Obanikoro also revealed that he transferred N1.7bn of the money to Senator Iyiola Omisore, ex-Osun deputy gov.
Obanikoro on Wednesday, October 19, further revealed to the Economic and Financial Crimes Commission (EFCC) how he disbursed the N4.68 billion he collected from the office of the ex-NSA, Sambo Dasuki, in the run-up to the governorship election in Ekiti State in June 2014 and Osun State in August 2014.
The funds are believed to be part of the $2.1 billion meant for arms for the Nigeria military to enable its efficiency in the fight against Boko Haram.
But rather, the Office of the National Security (ONSA) headed by Dasuki allegedly diverted the money to fund the 2015 election.
The EFCC started grilling the ex-minister three days ago after he arrived the country from the United States and reported himself to the anti-corruption agency.
Obanikoro was said to have admitted that he transferred N1.7 billion of the money to the 2014 governorship candidate of the Peoples Democratic Party in Osun State, Senator Iyiola Omisore.
"He told the panel that the N785m was spent on procurement of souvenirs for the campaign against Boko Haram in Lagos out of which N200m was spent on surveillance activities and N200m out of other remaining funds for operations was managed by the supposed owner of the company, Taiwo Kareem," Punch quoted a source at the EFCC as saying.
Obanikoro was said to have told the panel that Dasuki was worried when a bomb blast supposedly occurred in Lagos, so he moved to ensure a recurrence was avoided.
He said the ex-NSA said a recurrence of the blast would gravely affect Lagos and Nigeria's economy.
According to the source, it was at that point that Silva McNamara was introduced to Dasuki.
Silva McNamara is one of the companies part of the money was transferred to and it is linked to Obanikoro’s sons, Babajide and Gbolahan.
Obanikoro reportedly said the money was paid into the personal bank account of Omisore and accounts of companies nominated by him (Omisore).
The former minister was said to have asked the EFCC to get the details of the transactions from the banks already identified.
The source further said: "He (Obanikoro) admitted that he transferred N1.7bn to Senator Iyiola Omisire out of the N4.685bn paid into the Silva Mcnamara’s account on the instructions of Col. Sambo Dasuki, the former NSA.
"He said a total of N3.880bn was transferred to Fayose and Omisore from the N4.685bn that was transferred to the company account of Sylva McNamara.
"The former minister told the commission that Tope Aluko (the then Ekti State Secretary of the PDP) and other PDP leaders were present when the dollars were handed over to Fayose, who took them to a room next to where they met."
Obanikoro, however, stated that Dasuki did not tell him what the funds were meant for.
The source said the ex-minister is still with the EFCC and that he fully cooperated with the investigators.