even though we were very close to bringing an end to the insurgency the same way we did it in the Niger Delta. The military then refused to back the deal. They succeeded in convincing the president not to accept it. I could understand where they were coming from: the security budget was like $6 billion and any peace deal would seriously reduce their budget.

How did you become involved in the negotiation for the release of the Chibok schoolgirls?
Because I had built trust among the militants, I made calls to them when I heard about the abductions. They confirmed to me that the girls were with them. I came to Nigeria in late April (the girls were abducted on April 14). I told the president I would try to intervene and help get the girls out. He said he would give me the needed support if I wanted. However, what I discovered was that thrice we tried to get the girls released, and thrice my efforts were sabotaged. That was when I now realised that some politicians were also involved in the insurgency. There were the remnants of those involved in the former peace deal as well as a political arm and what I call the ritual arm which specialises in butchering human beings. While I was making efforts to get the girls released, the political backers of the group threatened that if I got 30 or 40 girls out, the militants would kidnap another 60 to replace them. I became very frustrated. They threatened that any commander of the group who agreed to participate in any dialogue would be slaughtered by other commanders. The political sponsors are very powerful because they supply the finances and the arms. Until they are cut off from the group, those girls will not be released. We are talking about 200 Chibok schoolgirls, but there are over 300 other girls that have been kidnapped. There are many young men that they also kidnapped and turned them against their families. They asked them to go and slaughter their family members and they are doing it. Nobody is talking about those ones. They are the new child soldiers. TheCable: How can we get these girls released? Davis: The first thing is to stop the bagman who supplies weapons and military uniforms. We know his name, location and associates. If the man is stopped, the slaughterers, the ritual arm of the group, would be demobilised. The girls can be released afterwards. This man controls these ritualists.

Was there really any deal to release the girls?

Yes, there was. Some commanders of the group told me that they would first release 100 of the girls and that would be the first step towards dialogue. They needed a guarantee from President Jonathan that they would not be arrested or prosecuted if they showed up for dialogue. They agreed with me that if they did that and no one was arrested, then they would return to the camps to release the rest of the girls.

In all your discussions, did they name their sponsors?

They named the man who lives in Cairo. He is of the Kanuri tribe. He passes arms, ammunition and uniforms to them. The CBN official who handles the funding is an uncle to three of those arrested in connection with the Nyanya bombings. The three boys lived with him. They were arrested by the SSS (Department of State Security) after the bombings but they are yet to be interrogated about their uncle. The official still works with the CBN. He is still there. He works in currency operations. He knows how to handle the transaction in a way that it can never be traced. Western countries are frustrated that they cannot trace the funding. How can they when it is passed on legally, through the gatekeeper, through the CBN? Also, a senior official of CBN, who recently left the bank, was very close to Sodiq Aminu Ogwuche, the mastermind of the Nyanya bombings who also schooled in Sudan. Ogwuche’s wife used to visit this official in his office at the headquarters in Abuja before the bombings. They were very close. Don’t forget that the CBN official who handles the transactions also used to report to his superior, the official who recently left the bank. Also, there is a politician who was supplying operational vehicles for the suicide bombers. He gave them Hilux vans. He is a prominent politician. If the president goes after these guys, they will say it is political. That is part of the problem. Everybody will say the president is going after his political opponents, especially as there is a general election next year. The militants also named the former governor of Borno State, Ali Modu Sheriff. In 2003 and 2007, Sheriff was very close to them. He used them for his elections. They worked for him. However, in 2007, the leader of the group, Muhammed Yusuf, collected money from Sheriff in return for support. Yusuf’s mentor, Ja’afar Mahmud Adam, exposed and criticised him for collecting money from Sheriff, and Yusuf ordered his killing in April 2007. But eventually, Yusuf and Sheriff fell out. However, it is acknowledged that Sheriff was and is a major financier of the group. He pays for young men to go for lesser hajj. From there they are recruited into the group. They interact freely with the Al-Shabbab militants from Somalia. They are trained by Al-Shabbab. Some of them go to Mali for training. These guys are in touch with the ISIS (the Islamic State of Iraq and the Levant, which now simply calls itself Islamic State and controls parts of Iraq). They are deadly. They share the same philosophy. The militant commanders I spoke with also named a former army chief as one of their sponsors. You have senior military officers who are benefiting from the insurgency because of the security budget. It pays them to keep the insurgency going so that they can continue to make money. I asked them several times who the army chief was and they told me.

Source: The Cable

The Biggest Tax Scam Ever

Some of America's top corporations are parking profits overseas and ducking hundreds of billions in taxes. And how's Congress responding? It's rewarding them for ripping us off

By Tim Dickinson | August 27, 2014

In July, the American pharmaceutical giant AbbVie, maker of the world's top-selling drug – the arthritis treatment Humira – reached a blockbuster deal to acquire European rival Shire, best known for the attention-deficit medication Adderall. The merger was cheered by Wall Street, not for what the deal will do to advance pharmaceutical science, but because it will empower the bigger firm, AbbVie, to renounce its U.S. citizenship.

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At $55 billion, the AbbVie deal is the largest in a cavalcade of corporate "inversions." A loophole in American tax law permits companies with just 20 percent foreign ownership to reincorporate abroad, which means that if a big U.S. firm acquires a smaller company located in a tax haven, it can then "invert" – that is, become a subsidiary of its foreign-based affiliate – and kiss a huge share of its IRS obligations goodbye.

AbbVie shareholders will continue to control 75 percent of the company, which will still be managed by executives outside Chicago. But the merged company will now file its tax returns on the island of Jersey – a speck of land in the English Channel, where Shire is incorporated. AbbVie, which racked up more than $10 billion in Humira sales last year, will slash its effective corporate tax rate from 22 percent to 13. The cost to the U.S. Treasury? Possibly as much as $1.3 billion by the year 2020.

Companies striking deals to become technically foreign can be found in all corners of American business, from California computer-equipment manufacturer Applied Materials to Minnesota medical-device giant Medtronic to North Carolina­based banana behemoth Chiquita. Little is changing in the core business of these firms. They will just pay less in taxes – and to a foreign government, often Ireland or the Netherlands.

These tax turncoats have drawn the ire of President Obama. "I don't care if it's legal," he declared this summer. "It's wrong." These inverted companies, he said, "don't want to give up . . . all the advantages of operating in the United States. They just don't want to pay for it."

With Congress gridlocked, Obama is vowing to tackle the problem on his own – as he has done to advance his agenda on LGBT equality and immigration reform. In August, he threatened "quick" executive action to "at least discourage" inversion schemes. But pressed for specifics, the president conceded the White House has no silver bullet. In fact, Treasury Secretary Jacob Lew had declared only weeks earlier, "We do not believe we have the authority to address this inversion question through administrative action. If we did, we would be doing more."

Over the next decade, corporate inversions could cost the U.S. Treasury nearly $20 billion – revenues that could other­wise pay for Head Start programs, to rebuild roads and bridges, or just bring down the deficit. The wave of inversions is threatening "to hollow out the U.S. corporate income tax base," Lew warned in a July letter to the chief tax writers in the House and Senate. But inversions are just the tip of the iceberg. The crisis of corporate tax avoidance is far more pervasive – and destructive – than either Obama or Lew is letting on. At a moment when Congress appears impossibly divided, a strong, bipartisan consensus has, in fact, emerged in Washington: The world's richest corporations will get away with fleecing hundreds of billions of tax dollars from the rest of us.

In public, Democratic politicians blast corporate tax dodgers. But the party's most viable comprehensive "reform" proposals would reward the crooked accounting of U.S.-based multinationals. Republican­backed legislation – no surprise – would only make the crisis worse. Why? "It's not rocket science; it's money and politics," says Jared Bernstein, former top economic adviser to Vice President Joe Biden. "Concentrated wealth is buying the policy agenda it likes, and blocking one it doesn't."

Last year the IRS finally collected more in tax receipts than it did before the crash in 2007. But dig a little deeper into the numbers and it is clear we haven't returned to normal: Corporations paid nearly $100 billion less in federal income taxes last year than before the Great Recession – down nearly 40 percent as a share of GDP. In fact, corporate profits and corporate tax collections are now trending in opposite directions. Profits were up $93 billion last year – to a high of $2.1 trillion, according to the Commerce Department. Yet corporate tax payments actually fell last year by more than $15 billion.

How is this possible?

It goes way beyond inversion. The top names in American business – from Apple to Xerox – have joined in the greatest tax dodge in world history. Using clever accounting games, these corporations have siphoned majestic sums out of the country and into tax-haven shell companies – where the money is untouchable by the IRS.

The numbers are staggering. More than $2 trillion in U.S.-based multinational profits currently sit in offshore accounts, representing, by credible estimates, in excess of $500 billion in unpaid taxes. If that money were deposited in federal coffers tomorrow, it would wipe out the deficit for 2014. And every year that Congress dithers on a crackdown, America is forfeiting an approximate $90 billion in revenue.

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The details of corporate tax avoidance can be dizzyingly complex. But the broad strokes are simple. For more than a century, American corporations have been required to pay taxes on their global income. There's no double taxation problem; companies receive credit for taxes paid over to other governments. The logic of our system is straightforward: U.S. corporate citizens enjoy benefits that aren't cabined inside our borders. The U.S. Navy secures shipping lanes needed to transport goods from Chinese factories to ports around the world. The American legal system protects corporate patents and other intellectual property worldwide. U.S. taxpayers fund the R&D that makes many of these corporations profitable in the first place.

There is one odd hitch in our system of global taxation. The corporate tax bill – nominally 35 percent – is not due in America until the foreign profits come home. In the jargon of the corporate world, the taxes are "deferred" until the profits are "repatriated." Until then, the offshore cash can be invested and grow U.S.-tax-free, not unlike your 401(k).

"The deferral tax break really highlights how broken our tax code is," says Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee. "When you park a big chunk of cash overseas, you get a huge tax break for it."

In reality, much of the untaxed income is actually earned in the United States before elaborate accounting schemes siphon it overseas. The racket is simplest for tech and pharmaceutical companies, whose value is tied to intellectual property. According to David Cay Johnston, author of Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else, Pfizer provides a prime example. When the company was developing Viagra, it transferred the economic rights to its intellectual property abroad, ultimately to a shell company in Liechtenstein – an infamous European tax haven. On each sale of the drug here, the European subsidiary charged the U.S. parent company a steep royalty – payment of which moved the profit from high-tax America to low- to zero-tax Liechtenstein.

Adding insult to injury, this self-dealing creates a phantom business expense in the United States. "They get a tax deduction in America while they pile up the money in another country, tax-free," says Johnston.

Contrary to what the term "offshore" might suggest, these untaxed profits are not stranded. "There's this false notion that these funds are locked in a strongbox somewhere," says Edward Kleinbard, a former chief of staff for Congress' Joint Committee on Taxation. In reality, these untaxed foreign profits are often banked, by the offshore subsidiaries themselves, in Manhattan – where they're used to invest in stocks and U.S. Treasury bonds. "The money," says Kleinbard, "is already back in the U.S. economy."

Worse, equally convoluted accounting sleights of hand can be used to make the untaxed income – or at least its financial power – available to fund daily corporate operations in the U.S., or just enrich shareholders. The ratings agency Standard & Poor's recently coined a term to describe this practice: "synthetic cash repatriation."

Take Apple, which wanted to reward investors last year with a $60 billion stock buyback that would boost the company's share price. Apple did not have enough cash in its American accounts to complete the deal. And the company couldn't legally tap its "offshore" billions (reportedly banked in Manhattan) without paying U.S. taxes.

To sidestep the law, Apple borrowed the cash, using the largest corporate bond offering in history to raise $17 billion in the States. Thanks to the massive piles of offshored cash and securities on its books – presently more than $137 billion – Apple's net cost of borrowing was minuscule, about 1.57 percent. Apple liked this trick so much it repeated it – raising another $12 billion in April this year. Shareholders got their reward. Only Uncle Sam was cut out of the deal.

The crisis in multinational corporate tax avoidance is growing exponentially. According to an analysis by Audit Analytics, the indefinitely reinvested foreign earnings of the firms in the Russell 1000 Index surged from $1.1 trillion in 2008 to more than $2.1 trillion in 2013. That latter figure is greater than the GDP of Russia.

The analysis reveals that the biggest names in corporate America are boycotting the U.S. tax system, en masse. Top offenders include giants from high-tech (Microsoft, $76 billion); Big Pharma (Pfizer, $69 billion); Big Oil (Exxon­Mobil, $47 billion); investment banks (Goldman Sachs, $22 billion); Big Tobacco (Philip Morris, $20 billion); discount retailers (Wal-Mart, $19 billion); fast-food chains (McDonald's, $16 billion) – even heavy machinery (Caterpillar, $17 billion). General Electric has $110 billion stashed offshore, and enjoys an effective tax rate of four percent – 31 points lower than its statutory obligation to the IRS.

"The things these companies are doing, 20 years ago would almost certainly have been illegal," says Bob McIntyre, president of Citizens for Tax Justice. "But now you've got so many big, powerful corporations doing it that it's the norm." Systematic avoidance helps explain why corporate income taxes – one-third of federal revenue in the 1950s – have now dropped below 10 percent of Treasury receipts today.

Many in corporate America justify this rampant tax dodging by arguing that the 35 percent corporate tax rate in the U.S. is too high. In reality, our system offers big corporations so many other tax favors that the effective tax multinationals pay on their U.S. profits is often lower than what the same companies pay in other developed nations. "The constant corporate whining that they're overtaxed in the United States," McIntyre says, "is bullshit."

America confronted – and largely dealt with – the issue of international tax loopholes once before. A half-century ago, the Kennedy administration understood that American corporations were using accounting gimmicks to shift untaxed profits overseas. "Deferral has served as a shelter for tax escape through the unjustifiable use of tax havens," President Kennedy said in 1961. Congress eventually agreed on new laws that drew a sharp line between "active" income – earned from selling real-world goods and services – and "passive" income, the easily manipulated paper profits generated from financial transactions. The former would still qualify for the deferral tax break; the latter would be taxed immediately.

The Kennedy-era reforms kept corporate tax avoidance substantially in check through both Democratic and Republican administrations. Even Reagan cracked down on multinational tax dodgers with the tax reform of 1986. But changes in recent years – including one in 1997 and another in 2006 – have, according to a recent Senate investigation, "nearly completely undercut" the ability of the Treasury to tax the paperwork profits of multinationals. The original sin was committed by the Clinton Treasury – then led by Robert Rubin, later a top executive at Citigroup and a major player in the subprime mortgage crisis. In 1997, Treasury changed regulations to permit corporations to decide for themselves which subsidiaries were relevant for tax purposes, simply by ticking off a box on a tax form. But these changes, intended to simplify the tax code, also opened a colossal loophole.

By telling the IRS to treat certain offshore subsidiaries as "disregarded entities" – a.k.a. "tax nothings" – corporate accountants could divert and mask passive income, making it untaxable abroad. "I don't think they realized how much check-the-box would lubricate international tax avoidance," says Kleinbard.

Corporate accountants were gleeful. Tax watchdogs were horrified. "The stupid Clinton Treasury," McIntyre says bitterly. "They were warned about this before they put out the regulations. Then they discovered that all the people who were telling them they were idiots were right."

For a brief moment, Treasury sought to reverse course. But lobbyists from firms including Monsanto, Morgan Stanley, IBM and Philip Morris locked arms to defend their de facto tax cut. The Clinton Treasury backed down. Soon, some administration officials took a spin through the revolving door – raising troubling questions about the relationship between corporate America and its regulators. William Morris, who became the Clinton Treasury's associate international tax counsel around the time the regulations were enacted, jumped to GE, where today he orchestrates the firm's global tax policy.

The great corporate tax dodge exploded under the presidency of George W. Bush. By 2004, American multinationals had siphoned hundreds of billions of dollars offshore. Far from cracking down, the Republican Congress rewarded corporate tax dodgers with a "repatriation tax holiday." Multinationals were invited to bring home their overseas earnings – to be taxed at a measly 5.25 percent.

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This tax giveaway was part of Bush's American Jobs Creation Act and sold to the public as a way to provide a shot in the arm to the U.S. economy. More than $300 billion came home – nearly 80 percent of it from locations the U.S. government considers tax havens. But the tax holiday didn't spur investment, growth or jobs. In fact, the top 15 participants, after bringing home a collective $150 billion, proceeded to slash 20,000 jobs. The act did little more than make rich investors even richer. A huge proportion of each repatriated dollar – between 60 and 92 cents – wound up in the hands of shareholders.

The Bush tax holiday also "dangled in front of every CFO in America the expectation that there would be another tax holiday, and another after that," says Kleinbard. Eager to reassure corporate America that pipelining profits offshore was now kosher, Congress enacted little­debated legislation in 2006 that codified tax exclusions enabled by the decade-old check-the-box rules. The accounting boondoggle was now doubly entrenched – in law and regulation. The impact was stark: In 2006, corporations held roughly $600 billion offshore. That sum would soon double, then triple.

In his first campaign for president, Barack Obama called for "ending tax breaks for companies that ship jobs overseas" – shorthand for repealing tax deferrals on offshored corporate profits. But upon taking office in 2009, Obama lowered his sights, proposing more modest reforms, including elimination of check-the-box and a limit on tax deductions linked to offshore profits. Despite preserving deferral, these reforms were still projected to raise $210 billion over a decade. And Obama continued to talk tough. In May of that year, he denounced our "broken tax system, written by well­connected lobbyists," and promised to "restore fairness and balance to our tax code."

But even these proposals ran into a corporate buzz saw. Around 200 multi­nationals, including top backers of Democrats, had joined forces in a campaign spearheaded by the Business Roundtable and the U.S. Chamber of Commerce. Ken Kies, a top lobbyist for companies including GE and Microsoft, told reporters, "This is going to be the biggest fight for the corporate community in the next two years."

The corporate blitz worked. The new president, who'd won more votes than Ronald Reagan, backed down. "We were doing the Recovery Act, health care reform and financial reform," says Bernstein, Biden's former economic adviser. "Adding a massive fight with multinational corporations just wouldn't have been smart." Far from ending the abuses of corporate tax avoidance, the Obama administration has since become complicit. The president has twice signed legislation reauthorizing the Bush law that effectively codifies check-the-box. The provision is among a package of "tax extenders" – including loopholes favored by both parties – that Congress habitually tacks on to other, must-pass legislation. These corporate giveaways were last rubber-stamped in the 2013 bill that pulled America back from the "fiscal cliff."

Without meaningful resistance from Congress, corporations are pressing forward with abusive tax schemes. Two recent Senate investigations offer a window into the dark arts of corporate America's tax avoidance.

Apple's tax strategies in particular have come under the microscope. On a recent earnings call, the Silicon Valley giant announced it has parked $137.7 billion offshore. In its own SEC filings, Apple has revealed it would have to pay nearly 33 percent in U.S. tax – some $45 billion – to repatriate those offshored earnings. That would be more than enough to fund NASA for the next two years.

According to Senate investigators, Apple makes use of "ghost companies," incorporated in Ireland as "a conduit for shifting billions of dollars in income from the U.S." From 2009 to 2012, Apple booked $30 billion in income to a subsidiary called Apple Operations International, an entity with no official employees. But thanks to overlapping loopholes in Irish and American tax law, AOI has not been forced to declare itself a tax resident of either country. As a result, for the past five years, it filed no returns, and its profits weren't taxed by any government. "Apple sought the Holy Grail of tax avoidance," said Sen. Carl Levin, D-Mich., chairman of the Permanent Subcommittee on Investigations. Apple, for its part, insists that its accounting practices are legitimate. "We pay all the taxes we owe," said CEO Tim Cook, testifying before Congress in May 2013.

While tech firms and Big Pharma have long made use of accounting tricks to offshore profits, big industrial concerns have not, historically, been able to play games to the same degree. That's no longer true. Starting about 15 years ago, heavy-equipment manufacturer Caterpillar paid accounting firm PricewaterhouseCoopers $55 million to create a scheme to "migrate profits" from the U.S. to Switzerland.

With no change to its core business, Caterpillar began booking earnings from its U.S.-managed parts business in Geneva – after first negotiating a deal with Swiss authorities to tax those earnings at four to six percent. From 2000 to 2012, Caterpillar shifted more than $8 billion in taxable income to Europe, deferring $2.4 billion in U.S. taxes. "In the fantasy­land that is international tax law," Levin said, "tax lawyers waved a magic wand to make millions of dollars in U.S. taxes disappear."

The real problem with multinational corporate tax avoidance is not that the firms are breaking the law. It's that the law itself is broken. "Most of what they're doing is completely legal," says a top Senate tax staffer. "The problem is with the system that allows them to do it."

Democratic Senate Finance Chairman Ron Wyden has long sought to overhaul the corporate tax system. Wyden talks like a progressive champion, likening the current tax code to "a rotten carcass that the special interests feast on." He has introduced legislation that would eliminate deferral for all international corporate profits, which would be a huge victory for taxpayers. According to a Joint Committee on Taxation estimate, forcing companies to pay taxes on their profits as they're earned would raise around $600 billion over 10 years.

If only Wyden had stopped there. In an attempt to draw support from tax-phobic GOP lawmakers, Wyden would actually give away all that revenue – plus $200 billion more over the first decade, according to the Tax Policy Center – by slashing the U.S. corporate tax rate to just 24 percent. Wyden insists that this low rate would both keep high-skill, high-wage jobs at home and deter companies from "manipulating the tax code to set up shop overseas."

"The morons in Congress are either unbelievably disingenuous," H. David Rosenbloom, who directs the international tax program at NYU's law school, says, "or too stupid to understand this." There's no way the U.S. can set its tax rates low enough to compete with tax-haven nations like Ireland, he says, and still run a global superpower.

Wyden has also called for a repeat of the 2004 tax holiday – allowing offshored cash to come at the discounted rate of just 5.25 percent. On $2.1 trillion in offshored earnings, that could give these companies close to a half-trillion-dollar tax break. Wyden calls the corporate giveaway "a sensible transition."

The best that can be said of Wyden's approach is that by ending deferral and making schemes to offshore U.S. profits moot, it would stop the bleeding. In contrast, the top Republican proposal, developed by House Ways and Means Chairman Dave Camp, would rip open new arteries. Like Wyden, Camp would also slash the overall corporate tax rate – to 25 percent. In lieu of a tax holiday, he would impose a "transition tax" on offshore profits, from 8.75 percent to as low as 3.5 percent. Camp's legislation "solves" the problem of deferred offshore profits by largely surrendering the United States' right to tax corporate earnings booked abroad – making our international tax system "even more of a mess than it is now," writes McIntyre.

This is the reality of our political system in 2014: In what should be a titanic battle between multinational corporate power and federal power, our elected representatives are hardly putting up a fight. Obama has been a sharp critic of corporate tax avoidance. Yet the offshore corporate earnings stash has nearly doubled on his watch. Senate Majority Leader Harry Reid has unleashed blistering attacks on corporations like Walgreens that have threatened to renounce their U.S. citizenship for tax purposes. And he has said he's "ready to roll" on a vote for a (sure-to-fail) Democratic bill that seeks a two-year moratorium on inversions. Yet Reid has also been shopping a stand-alone tax-holiday proposal, rewarding multinational tax avoiders with a 9.5 percent rate. Reid's partner in this effort? Kentucky Republican Rand Paul – who's been courting right-wing billionaire David Koch. "Rand's got good ideas," Koch told The Wichita Eagle in July.

The American people want change: Two-thirds of Americans believe large corporations should be paying higher taxes, and 80 percent believe corporate loopholes should be closed. But Washington isn't listening. The kid-glove treatment of corporate tax offenders by both parties is exhibit A in America's shift from a functioning democracy to a nascent oligarchy. It aligns with a recent study conducted by Princeton and Northwestern that concluded "organized groups representing business interests have substantial independent impacts" on federal decision making, while the interests of average Americans "appear to have only a minuscule, statistically nonsignificant impact."

"Corporate tax breaks are beloved by those who take advantage of them," says Bernstein. "You're not going to change that without realigning a lot of politics." Until that day comes, we'll be living with the tax policy that multinational corporations have bought and paid for. Which means that you and I are stuck with the bills.

From The Archives Issue 1217: September 11, 2014

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In Bayelsa, oil rises to meet the sun (1)

PUNCH
BY SIMON UTEBOR

An unusually harsh sun raises more questions on the environmental challenges in oil-rich Bayelsa State, writesSIMON UTEBOR

In Bayelsa State, known by its sobriquet, ‘Glory of all Lands’, the typical sunlight on a sunny day is better imagined than felt.

Whenever the sun shines, the state, said to be in proximity to the equator, pours something close to fury on residents.

The ferocity of sunlight is such that some observers have argued that crude oil is so close to the surface of the earth that it colludes with the sun to give a burning effect.

While the coming of rainy season appears to have sobered the heat, the rising incidence of oil spills and bursting of pipelines by vandals have also been fingered as some of the vices responsible for the emission of harsh sunlight.

Scores of residents complain that after their encounter with the blazing hot sun, they are usually down with sun stroke – an illness caused by too much direct sun, which has fever, weakness and headache as its cousins.

A first time visitor to Bayelsa, Jane Raphael, could not hide her feelings when she told our correspondent that the sun radiation was something out-of-this-world.

The light-skinned Raphael, who was baptised with the fury of the scorching sun, stuttered while narrating her nasty experience.

She said, “I cannot imagine that sun could be this harsh. This is the first time I have visited this state. I just arrived from Ogun State.

“As the sun shone, I could not withstand its touch. I had to go and buy an umbrella to shelter myself from the heat of the sun. I had wrongly thought I could brave it; but along the line, I had to beat a retreat. That was when I had to look for an umbrella in order to reduce the intensity of the sun.

“As I was going under my mine, I also noticed other residents using umbrellas, while others were taking shelter in some places waiting for the sun rays to stop before they could continue their movements within Yenagoa metropolis.”

Added burden for albinos

A resident Miss Preye Hitler, also said she had yet to know the cause of the scorching sun in the state.

She said she noticed in the past that after exposing herself to the harsh sun, she would take ill.

Hitler said after taking ill, she usually suffered shingles and heat rashes.

“I usually prayed in the morning that the sun should not be too hot in the afternoon. When I was younger, I was told that early morning sun gives some vitamins. But with the nasty experience I have had in the past, I dread the sun now.

“Last time, I was complaining to a friend about the scorching sun in some parts of the state. Though a layman, he was able to tell me that our peculiar situation in Bayelsa was as a result of too much crude oil in the state. I wondered the nexus between the crude and the sun and I became more confused. I have decided to find out from the experts if too much oil could collide with the sun and the relationship between the two.”

Yet, another resident, who gave his name only as Dandyson, claimed that Bayelsa’s slight peculiarity was because it is close to the equator.

Dandyson, an official of an oil major in the state, described equator as an imaginary line where the earth or any other planets turns.

He posited that most communities in Bayelsa were close to the equator; hence the residents experience hot sun at times.

Dr. Yomi Ebiwari of the General Hospital, Amassomma, Bayelsa State, said the effects of harsh sun on people were many.

She mentioned sunburn, dehydration, eye defects and cancer as some such.

Ebiwari said, “Harsh sun produces ultra violet radiation which causes pcerypium (eye problems). Also, excessive sun light causes sunburn, dehydration and castinormal, especially the light-skinned people and the Albinos.”

Spillage factor

A petroleum engineer, Mr. Felix Igbudu, said there was a relationship between the crude oil in the soil and the blazing of the sun.

Igbudu told our correspondent that the volumes of oil and spillage activities were too high.

He said, “The relationship is that the higher the sun, the higher the evaporation of crude oil which contributes to greenhouse gases that make the carbon circle to be higher. This development now further causes climatic change.

“Also, if there is emission of carbon into the environment, it causes carcinogenic issues. When the sun is high, its intensity makes crude oil to evaporate faster. And when it evaporates faster, it makes the air, which is composed of many other gases, to form carbon circle.

“The required carbon circle is about 60 per cent. When it is beyond the required carbon circle, it makes the ozone layer to be depleted. When this occurs, it will have direct penetration from outer space and causes what we see today as the increase in weather harshness. Where it is supposed to be cold, it becomes hot while there could be cancer, rashes and many other side effects.”

He, however, offered some recipes to ameliorate the trend.

Igbudu, who said the rate of oil spills was rampant, urged the government to embark on orientation of youths.

He added, “The rate of oil spill in Bayelsa communities is high. Therefore, the government should give massive orientation to youths. They should be told that their actions could cause negative effects on the environment.

“The government should find work for them to do or create an enabling environment to engage them. This will discourage them from bursting pipelines resulting in acidic soil not conducive for plants, fishes and animals’ growth.

“Pipeline bursting also contributes to the poverty of the people. Petroleum activities can occur in a place for more than 50 years. This is a big problem because it causes a lot of sicknesses in areas where such is prevalent. The oil companies should also do something to ameliorate the problems.”

Impact of fossil fuels

Also, an environmental activist, Mr. Morris Alagoa, said there was high prevalence of fossil fuels.

Alagoa, Coordinator of the Environmental Right Action and Friend of the Earth in Bayelsa, said fossil fuel was one of the chemicals blocking the ozone layer and that it caused climate change.

He added that the burning of fossil fuels by humans constituted the largest source of emissions of carbon dioxide, which is one of the greenhouse gases creating radiative forces that contributes to the warming of the atmosphere.

He said, “The more they evaporate, the more they impact on climatic conditions. The sun is very harsh because the heat is too much. We are also not making use of the trees. People fall trees indiscriminately, not minding the adverse consequences.

“The trees are supposed to absorb carbon dioxide. When the atmosphere is heated, it can contribute to the heating up of the ecosystem.”

Alagoa said when the sun had direct impact on the crude, it operated within the lower level of the atmosphere and that gave rise to consequences of the scorching sun in the state.

“Everybody is suffering from it here. The heat is also as a result of climate change and something drastic must be done to improve on the level of shoreline protection in the state,” the environmentalist submitted.

Shoreline protection zero

Alagoa also posited that the level of shoreline protection in the state is zero.

He said, “Talking about shoreline protection, while I appreciate the enormity of the need in communities along the Atlantic coastline, other communities along our rivers suffer similar danger of being washed away.

“Communities along the Atlantic shoreline in this connection comprise Twon Brass, Sangana, Okpoama and Odioma in the Brass Local Government Area. In Southern Ijaw LGA, Koluama and others are facing a serious danger.”

He said those along the Bayelsa rivers, such as Abobiri community in Ogbia LGA, Anibeze in Sagbama LGA and Peremabiri in Southern Ijaw, should be protected.

The equator

Scientists at the ARM Climate Research Facility, USA, while dissecting the differences between the equator and the poles, submits that on earth, the equator receives more sunshine than the poles.

Their submissions give credence to Dandyson’s standpoint that most communities in Bayelsa experience scorching sunlight because of their closeness to the equator.

The scientists, in their postulations in www.education.arm.gov/studyhall say the more sunshine received in the equator was due to the simple geometry of the earth’s curvature.

Earth curvature, according to the scientists, is a given amount of sunshine in a beam, falling on the equator, which points directly at the sun.

This, they said, had more intense effect than the glancing rays spread over much larger areas of the curving surface near the poles.

They said, “In addition, extensive ice and snow at the poles reflects back to the space some of the sun’s energy that reaches the earth.

“Much more sunshine is absorbed to heat the earth and the equator. This means the land at the equator becomes hotter than the poles – two sides of the opposite ends of the line on which the earth or any other planet turns.”

Crude oil effects

Some oil experts believe that crude oil contains compounds which have toxic and cancer-causing properties to humans and plants.

According to experts, such as Ibuki Y, Toyooka T and others, oil spilled in environments are usually exposed to sunlight.

However, they opined that the toxicity of sunlight exposed by crude oil had been poorly understood.

In the excerpts of their study, published in PubMed.Gov (www.nibi.nlm.nih.gov, ), they noted, “We found that the water soluble fraction of crude oil irradiated with solar-simulated light generated phosphorylation of histone in human skin cells under ultra violet irradiation.

“Crude oil was exposed to SSL for approximately seven days. The WSF obtained from unexposed crude oil showed no toxicity, whereas the WSF obtained from crude oil pre-exposed to SSL induced acute cell death on exposure to UVA irradiation, which was more remarkable in human skin fibroblasts than human skin keratinocytes.”

Effects of scorching sun on the skin

Dermatologists (skin doctors) say that prolonged exposure to sunlight causes brown spots; red, scaly spots; drying and wrinkling; and, worst of all, skin cancer.

In health.howstuffworks.com/skin-care, skin doctors say if one’s skin doesn’t produce the protective melanin pigment well or if one is exposed to the sun before enough pigment can be manufactured and dispersed, the ultraviolet rays could kill skin cells.

They added, “Even a mild sunburn that produces only a little redness destroys the top layer of your skin, just as if you had seared it with a hot iron.

“Despite these increasingly well-known dangers of sun exposure, many of us, on occasion, get lazy when it comes to protecting our skin or just can’t resist the myth that getting some colour from the sun makes us look healthier.”

No end to gas flaring

Alagoa posited that gas flaring is still rampant in the state.

He said, “Only recently, some communities in Bayelsa have seen some gas gathering plants as part of the measures to check the rising trend of flaring.

“Sometimes in some flow stations (where gas is flared by oil companies), their gas tunnels were not used optimally.

“For instance, in Imiringi, Ogbia Local Government Area of the state, there used to be two tunnels. However, at times the gas companies put it off for months. And when they manage to put it on, you see only one working instead of the two that are there.”

He alleged the Federal Government was not meeting its counterpart funding to tackle the menace.

Alagoa lamented that most communities were not aware of the intricacies of gas flaring.

He said, “Gas flaring affects rain water to the extent that when gas is being flared and rain falls, the particles of smoke affected the water. Research indicates that the flared gas also goes into the ground and in turn affects the plants, fishes, animals and the bodies of water.

“To this extent, experts believe that it is one of the factors responsible for low life expectancy in the state. Also, people are going blind because of gas flaring. As we speak, if you go to most communities, women are crying that they have lost most of their cash crops to the oil industry,” he explained.

Negligence

Paramount ruler of Ikarama in the state, Chief Daniel Francis, noted that oil companies operating in the area were doing nothing to check gas flaring in affected communities.

The monarch, who spoke in a telephone interview with our correspondent, alleged that the regulatory bodies were only monitoring but no better response was coming from their own end.

Alagoa also corroborated the monarch’s submission, saying the Federal Government and relevant agencies were not doing enough to check gas flaring in the state.

He called for the urgent passage of the Petroleum Industry Bill into law, saying that development would go a long way to redressing the flaring problems.

He noted that the prerogative accorded the minister of petroleum resources to give licences to oil companies to flare gas without inputs from the communities was a disservice to the people.

“PIB should be passed quickly to address the challenges of gas flaring and other petroleum related issues. The government is not doing enough. They have been shifting the goal-post,” he said.

Efforts to get the side of the regulatory agency, the National Oil Spill Detection and Response Agency, were unsuccessful.

When contacted, an official in the Public Relations Department, Mr. Cyprus Nkangwungu, asked our correspondent to call him later for the agency’s response.

But when the journalist called him later for his response, his phone rang out several times. As of the time of going to press by 9pm on Wednesday, Nkangwungu had yet to respond.

But a multinational oil company, Shell Petroleum Development Company, said recently at a sensitisation programme in Yenagoa, that frequent pipeline sabotage disrupted the firm’s gas processing system.

It said the development had negatively impacted on performance, contributing to about five per cent increase in flare intensity last year.

The company said, “Joint venture funding challenges have resulted in delays to some gas-gathering projects: two of these projects, which were expected to gather an additional 35 per cent of associated gas by 2014-15, are likely delayed.”

“SPDC will continue to work closely with its joint venture partners and other stakeholders to minimise delays to the key projects on which further flare reduction depends,” it said.

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Contact: editor@punchng.com

Mimiko and the future of Ondo politics

punch

BY BAYO OLUPOHUNDA

Bayo Olupohunda

Every time I ponder on the fate of Ondo State and its people, I am always left in a state of depression. It is hard not to be. My grief stems from the stunted economic, industrial, and infrastructural development in the Sunshine State in the 14 years of democracy. Every Ondo man and woman at home and in the Diaspora should be concerned about the plight of the state especially in the Fourth Republic. Any observer, familiar with the state’s socio-economic and political history will not but agonise at the arrested state of development since the demise of the First and Second Republics—the two periods in history that I consider as the glorious years in the life of the state. The tragedy of development and governance in Ondo, a state that was once a showcase of the progressive politics of the late Obafemi Awolowo, is indeed a tragic metaphor of the crisis of leadership in our country today.

Having taken a critical and dispassionate look at the political trajectory in the state, I have come to a painful conclusion that the present is bleak and the future is uncertain. Before I proceed, let me declare my interest as I try to situate the tragedy of Ondo in the context of the general malady of governance in our country. First, Ondo is the land of my birth. More importantly, as one of the 36 states of the federation, it is also strategic to the economic development of the country. Indeed, to understand the uniqueness of Ondo State, a brief historical journey will provide some insights into how its current status is an affront to those who fought for its creation and contributed to its development in the early years. The state was created in 1976 from the former Western Region. It originally included what is now Ekiti State, which was split off in 1996.

During the First Republic, Ondo State formed what was then known as Western Region. As a direct beneficiary of the famed Awolowo regionwide development footprints, it also contributed to the economic and industrial development of the region through its cocoa and palm kernel produce. Its cocoa especially became the mainstay of the region’s economy. The educational and economic developments of the region were partly driven by this single product. Awolowo, the Premier of the region, utilised the proceeds for the development of the state.

Enduring infrastructural and industrial developments became the hallmark of governance. At its creation, Ondo became one of the LOOBO states comprising Lagos, Oyo, Bendel and Ogun states. In the Second Republic, one of Awolowo’s protégées, Adekunle Ajasin, became the governor. Ajasin, a true disciple of Awo, continued the developmental projects of the Action Group which had changed to the Unity Party of Nigeria. The Universal Primary Education policy of the First Republic was replicated. New roads and industries were built. Today, all the industries have become moribund.

In Okitipupa, where I grew up, I attended a good public school, the hospitals had enough drugs and qualified doctors. The roads that linked the major cities—from the riverine Igbokoda to Okitipupa, Ondo, Akure, Ado Ekiti to Akoko and Owo were well-tarred. Akure, the state capital, emerged into a metropolitan city due to the sustained urban development by Ajasin. All the major cities and towns had functional public water works. Today, Ondo people make do with boreholes and stream water for their domestic needs. The quality of public schools cemented the status of old Ondo as an intellectual powerhouse. But those schools have become a shadow of themselves. The roads that were built in the First and Second Republics still endure but those of the Fourth Republic have started crumbling. For example, the Ore-Ondo road has not been dualised several years after it was built. Other examples abound. Apart from crude oil which has long increased its federal allocation, Ondo is also home to the untapped and neglected bitumen, a major component for road construction. During the dark years of military dictatorship, the state became the target of greedy military heads of state who milked its resources dry through their proxy administrators. The thriving industries of the First and Second Republics have all collapsed. The public schools, hospitals and public utilities are still in a bad state.

Now, the public school system which for long distinguished the state in educational endeavours, has suffered a terrible decline. The coming of the Fourth Republic which was welcomed with relief has since become a disappointment. The dream of re-enacting the Awolowo and Ajasin years has since been dashed. The Alliance for Democracy government headed by the late Ade Adefarati did not record any visible achievement. The government of the late Governor Segun Agagu was also lost in the maze of the Peoples Democratic Party’s deceptive politics. His government could be seen in the context of the widespread failure of the PDP to deliver democracy dividends to Nigerians after more than 14 years of democracy. The imperial presidency of Olusegun Obasanjo who had an overbearing influence on his “appointee” governors in the South-West ensured that the Agagu era was wasted.

The emergence of the incumbent Segun Mimiko who succeeded Agagu was considered to have had the potential to make a difference in the state. But after five years, the dream has also evaporated. Many had thought that his manner of emergence having been “persecuted” by Obasanjo would make him see the need to serve the people of the state who voted for him in his first and second term. Sadly, the governor has not made the needed difference. Like others before him, he has failed to see the big picture of harnessing the state’s vast potential for its economic and industrial rebirth. As the current governor, Mimiko bears the responsibility for the sorry state of infrastructure and moribund industries. The development has largely been cosmetic. Tokenism and patronage have taken the place of reviving industries and empowering of SMEs. Deliberate propaganda has become an effective tool of governance.

No doubt, Ondo has the resources, both human and material, for economic, infrastructure and industrial growth but successive governors have mismanaged its affairs. The sad part is that no government has even built on the legacies of Awo and Ajasin. Worst still, the legacies have been bastardised. A frightening dimension is how the state has recently become an orphan–battered, bruised and raped by politicians. The strong political ideology that once defined Ondo is long gone. Now, the state is in the hands of political buccaneers who are plundering its resources at will. The current governor’s deceptive politics where he cavorts with Abuja under the guise of mainstreaming the state for federal perks is a self-serving agenda detrimental to the development of the state. Ondo people are too politically sophisticated to fall for this politics of self-preservation. Ondo people need real leaders. They will never be pawns in any politician’s chess game.

Follow me on Twitter: @bayoolupohunda

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Contact: editor@punchng.com

Analysis: What did Nigeria's National Conference achieve?

Continue reading the main story

Nigeria - Troubled Giant

• Where’s the money?
• Viewpoints on 100 years
• Bad luck party?
• Booming illegal oil refineries

Some 500 Nigerian delegates have just finished five months of deliberations about the political system and future of a country which has seen bitter conflicts between its numerous ethnic, religious and linguistic groups. Analyst Abdullahi Tasiu Abubakar looks back at what the National Conference achieved.

As the Nigerian government begins moves to implement the conference's resolutions, many Nigerians are asking if the exercise was worthwhile.

Experts question the viability of some of the decisions and the feasibility of their implementation.

Continue reading the main story

“Start Quote

We came in, we came out and we conquered”

Chief Edwin ClarkConference delegate

The delegates, drawn from all parts of the country and representing diverse interests, debated issues ranging from the contentious revenue-sharing formula to the divisive political structure of the nation.

They passed more than 600 resolutions and produced a 10,335-page report, which has been submitted to President Goodluck Jonathan, who promised to implement them.

"We shall send the relevant aspects of your recommendations to the Council of State and the National Assembly for incorporation into the constitution," he told the delegates' leaders.

"On our part, we shall act on those aspects required of us in the executive."

'More united'

Their chairman, former Chief Justice Idris Kutigi, said fears that the conference would lead to the disintegration of the country had been dispelled.

"We have held a National Conference and we are more united today than ever," he said.

Main recommendations from the National Conference:

• Scrapping the current system of 774 local authorities - this is intended to save money and reduce corruption. States would be able to set up their own local systems
• Creation of 18 new states - equally spread around the country. Also suggested that states wishing to merge can do so if certain conditions met
• Revenue allocation - proposes reducing share of national income going to the federal government and increasing share for the states
• Modified presidential system of government that combines the presidential and parliamentary systems of government. The president should pick the vice-president from the legislature
• Power should be shared and rotated at all levels of government. Presidency should rotate between north and south and among the six geo-political zones of the country. Likewise, the governorship post should rotate among the three senatorial zones in each state

Viewpoints on 100 years of Nigeria

Head of the northern delegates Alhaji Ibrahim Coomassie said that whatever they did, they "did so for one Nigeria".

His southern counterpart Chief Edwin Clark said: "We came in, we came out and we conquered."

Mr Jonathan seems delighted by their words: "It is now very clear that as Nigerians, we have devised a way of addressing and resolving our differences amicably: We dialogue and dialogue until we agree."

But while the president and the delegates revel at what they see as the success of the conference, critics dismiss it as a diversionary tactic and waste of resources.

President Jonathan (c) and conference chairman Justice Idris Kutigi (r) are pleased with the results

They argue that conducting it just a few months ahead of general elections due next year and in the middle of a crippling Boko Haram insurgency was irrational.

Reports about the insurgency and the Ebola virus that hit the country in July often overshadowed the conference.

The outcome of the conference provides even more ammunition for the critics.

They say it neither meets the expectations of those who want a restructuring of the country, nor does it satisfy the yearnings of those who prefer reform of the existing system.

'Lofty intent'

There is also a question of legality raised by some of the delegates.

Many of them, including Auwwalu Yadudu, a professor of law, have openly rejected an attempt to turn the resolutions into a draft constitution.

Mr Yadudu said the conference "cannot discharge or exercise a mandate not conferred on it by law".

University of Lagos lecturer Wahab Shittu concurs, arguing that the absence of a legal framework has "made the lofty intent of the National Conference to be illusionary".

And even if legal backing is retrospectively provided for those issues that require it and others integrated into government policies, as seems to be the plan now, there are still issues of acceptability.

Some of the fundamental changes proposed by the conference, such as scrapping the country's 774 local authorities and creating an additional 18 states, were roundly rejected by many Nigerians.

The conference came as Boko Haram militants intensified their attacks

These changes - like several others such as altering the revenue-sharing arrangement and proposing a modified presidential system of government - require amendment of the constitution, which legal experts say is a long and tedious process.

It is impossible to do it under the current government which faces elections in the next few months, senior legal practitioner Tahir Shehu told the BBC.

"Constitutional amendment must be endorsed by the National Assembly and two-thirds of the states' houses of assembly," he said.

"You can't get that on any issue that has no clear national consensus. Scrapping local governments will not be one of them — nor will creation of additional states."

These are perhaps some of the issues envisaged by those who dubbed the conference a "jamboree" to underline what they regard as wastefulness.

Right from the onset, the reported 7bn naira ($43m; £26m) budgeted for it - it is still unclear how much was actually spent as the tenure was extended to enable delegates to complete their work - was criticised by many Nigerians, including President Jonathan's main rival in the last presidential election, former head of state General Muhammadu Buhari.

"I do not think that at this time when governments are finding it difficult to pay salaries of workers, it can afford about 7bn naira to waste on a conference," he said.

Mohammed Haruna, the veteran columnist and former managing director of the New Nigerian Newspapers, has reviewed various post-independence conferences and concluded that "virtually every constitutional conference in this country has come with a hidden agenda by its convener and virtually all of them have come to grief".

Many feel this one will be no different to its predecessors.

Nigeria: A nation divided

• Wealth
• Ethnic
• Health
• Literacy
• Oil

Despite its vast resources, Nigeria ranks among the most unequal countries in the world, according to the UN. The poverty in the north is in stark contrast to the more developed southern states. While in the oil-rich south-east, the residents of Delta and Akwa Ibom complain that all the wealth they generate flows up the pipeline to Abuja and Lagos.

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More on This Story

Nigeria - Troubled Giant

Features

• Where’s the money?

  Nigerians left asking the same old question after latest scandal

  ---

• Viewpoints on 100 years

• Bad luck party?

• Booming illegal oil refineries

• Guide to Nigeria's trouble spots

• Who are Boko Haram?

• Killed for his beard?

• Mapping the divides

• Jos: Neighbours are enemies

Everyday life

• African viewpoint: Nigerian spirit triumphs

• Emirs: Power behind the throne

• Wasted youth

• What is Naija?

• On patrol with the police

Background

• Profile: Goodluck Jonathan

• Key facts, figures and dates

• High hopes of independence

• Nigeria at 50: Special report