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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

Nigeria has so much natural wealth it has energy to burn.

(Soundbite of fire)

INSKEEP: An immense flame. Two immense flames are coming out of the ground, and even from this distance away, we can feel the heat. The flames are climbing higher than the trees around the spot.

Shell is burning natural gas which comes up unwanted in its oil wells. The oil has made Nigeria the world's fifth largest exporter to the United States, but there was no market for the gas until recently. Today, that flame offers the possibility of more energy for Americans and more income for Nigerians if they ever see the money. We're ending a series on Nigerian energy with the promise and peril natural gas.

Mr. BRIAN BUCKLEY (Manager): Nigeria is blessed with quite a significant reservoir of gases. In fact, it probably has more gas than it has oil.

INSKEEP: Brian Buckley manages a natural gas plant on an island in the Niger River Delta. Shell and other big companies invested in these red and white striped smokestacks. Gas is cooled here into liquified natural gas or LNG. It's loaded onto tankers, and growing amounts go to the US which used to produce nearly all the gas it needed for factories and homes.

Mr. BUCKLEY: That is no longer the case. The US is going to be the single largest growth area for LNG in the Atlantic Basin.

INSKEEP: And is it your expectation that a large percentage of that LNG to the United States will be coming from this very terminal?

Mr. BUCKLEY: Absolutely. In the next five or six years, Nigeria is most likely to be the number-one supplier of LNG into the US market.

INSKEEP: That leaves the question of who really benefits from Nigeria's next energy windfall. The multibillion-dollar plant on that Nigerian island is the subject of a corruption investigation. Contracts to build the plant went to a group of international companies including a subsidiary of Halliburton. Since Vice President Dick Cheney had once been Halliburton's chief executive, his opponent John Edwards brought up the deal in last year's campaign debate.

(Soundbite from debate)

Senator JOHN EDWARDS (Vice Presidential Nominee): They're now under investigation for having bribed foreign officials during that period of time.

Vice President DICK CHENEY: The reason they keep mentioning Halliburton is because they're trying to throw up a smoke screen. They know the charges are false.

INSKEEP: Under American law, it would be a crime to pay bribes overseas, and American authorities are still investigating this case. So are Nigerians, including one of the investigators we met. Ebraheim Magu(ph) waved us to a chair in a room with documents in filing cabinets, on his desk, in boxes on the floor.

Mr. EBRAHEIM MAGU: Here, sit down and I wanted to go through it just briefly.

INSKEEP: Magu let us read key papers. They show the construction companies hired a consulting firm, including a lawyer named Jeffrey Tessler. A contract from 1999 lays out a key part of the consultant's job: Make sure the construction companies were hired to build the latest phase of the gas plant.

Mr. MAGU: I want you to read the agreement, OK?

INSKEEP: "It was in the interest of the consortium," it says here and this is a quote now, "to secure the award of the expansion project on a negotiated basis as opposed to participating in competitive bidding in a competitive bidding process." So Tessler's job was to make sure that there was no competition really for this contract.

Mr. MAGU: Yes.

INSKEEP: And for that, according to this contract, he's paid a fee...

Mr. MAGU: Of 32,500,000 US dollars.

INSKEEP: $32.5 million.

Mr. MAGU: Yes.

INSKEEP: The contract goes on to say, among other things, that the consultant should maintain favorable relationships with government officials and others.

There was a series of contracts over several years. Halliburton acknowledges that the group of construction companies paid the consultant a total of $132 million. Jeffrey Tessler, the consultant, didn't return our calls and one of his lawyers declined to comment, but Nigeria's top anti-corruption investigator says much of that huge commission was meant to be passed on as bribes. Nuhu Ribadu is seeking evidence of even more payoffs.

Mr. NUHU RIBADU (Economic and Financial Crimes Commission): It's almost impossible for you to have such a project awarded without some form of compromise and corruption involved. It's almost impossible.

INSKEEP: Ribadu leads Nigeria's Economic and Financial Crimes Commission. Like many Nigerians, he's a Muslim. He moves about his office in flowing blue robes and bare feet. He's also a former cop who put his former boss on trial this year. To Ribadu, the natural gas case shows that Western firms deserve some blame for Nigeria's widespread corruption.

Mr. RIBADU: The entire thing happened outside Nigeria. The companies themselves were mostly foreign companies.

INSKEEP: But the bribes were paid to Nigerian officials.

Mr. RIBADU: But, of course, that is the one people are talking about.

INSKEEP: Halliburton has severed ties with two consultants who were accused...

Mr. RIBADU: Yeah.

INSKEEP: ...of benefiting from this money. Do you think that that is as deep as it goes at Halliburton?

Mr. RIBADU: I think it's more than that.

INSKEEP: You think it's more than that.

Mr. RIBADU: Yes, I think we are yet to know really what really happened.

INSKEEP: During some of those years, Vice President Cheney...

Mr. RIBADU: Yeah.

INSKEEP: ...was the head of the company.

Mr. RIBADU: Yeah.

INSKEEP: Have you uncovered any evidence that suggests that Mr. Cheney knew what was going on?

Mr. RIBADU: No, not from our own point here--definitely not. But then, of course, there was no way for such a thing to happen without the top leadership knowing. We're talking about a $4 billion contract. They're talking about giving out as much as a hundred million, $200 million out. It's impossible for such a thing to happen without the direct knowledge of whoever is in charge of such a company.

INSKEEP: When we called Vice President Cheney's office, his spokeswoman referred our questions to Halliburton. Halliburton officials made no direct comment on what Cheney knew. The company does dispute that the natural gas plant was really that valuable to Halliburton. In a statement, the company says Halliburton was not part of the deal at first and was later just one of four companies that had a share in the business. Halliburton has said it's cooperating with investigations by the Securities and Exchange Commission and the Justice Department.

Unidentified Man #1: (Foreign language spoken)

INSKEEP: The alleged payoffs come in a country sometimes ranked as one of the most corrupt in the world. You can see the problem just by driving through the oil-producing Niger River Delta. We were stopped at a security checkpoint and a policeman with a rifle jumped in our car.

Unidentified Man #2: (Foreign language spoken)

INSKEEP: What's happening? What's happening?

Unidentified Man #3: Well, where are you going?

INSKEEP: Where are we going?

The police took us off the highway and asked for money. Our Nigerian companions persuaded them to let us go, but for many Nigerians, this is the face of the government that controls so much of their country's treasure.

Nigeria's oil wealth is plainly visible here in Abuja, the capital city. Behind me, a gleaming white hotel rises among palm trees. In front of me, a building is under construction, and it's safe to say that this city was built with oil money because oil revenue provides the majority of the government's income. In recent weeks here in Abuja and across the country, one of the major subjects of debate has been who gets how much of that money. Nuhu Ribadu of the Economic and Financial Crimes Commission says corruption makes this debate even more divisive.

Mr. RIBADU: If you have corruption, you will not have justice. And if you don't have justice, you are going to have conflicts. And if you have conflicts, you will see people killing themselves.

INSKEEP: Does that increase the risk of the kind of social unrest or violence that could actually tear this country apart?

Mr. RIBADU: That is it. It's a vicious cycle. It goes around. What is happening in Niger Delta is a typical case of people feeling that they are cheated. And if you look deeply, you'll see clearly it is so--cheated by everybody including their own leaders, their community leaders, the government, everybody.

INSKEEP: Corruption investigator Nuhu Ribadu knows Nigeria is collecting a fortune. The rising demand for oil and gas could transform the finances of many African nations. Americans worried about their own energy security might ask if that money will ease the problems of Africa's people or if it will get burned like the gas flares that leap into the Nigerian night.

(Soundbite of fire)

INSKEEP: You can find our complete series, a Reporter's Notebook about Nigeria and more about the effects of burning natural gas at npr.org. This week's series was produced by Jim Wallace and engineered by Kimberly Jones.

This is MORNING EDITION from NPR News.

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