The Office of the Attorney-General of the Federation has said it followed due process in its plan to deduct $418 million from the bank account of the 36 states of the Federation.
The deduction is to pay consultants who claimed a percentage of Paris Club refunds as payment of services they said they rendered to the states and local government.
The AGF was responding to a Friday judgement of the Federal High Court which restrained the Federal Government from making the deductions until all issues relating to that matter were fully determined.
In a statement signed by spokesman of the OAGF, Umar Gwandu, on Friday, the AGF suggested the states and local governments had acted in bad faith for taking the case to court.
The deductions were ratified by several court judgements, the AGF said, and the Federal Government only had to step in to avoid forfeiting any of its assets, since it was also a defendant in the lawsuits against the states.
“It can be noticed that some reports contain wilful statements suggesting that some government officers were acting without due process in the settlement of certain judgment debts (totalling US$418million) arising from the deduction and refunds due to the States and Local Governments from the Paris Club loan refunds,” the statement said.
“It is important and necessary to state, at the onset, that the deductions were on account of four judgments in contention which were delivered at various times in 2014, 2015, 2017 & 2019. Two of these judgments were Consent Judgments based on Terms of Settlement entered into by NGF in 2017 & 2019. Again, two of the four judgments were based on an earlier judgment delivered by the Federal High Court in 2013.
“It is, however, amazing that from 2013 – 2021 neither NGF nor ALGON deemed it fit to either challenge or fully comply with any of these judgments. In furtherance of the consent and settlement the NGF itself made payments in billions to the consultants based on the same judgment it is deriding now.
“By various letters addressed to the Honourable Attorney General of the Federation and Honourable Minister of Finance, both NGF and ALGON expressed no objection and actually recommended the same set of consultants for payment. Indeed, the judgement debts were much higher than the above figure, but these officers ensured that the Consultants granted consistent concessional offer.
“The Office of the HAGF also subjected the claims of the consultants/contractors to investigations by both the DSS and EFCC in order to further ascertain the veracity of the claims. Recommendations for payment were thus made based on the positive outcomes of these investigations. Since both NGF and ALGON that have entered into judicial settlement on account of which consent judgment was entered have refused to comply with these judgments, it became pertinent for the Federal Government to take the initiative in order to prevent a situation where the debt liability of NGF and ALGON would be transferred to the Federal Government and eventually excluded against its assets and interest.
“The interest of the Federal Government to intervene in the negotiated settlement was borne out of the fact that the Consultants made Federal Government a party to the action against NGF and ALGON the implication of which was that the judgment may be executed against the interest and assets of the Federal Government over liability that was incurred exclusively by NGF and ALGON in respect of which the Federal Government is not responsible.
“It is curious to note that both NGF and ALGON who had actual knowledge of these judgments between 2013 and 2019, consented to their partial compliance and also undertook in 2019 to settle them from their FAAC Allocations, only turned around in 2021 to take steps to challenge the judgments. The Federal Government acted on the Undertaking/Indemnity provided by NGF. More so the Judgment Creditors also obtained orders of mandamus compelling the issuance of the promissory notes.
“It is remarkable to note that the NGF at various times in 2016 and 2018 received payments from the Federal Government under the guise of legal and consultancy fees related to the same Paris Club refunds. Specifically, NGF was paid US$86,546,526.65 and N19,439,225,871.11 in 2016 and US$100,000,000.00 in 2018. It was however, convenient at that time not to complain about payment of consultants.
“Thus, the Federal Government did not act in vacuum before the decision to comply with the existing judgments was taken. The Federal Government could not fold its arms and watch while the consultants/contractors had already obtained garnishee order absolute attaching the funds of the Federal Government in the Central Bank of Nigeria on account of the fact that the refunds of the Paris Club loans were made by the Federal Government to the States and Local Governments in contempt of an existing court judgments procured against NGF and ALGON by consent.
“Thus, the Federal Government did not resort to arbitrary deductions of funds belonging to States and Local Governments rather it is in furtherance of the need to settle judgment debts judiciously consented to by NGF and ALGON that were incurred but in respect of which they are seeking to transfer the liability of same to the Federal Government. Thus, the media onslaught on what played out at FAAC October meeting that States won’t be able to pay salaries on account of the deductions is far from the truth as the problem is self-induced being a product of contractual negotiation in respect of which NGF and ALGON submitted to judicial decision legitimately entered by their consent.
“The Honourable Attorney General of the Federation denies any wrongdoing in the steps that have been taken so far to comply with the various court judgments and is also not party or privy to any of the sinister agenda or plots being insinuated in the malicious publications, but maintains that he has a responsibility to protect Federal Government from bearing liability of a judgement debt incurred by Nigerian Governor’s Forum and ALGON which is mischievously being transferred to the Federal Government.”