Of all we are into the season where this city tends to india and so we are already delighted that you are here to discuss a problem that is arguably as important here in the United States as it is around the world where we will be focusing on it. Let me just very briefly introduce myself and who will be conversant with today. Im sarah chayes. Carnegie endowment for International Peace in the democracy and rule of law program, not to the climate and energy program. Simon is going to kick us off. Simon taylor who is one of the founders of Global Witness which is in mighty one of the most innovative and effective organizations working in this space around the world, and it is very interesting combines advocacy with extremely rigorous investigations, and thats one of the things that will be talking about today is a recent report by Global Witness about shells activity in nigeria. He also helped galvanize a coalition of suicide organizations of 40 countries worldwide, working for more accountability and openness init the sector. Its called publish what you pay. Saving next to simon is steve coll who is of the dean of Columbia Journalism School sitting next to has a whole other dimension of effort in the current political space. He also, just a bevy of awards has one no less than two pulitzer prizes. The first one for reporting on the securities and Exchange Commission, which again has some real relevance. Hes also the author of private empire, which is a read data recommend to all of you when you are done with this. Go out and buy private empire and it tells you a lot, not just about the industry but also about quite unimportant element of u. S. Politics at the moment. And Olarenwaju Suraju is a member of the human and Environmental Development agenda. St and i just love that, like lets put those two together, human and Environmental Developmentdee sidebyside. Its in the legos nigeria and hes an expert on the auto sector in nigeria and participate in this investigation as well as some others. So thanks again, and let me just come over here and join the conversation. That means like i have to justst ask your forgiveness while i do this. And let me just start, simon, asking you about this shall. What is it that michelle new and what cause you at Global Witness to really feel like this was such a critical subject to investigate . Okay. Thats a good question. So yes, indeed, what did they know . Is not just a day who knew. There were a few other people who knew but i will come to that in the second. Perhaps i can set with some very boring stats that say quite a lot. Ey many of you be familiar with the Antibribery Convention from 1999. In 2014 they did a study of some 400 Corruption Cases which looked at the period of operation of the convention. And fully twothirds of the cases they looked at involved just for factors. And guess what, the one that featured the most times was the extract is sector with 19 of the cases. Most of these involve public procurement contracts or access to concessions, and most also included players who were from wealthy countries. Tr i think we can say quite a lot about that. Ive spent i guess Something Like the last 20 is looking at corruption in the oil and gas and mining sector. I would add a further twist that refines for me at least the notion that the extractors is the most corrupt sector. The oil sector because everywhere we look, in certain regions, i no longer ask where is the corruption. Its more which concession is not corrupt. Sk i think thats a very true situation. On top of that i would say there arcertain members of the oil industry who i do now as severely corrupt because everywhere we find them, theyve been involved in corrupt deals. So thats the thing i would like to set. One of the things we have been doing in this past twentyyear period has been on the one hand, to understand how corruption works, and then look at policy prescriptions that might come to play along with other prescriptions because were not just talking about the operating search of the oil industry. We are talking about banks operate, how monies flow internationally. Y. We can come back to that in the discussion about solutions a bit later. But actually to understand the different married and mechanism of corruption we are to investigate and thats wherean this comes along. This is just merely the latest development in our work on this case study around nigeria called opl 245. Nigeria, probably west africas largest oil block. The history, too long to go into it beyond a very high level detail, but essentially it boils down to the deal that was included in april 2011 in which shell, we all know show, listed in the u. S. But also in uk and in the netherlands, together with its partner which is italys Largest Corporation acquired opl 245. The problem is they spent two years directing negotiating with the person who owned it which is not other than for managing dictator the oil minister. Who in april 1998 set up a Shell Company called malibu, face up a piece of paper which consisted of him as the owner hidden by a false name together with a batch of some and the secretary of the company was a sort of the imagee have in my mind was a sort of better call salt type letter in the backstreet office. For those of you who know the breaking bad series. Thats the kind of operation shall we were involved with. Basically the Biggest Offshore Oil blockade, essential going to bed with a piece of paper. No skill set, no knowledge, no backup and they must have known that this was a stolen piece of real estate of the nigerian piee state. I wont bore you with details from the beginning but there is then various litigation battles happen. Malibu lost the plot, shall lost it and malibu got it back, various litigation process went on. Ss then we arrive in 2009. The beginning of the negotiation over a twoyear period with delightful emails that come out from that time which have come out of course cases. One particularly noticeable is one where a former mi6 official who was helping them, mr. Bonds company you will probably be familiar, with writing to some people further up the chain, its difficult to come to an arrangement where he would be happy with the mentally getting on much better. Its an interesting sort of coats the way which things were preceding. Suffice it to say, the initial effort they went through to strike this deal collapsed. In the end of them nigerian attorney general who also happen to be a former lawyer brokered the deal they came to pass. Basically what it consisted of was that by passing from the treasury of a payment of 1. 1 billion through an escrow arrangement delivered a set upup in london, run by jpmorgan. The money filtered off into a series of other Shell Companies back in nigeria. And with where did it go . The revelations are interested because we acquired some internal emails which showed the highest levels in the country in shell epithet that we can include also the Italian Company as well, the money thing he was going to go on to eyes level officials and get it when had with the deal anyway. So today they are in possession of stolen goods. They didnt pay the Nigerian Government for these assets and they are now being investigated in criminal investigations in multiple country. Presley and come back to the details later. Later reinforce something m here. Youve got all of this shell, shell with the shell arrangements, right . Sorry, but what is it that they are circumventing . In other words, theres a fairly clear nigerian law, correct . Theres multiple laws. It was illegal for him to give himself as minister nigerias biggest offshore block. Lets face it, shell could notot know the movie was. He was the oil minister they do with them for years. Th they dealt with them as though he were the private owner of exactly. On top of that the structure they created in the deal as it was concluded with via escrow arrangement in london. We consider that to be a deliberate creation because had they paid as constitution required into the socalled reqi federation account, at that point the money would have gone into the whole of government and wouldve had to have been ask appropriate by the official process to be spent however. It could no longer be used to pay people. So they have to great and offshore system in order to be able to pass it and thats what they did. Just to belabor the obvious, what this whole thing is about is that you have, tell me if i have this right. Yo you have Nigerian Government and people assets, which by nigerias law, the payment for it needs to go into the federation account, which is like the federal budget, right . And they directed that payment speed is not to go into them. And that was created by the way which the deal was constructed. Essentially a mechanism was greeted to bypass the normal channel and went into private hands. Lets put this in context. 1. 1 billion which we consider to be off the back of a truck prize, because we know shells intro estimates were substantially higher. There was a question there. Off the back of the truck . English apologize for that. When you know, this is speedy a Bargain Basement price . Why would anyone want to from a business perspective from the cupboards perspective want a bargain sell off price . Because the money was going to somewhere else. One of the things you see from in these emails that we report here, that there was a highest level discussion within shell about how they knew there was a high likelihood that the money would go on through various press and determine mechanisms to highest level officials, including good luck jonathan who is specifically mentioned. We have internal discussions at highest levels with knowledge of the high likelihood that money would go on. Yet they went ahead. Shell is talking to shell about the fact the rather than by this asset for managing people, they are going to buy it as though it were the personall property of this little Shell Company, and by calling it the personal property of these three guys they are able to get it wicked cheap, whereas it they have had to buy it from the nigerian people, presumably the Nigerian Government would have negotiated, if it were a government acting on behalf of of its people, it would have been that type of the government then it wouldve been putting the screws in to get a much higher price. A you would expect that it would have looked at for the interest of the people are sold it for the best price. In 2011 we were at a different price structure that we are today. Theres many other aspects of this that greatly complicate the discussion but in essence, they saw that the actual holder of the asset was malibu so they went about in protest of initially trying to buy direct from malibu. Having negotiated with him for two years, nearly two years and ended up including, concluding a deal brokered by the attorneyyao general who, in fact, used to be the lawyer. And the arrangement bakery was this offshore. E. That wasnt an arrangement the attorney general instructed. This was designed by the company. Steve, youve been looking at the sector worldwide, as has Global Witness but i just wonder if you can place this story in, you know, in, again come to look at a number of other countries, is this an aberration . Is a relatively typical . What are we dealing with in this sector . Its a fascinating case and it sounds like it will go on for a while so we probably learn a lot more as investigations by judicial authorities proceed. It is part of the much larger picture as simon alluded to. I thought i would mention a couple of points of context may be from my own reporting. Sarah was kind enough to mention private empire, a book about exxon mobil, and American Foreign policy was sort of the idea. Actually i sort out to write about the geopolitics of oil in the age of constraints, the age of Climate Change, the age of increased competition. I got out in to the research and i thought i dont have a story, i better choose a company site chose exxon mobil. I had no idea what i was getting into. It seemed like a good subject ae the time, and so then i made enough of of where exxon mobil produced its oil. I was very interested in the distortions created by wealthy Global Corporations extracting oil in very, very poor societies, not even just developing societies but the poorest. One of the places exxon mobil worked was chad, for example. They had been there trying to develop some rather difficult landlocked oil that a difficulty geological characteristics, was a long way from the ocean. Nigeria recurring theme of these kinds of crimes because nigerian oil is very appealing. Om its right near the ocean. Us its easy to get to market. Its sweet crude and it produces well. But chadds oil is difficult oill and chat is a very poor societ, very unstable. Subject to two attempts repeatedly, and coup attendst i go down to the oil area, talk to people who live down there, people who worked on the exxon compound, government officials, suicide activist, lots of different people after a couple of weeks of the threat and said why is exxon mobil here . What are they doing . They are producing a few hundred thousand barrels of oil a day in the consortium, but this isisi really difficult territory,hat s politically unstable. Why is it necessary to be here doing this business . An interesting and important answer which is one of the dilemmas that at least until the shale revolution Big Oil Companies faced was that they were producing more oil every year than they were fighting. They had run out of easy oil basically pick they had run out of domestic oil. They had run out of simple oil to produce. And so they would going further and further into difficult frontiers, both difficult p production frontiers like the arctic where there were high risks and very difficult engineering challenges, it also difficult political frontiersal because they just needed theusey oil. Every che 21,000 barrels a day counted. So that was the answer to either in chad. Its also why there in Equatorial Guinea and why they were in places where no reasonable company would really want to do a lot of business, to be honest. That pressure on global Oil Producers is, remains. There are Technological Breakthroughs that can take you away from political risks and bring into different kind of risk like drilling in really deep water drilling and really hostile cold climates. But thats a fundamental piece of context for this constant interaction between wealthy companies and poor societies. I want to stop you on that also and just say reading private empire, like this was a transformational thing for me about the book was understanding this business model. Its not about, or its not just about selling oil. About proving to youroducers shareholders, right, that for every barrel of oil you sell, you found a new one. Because who would want to buy shares in a supermarket that old has as much milk as is on thete shelf . Is at the right way. Was that pressure was especially strong around the time that i was working on this book but yes, thats it. The other thing you have to understand and richard simon, you run into this, and it is putting bribery cases like involving shell and maybe more shall than any into it to a larger context, if you look at a list of the 20 largest Oil Companies in the world, 18 of them are stateowned. You have, owned by russian entities, like china, by india. Its an exception exxon mobil to be fully privately controlled to the extent you consider exxon mobil completely independent of the United States. They certainly see themselves as independent of the United States. And so was interesting about what simon and folks do, and will get to this in the solutions part, the very fact wher these companies are accountable to stakeholders other than governments that own them actually creates the point of leverage. There different kinds of vulnerability. Fe they have shoulder fairly static shareholders, security and Exchange Commission, services i do groups that, whereas they dont feel those pressures. It and so its a complicated structure to think about trying to change. Ns. Because you have all of these privately Held Companies that feel why are we the guinea pigs for a Global Governance system that doesnt touch are stateowned competitors . It also means theres probably quite a lot of these transactions involving state owned companies and poor governments that are even worse, that we cannot access, despite some of the best investigators in the world. Cannot i would say the u. S. , the last point i wanted to make by way of context is that i think its important to say out loud that this administration, unlike the last republican administration, is actively departing from transparency as a solution to corruption in these administrations. The extracted Industries Transparency initiative which will talk about later, which is by no means a magic bullet but it is part of a suite of transparency efforts that were developed in the early 2000s 20s with the support of the bush administration. And now the Trump Administration has come in and basically one of its first ask of rolling back obama era rules pulled the plug a transparency requirement that the secure security and Exchange Commission was made to bring forward and has been signaling that they are going to withdraw the United States f