By Gift Chapi Odekina
The Independent Corrupt Practices and other related offences Commission, (ICPC), yesterday, accused officials of the Federal Capital Development Authority, (FCDA), of conniving with members of the Real Estate Developers Association of Nigeria, (REDAN), to swindle beneficiaries of the mass housing scheme in the territory.
In his submission at the investigative hearing on the operations of real estate developers in the FCT, ICPC Chairman, Prof Bolaji Owasanoye, said that the
the Land Department of the Federal Capital Territory Administration, (FCTA), was conniving with REDAN to swindle Nigerians in the territory.
He said his Commission has received several petitions and complaints from the real estate sector, off-buyers, developers, bothering on forgery, non-delivery of projects, marketing of fake land, fraudulent allocation, refusal of government to pay fair values for acquired land amongst others.
The is even as the House of Representatives tasked security agencies in the country, to intensify their operations to fish out perpetrators of all the ongoing sharp practices in the real estate sector.
The ICPC boss said the FCDA has refused to sanitize the real estate sector, even though they know about the sharp practices, “but look the other way.”
The Chairman said from investigations, the developers collected massive land with agreement to pay counterpart funding and develop the houses for intending Beneficiaries, but only to turn around and sell the land to the highest bidders.
Owasanoye confirmed that corrupt public officers were using the real estate as vehicles to hide ill-gotten wealth.
He asked that registration of land titles be made compulsory, so as to know the proper owners of the estates so that public officers do not continue to hide behind third party to acquire illegal properties.
The ICPC boss said many of the estate houses in Abuja were actually used for money laundering, which explained why the houses were left unoccupied even years after completion.
“The ICPC has over the years received a number of petitions since inception. Even though we have not aggregated the numbers that relate to land matters,
“we have however received a number of petitions from stakeholders in the real estate and housing sector, off-takers, prospective buyers and the general public regarding the behavior and antics of real estate developers within the FCT and sometimes outside of the FCT on this very important subject matter.
“These complaints and petitions are varied. They bother on forgery, the cloaning of land documents, double or multiple land allocations, allocation of land without the minister’s approval, revocation of land title without due process, non-delivery of projects, embezzlement of sourced capital, land racketeering, the use of land syndicates and speculators, the marketing od fake layouts, fraudulent allocation of land, inordinate delay in processing of land documents for those who subscribe to their projects, general abuse of office, bribery, dishonesty, fraud, payment scams, or the refusal of government itself to pay fair value for acquired land and the concomitant refusal of settlers and traditional owners to give access to legitimate land allotees and other related issues and challenges.
“In addressing some of the issue raised in the petititons that are forwarded to ICPC, we have at different times successfully investigated and prosecuted some errant public offficers and their collaborators including staff of the Federal Capital Development Authority, staff of Civil Defence, persons who abuse public trust, fraudulent real estate developemnt operatives and other ancillairy people, who have further deepened the mass housing gap in the FCT.
“Our investigations have led to the recovery of assets and funds, which are either considered to have been diverted that were retrieved in the public interest. In some situations, we have simply ensured that the projects that contemplated were delivered to the beneficiaries who had paid for them.
“Furtherance to the above conducted a systems study and review of mass housing delivery in the FCT in 2010 and 2011 where it was discovered that members of the Real Estate Developers Association of Nigeria (REDAN), who had been allocated huge plots of land for mass housing development in the FCT in collaboration with the Federal Government through the Federal Mortgage Bank and its responsibility to provide infrastructure upon which the allocations were made to them, and they were to work with National Housing Fund contributors. These developers failed in the payment of counterpart funding and the delivery of infrastructure to project site and rather they resorted to offering and selling the plots to the highest bidder contrary to the policy.
“Some of these abuses were hardly ever sanctioned by the FCDA. In other words, the FCDA in full knowledge of these abuses simply looked the other way. That the effect of the action of REDAN members of course is that low and middle income earners who are supposed to be the direct beneficiaries of NHF because some money is taken out of our salaries as contribution to the NHF. They were denied housing because the plan and objective was totally frustrated by the mischievous and fraudulent approach of the REDAN collaborators because those beneficiaries could not even secure housing allocation which forms the basis for accessing the fund. The estates ended up being the exclusive preserve of the rich in the society.
“The subsequent pressure this put on low and middle income earners is that it becomes a push factor for public sector corruption a public servants who are desperate for their own homes subvert the processes, government policies and they abuse their office for private gain in order to meet the desire for decent housing.
“Furthermore, some members of REDAN access funds from the Federal Mortgage Bank for mass housing but divert those funds to construct private estates, which are again sold at exorbitant prices to the general public, excluding public officers, who are the main and intended beneficiaries of the projects and structures and even the policies and mandates of the Federal Mortgage Bank. Such public officers cannot afford the high prices of such houses. It should be noted that by the original concept of the mass housing policy of government, developers are supposed to profile and forward names of allottees to FCDA to issue certificate if occupancy. But in practice developers do not comply with these policies and subscribers are often left at their mercies, holding only letters of allocation without a proper title to land.
“The intervention of the ICPC in this sector has led to recoveries on behalf of some allottees for FMB, FCDA and sometimes for other stakeholders.
“In a related vein, corrupt public officers use real estate investment as vehicle for hiding ill gotten wealth and money laundering. Public officers acquire estates in pseudonyms to conceal the illegal origin of funds.
“This is made possible by the absence of proper documentation, the registration of titles to land and estates in the country and the non-enforcement of beneficial ownership standards. A tour round Abuja especially teh metropolis and the central area, would show a lot of estates that are built up but empty. If they had been constructed with funds that were borrowed at market rates, I don’t think any investor would such proprieties empty. One way or the other they would put them to use. So it is suspected that some of those estates have been used to launder ill-gotten public funds.
“The commission has for example a case in which recovered 241 from a public houses from a public officer and another one in which we recovered 60 buildings on a large expanse of land from public officer. Corruption in real estate aids illicit financial flows. the real estate sector is globally recognized as attractive to IFF largely because it is partially informal, it is not properly regulated, easily open to abuse, the use of shell companies, the use of intermediaries and third parties to acquire real value with proceeds of crimes or illicit funds.
“I must note that major culprits and criminals, who are frustrating the problems are the staff of the FCDA and their collaborators. The ICPC over the years has partnered with a number of relevant registries to scale down the incidents of corruption in land tenure system by intelligence and information sharing, making available our forensic tools to analyze documents and detention of forged documents and by prosecuting offenders.
“The commission has at various times recommended administrative resolution, where FCDA is required to remedy whatever went wrong and to reallocate or to withdraw and allocation depending on what is teh proper justice of the case at the time. This is aside from prosecution of offenders where the infractions are found and breaches of relevant laws are established and in some cases, ill acquired assets are recovered and returned to victims.
“The defunct special presidential investigation panel on recovery of public property in collaboration with the FMB investigated some real estate developers who defaulted in remittance and payment of money due to government. The ICPC continued and completed this exercise and from it recovered a total of N53, 968, 158, 974.64.
“The figure comprises of part of the money that was paid and handed over in advance, about N858 million fully recovered returned to FBN. One billion naira post dated cheques that are due this month of October and N51 billion plus that were given to promissory notes in advance notarized agreement FMBN. We are happy the the Ministry under the leadership of the current Minister has taken the bull by the horns in introducing a lot of measures. Two years ago he wrote a letter to the ICPC requesting a collaboration to deal with a lot of anomalies that he met on the ground and we responded positively to that request by working with the FCT for improving the situation,,”, the ICPC boss stated.
He advised that efforts should be made toward providing transparency in mass housing projects by providing workable evaluation mechanisms to eliminate corruption that bedevils these schemes.
Also speaking, the representative of the EFCC from the department of Special Control for Money Laundering (SCOMOL), upheld the ICPC”s submission that intermediaries were constantly being used to make payments, without records to show details of actual owners of the properties.
The EFCC said there were no laws to sanction erring estate developers, asking that both administrative and criminal sanctions should be made available.
However, Chairman of the Real Estate Developers Association of Nigeria, (REDAN), Aliyu Wamakko, disowned all those fingered in the said sharp practices, saying that they were not REDAN members.
While Wamakko gave a list of his members in the FCT as 223, insisting that he knew all of them to be of impeccable character, the EFCC said it has established a list of 1000 members of REDAN in the FCT already, while the FCTA land department claimed a list of 181, the discrepancy which led the Hon Blesdin Onoche Onuh-led ad-hoc committee to order REDAN to produce it’s membership register in the territory.
Speaker of the House, Femi Gbajabiamila, while declaring open an investigative hearing on the operations of real estate developers in the FCT, commended the secuICPC and the Economic and Financial Crimes Commission, (EFCC), for their efforts to sanitize the sector.
Represented by Majority Leader, Alhassan Addo Doguwa, the Speaker said they had primary tasks and constitutional responsibilities as elected representatives of the people and of their various constituencies to, amongst other things, ensure the welfare and prosperity of the people, stressing that access to decent and affordable housing was one of the primary indicators of such economic empowerment.
“Withh the current housing deficit in Nigeria, which is estimated to be between 17 and 20 million housing units and also said to be increasing annually by 900,000 units, the potential cost of overcoming this deficit is about N6 trillion. This highlights the huge opportunity that exists in the real estate sector.
“However, there are gaps in the relevant legislation that empowers some real estate developers, while they capitalise on this opportunity to also operate with impunity, stealing away the dreams and billions of naira of hard-working Nigerians. A lack of accountability and regulation in the dealings between these real estate developers and home buyers has caused untold hardship to many already struggling Nigerians, who desire to own their own houses. It is our responsibility to introduce effective regulations to resolve these issues.
“I am happy to commend the efforts of the ICPC and EFCC in sanitizing the sector. Hardworking Nigerians should not lose their money to fraudulent developers with no consequence. Nigerians are crying out over these sharp practices, and we cannot turn a deaf ear to their cries.
“That is why I was very happy when Honourable Boma Goodhead brought the motion to the floor on the need to investigate the operations of real estate developers in the Federal Capital Territory.
“The resolutions of this committee will hopefully ameliorate and bring some lasting solutions to the lack of transparency, professionalism and accountability in the real estate sector while introducing legislation to protect home buyers from unfair contracts and other sharp practices highlighted in the sector”, the Speaker said.
