In my initial post on this subject, I merely highlighted the complex nature of the story of the arrest of Obi Cubana by the EFCC. I was working against the background of intuitive or cognitive challenges an average person in Nigeria might have when he hears that Obi Cubana was arrested and detained by the EFCC.
- Cubana arrested by EFCC for money laundering and tax evasion
- Lai Mohammed denies asking Obi Cubana to lend money to Nigeria.
Many see Obi Cubana just as a hardworking Igbo businessman who succeeded. And to that extent, they see him as a model Also, they will interpret anything the government does with him with some ethnic colorations.
This perception of Obi Cubana was helped, ironically, by his recent event in his hometown, Oba. That is the event marking the burial of his mother.
The event in question was such a massive show and display of a theatrical dimension comparable to the Roman circuses organized by Julius Caesar. It was a display of who is who in the Nigerian entertainment and celerity community.
It even featured controversial personalities such as Police Commissioner Abba Kyari strategically featured standing next to Obi Cubana and showering praises on him.
The event involved an incredible display of cash in a countless and uncontrollable manner. And that was the problem for the government, which will be discussed here.
For an average person, (indeed, for any person that is not very sophisticated), what happened at Obi Cubana’s event was just fun and great entertainment. But for an educated mind, what happened was so troubling, it will threaten any government of the world and every government would move in to reign stop it.
(In fact, Obi Cubana should have been investigated within 24 hours after the event). The purpose of this post is to draw the attention of the reader to some aspect of the Obi Cubana event that he might never have noticed. Let me develop my argument with simple easy-to-understand illustrations.
First, the control of the supply of money, the use of money, the circulation of money are key functions of every government in this world. Often, many think that it is just about respect to money itself or to avoid money being stained with dirt and drinks and food in the party that is in issue. Some people think that the government just doesn’t want people stepping on the notes with their dirty shoes. No, my friend. It is much more than that.
The government is interested in controlling the sources of money and the value allocational implications of money in motion.
Second, the government has a duty to make sure that the laws are obeyed. We refer to this as the law-and-order function of the government. This function becomes a beat more nuanced when it comes to the duty of the government to identify loopholes in the laws and plugging such loopholes in a timely manner.
Third, of all crimes, one of the types that threatens government the most is organized crimes or crimes committed by powerful and well-connected people. Money laundering is the favorite and essential crime among powerful crime groups or crime personalities. And now the EFCC arrested Obi Cubana on the suspicion of money laundering.
Before we define the meaning of money laundering, remember again the three points above – First, government must control the supply and use of money. Second, government must identify and plug loopholes in the criminal laws. Third, government must watch out for organized crimes by powerful criminal groups and must certainly target money laundering, specifically.
"The hiding of the source of unlawfully obtained money, generally through transfers through foreign banks or legitimate enterprises," according to the definition of money laundering.
A source from the Corporate Finance Institute defined it in a more encompassing manner to reveal the requisite motives, thus:
"Money laundering is a method used by criminals to conceal the illicit source of their revenue. Money is "cleaned" of its illicit origin and made to seem as legitimate business earnings by moving it via intricate transfers and transactions, or through a series of firms.
Don’t get me wrong. I am not here to suggest that Obi Cubana is a criminal or that he has committed any crimes. In fact, I do not have any information that would lead me to conclude affirmatively that there was any crime.
However, the law says that the police must have a reasonable suspicion that a person has committed a crime before the police can arrest that person. For the purpose of this point, the EFCC is treated as the same as the police.
I acknowledge that inn Nigeria, the police have flouted this basic requirement of the law and arrested people even without a reasonable suspicion. The EFCC arrested Obi Cubana. Obi Cubana has not yet formally challenged his arrest.
So, we can presume that there was a reasonable suspicion that he committed the crime of money laundering. We can also safely assume that the EFCC sees the Obi Cubana event at Oba as part of the money laundering offenses Cubana is suspected of.
How could the Obi Cubana event in Oba be linked to money laundering? This question is very easy to answer. First, let us look at the what happened at that event in order to understand the argument.
The event showed a scenario where countless amounts of money were paid to a person by unknown or countless number of people. The amount of money that exchanged hand could not be objectively verified. It is up to Obi Cubana to say how much was involved.
If he says it was 50 million, nobody can challenge it with evidence. If he says that it was 50 billion, nobody can challenge it with evidence. (It could be a source of endless argument and dispute). So, Obi Cubana event created an opportunity for a man to claim that he received 50 million or 50 billion, and there will be no way to confirm the truth either way. That in itself is a problem for any government that has the duty to control the supply of money. (Are you getting my point?)
Also, nobody knew who exactly those people that gave money to Cubana or how much each person gave. Now, this is the problem. Let us assume (just for the sake of argument) that Obi Cubana were a drug dealer or that he has a secrete money minting machine somewhere.
Let us assume (also for the sake of argument) that Obi Cubana has minted or received 50 billion naira from such illegal operation and has that money in boxes of cash hidden somewhere. His problem would be how to move that money into circulation and into the banking system without anyone knowing that he got the money from illegal operations (That is: how to launder the money). This is actually what money laundering law is there to prevent.
(Worldwide, there are many ways to move this sort of illegal cash into the system. That is: there are many ways to launder such illegally obtained cash. Let me mention two ways. One, you have a night-club. Every night, you mix some of the illegal cash with the money into the money you received from the sale of drinks at the night club.
You take the whole money and walk into to the bank with a bag of cash the next day and deposit the cash and record it as sales from the club. Another way is through having a church. Every Monday morning, the pastor takes bags of cash to the bank as church offerings. So, a criminal can actually launder money through the churches. But one problem is that the church will have to find a way to move the money back to the criminal. This makes the church option less attractive. But where the criminal happens to own the clubs, he will easily move the money as he pleases).
Okay, but what if the clubs cannot move all the money fast enough? You cannot tell the bank that you collected 1 billion last night from a night club. They will suspect you because the figure is too much. So, what if you device another way to do it.
You just distribute 10 million among 40 of your best friends and arrange a party where they will each “spray” you with 10 million. (And to make sure that none of those friends will cheat you, you make sure they see you and Abba Kyari as friends: that sends a message to them that if they don’t do as agreed, you will have Abba Kyari to arrest them and frame them up for kidnapping).
OBI CUBANA
And you take the 2 billion to the bank and enter it as gifts received from well-wishers and friends at your party event. Smart, isn’t it! Can you see that? And you can always find a justification to organize more and more such party events. This year, it is your mother’s burial. Next year, it would be your birthday party or your wedding anniversary. More parties and more of the same money movements.
And because the money was never countable, you can keep taking any figure you like to the bank. It is still part of the gifts you received. You can argue that it was so much that you could not bring all of them in at once, for fear of robbers. So, you take them to the bank in batches of 10 billion every week. Once the bank is allowed to receive money from you under the tag “money received as gifts from friends and well-wishers” there is no limit to what they can receive.
Okay, let us say that Obi Cubana is purely a legitimate businessman, that he just was loved by many friends and they came out and gave him gifts on their own free will, let us assume that. But can you see that powerful criminals will see in what happened an opportunity to use it to launder money? So, there is the loophole.
Obi Cubana’s party event has established a loophole in the system that criminals (not Obi Cubana) will like to exploit. Can you see that? Therefore, any serious government should have more than enough reasons to go after Obi Cubana and investigate his business operations contently.
I have severally criticized EFCC for political entanglement, internal corruption and incompetence. But on this Obi Cubana’s arrest and investigation, I give them A+. They are doing the right thing and I wish they would continue. Obi Cubana’s activities met all the essential requirement for him to be viewed with suspicion.
All the factors came together to make him a suspect. The government must send a message across to all that if you engage in certain activities or create certain loopholes that could cause government to lose the ability to control the supply of currency, the government will come after you.
I hope this analysis will help you understand what is at stake in the Obi Cubana and efcc investigation. Do not always allow sentiments and emotions to overwhelm your judgment. Have an open mind that can probe ideas and issues. Everything is not about our tribal differences. Everything is not about our religious differences. Understand the trends and ideas first, before you delve into the tribal and religious possibilities.
NOTE: If you like the analysis in this post, invite your friends to join the forum this forum.
(By Emeka Ugwuonye, Esquire)
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