JP Morgan bank has admitted that it transferred $800 million of Nigeria's oil money to former petroleum minister, Dan Etete in the controversial Malabu deal.
Etete was appointed petroleum minister by late dictator Sani Abacha.
Using the powers of his office, Etete illicitly awarded Oil Producing License (OPL) 245 to himself in 1998.
The Malabu oil field contains about 9 billion barrels of crude oil. It is one of Africa's richest oil blocs. It was sold to Shell and ENI for $1.3billion during the Goodluck Jonathan administration in 2011.
Shell and ENI did not want to deal directly with Etete who had been convicted in France for his part in a separate money laundering scandal, so they wired the money to an account belonging to the federal government of Nigeria domiciled with JP Morgan bank, London.
The Federal Government of Nigeria under Jonathan thereafter transferred $801million of the money into accounts controlled by Malabu and Etete in Nigeria.
Investigators say the money was then shared to various public officials and cronies in Nigeria as bribes; with the government receiving only $210m USD as signature bonus on OPL 245.
Former government officials accused of receiving bribes in connection with the deal include Goodluck Jonathan who was Nigeria's president until 2015, former Attorney General, Mohammed Bello Adoke and former petroleum minister, Diezani Alison-Madueke who has been implicated in a host of illicit deals during her spell as petroleum minister.
In January 2018, the federal government of Nigeria sued "JP Morgan Chase for more than $875million, accusing it of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country’s former oil minister”.
The federal government had had stated in its suit that: “JP Morgan acted with gross negligence by allowing the transfer of the money without further checks”.
The government posits that JP Morgan should have known that, under Nigerian law, the money should never have been transferred to a third party.
“If the defendant acted with reasonable care and skill and/or conducted reasonable due diligence, it would or should have known or at least suspected ... that it was being asked to transfer funds to third parties who were seeking to misappropriate the funds from the claimant and/or that there was a significant risk that this was the case,” some parts of the suit instituted by the federal government, read.
JP Morgan had previously said that it “considers the allegations made in the claim to be unsubstantiated and without merit”.
Reuters reports that JP Morgan made the acknowledgement that it knew Etete was going to benefit, in its legal response to a lawsuit filed by Nigeria over the Malabu oil deal.