Uganda scoffs at $50m Museveni oil bribery claim By TABU BUTAGIRA for Daily Monitor | Tuesday, March 19  2013 at  09:11

Visitors at Tullow Oil stand during the 5th East African Petroleum Conference & Exhibition in February 2011 in Kampala, Uganda. The Ugandan government has denied claims of plans to bribe President Yoweri Museveni to unlock Tullow investments in the country. FILE | NATION MEDIA GROUP 

The Ugandan government has firmly rejected insinuations made in a London court that British explorer Tullow Oil was considering making payments to President Uganda Museveni in return for favourable treatment.

In the first official response to the allegations, government spokesperson Fred Opolot said the revelations that one of Tullow’s top executives mooted an idea to make an “undocumented” $50 million payment to President Museveni were false.

"Whoever is mooting an idea of a bribe or anything of that nature to any official of the government of Uganda will only be making a fool of him or herself,” Mr Opolot said in a statement issued Monday. The Uganda Media Centre, which Mr Opolot heads, falls under the Office of the President and speaks on behalf of the government.

He added: “Uganda’s oil is a rare resource and the President has made it very clear that he will not accept any sort of arm-twisting to relent to a raw deal in this sector.”

Information about the proposed pay-off came to light during cross-examination in a separate tax dispute case between Tullow and Heritage, another explorer, over $404 million capital gains tax due to the Uganda government, which Heritage disputes.

Tullow, desperate to unlock its stalled business in Uganda, paid one third of the amount and deposited the balance in an escrow account with a bank in London in 2010 before separately suing government and Heritage in an attempt to recover the tax paid.

At the height of the protracted tax bargains, Tullow, whose chief executive Aidan Heavey reportedly made financial contributions to campaigns of ruling Conservative Party, rallied UK government officials to leverage on Ugandan officials. This included President Museveni, whom Foreign Secretary telephoned on August 30, 2010 to push for Tullow’s commercial interests.

'Outrageous'

During proceedings in the London court last Thursday, UK media quoted Heritage legal counsel, Kwahar Quereshi, submitting that Tullow’s Exploration Director Angus McCoss in an August 2010 group email suggested the idea $50 million be paid to “meet the short term needs and demands” of President Museveni, referred in the correspondence by the acronym M7.

In the alternative, Mr Quereshi told the court that Tullow toyed with the idea of financing Mr Museveni’s campaigns for the February 2011 presidential and general ballot, which the President won by landslide.

But Tullow company secretary Alan Graham Martin, while giving evidence at the same commercial court presided over by Justice Burton, said the suggestion they mooted an idea to act unlawfully was “outrageous”.

There is no evidence to show that any money was subsequently paid. Tullow’s officials in Kampala declined to go on the record that Mr McCoss never sent the mail, arguing instead that he “did not suggest making any payments whatsoever to the President or to any political campaign.”

“This point has arisen out of false allegations made by Heritage Oil’s legal team during this trial which Tullow has firmly rejected,” Tullow Uganda Spokesperson Cathy Adengo noted in a reply email enquiries from this newspaper.

“Tullow has not and does not pay bribes under any circumstances.” She declined to comment further so as not to prejudice an on-going judicial matter.

This is the second time officials of the London-listed company are linking Mr Museveni to irregular payments over oil deals, something the President described as “despicable.”

Wikileaks

In one of several US diplomatic cables released by whistle-blower website, Wikileaks, in August 2011, Tullow’s then head of external relations in Uganda, Mr Andy Demetriou, reportedly told an official of the US Mission in Kampala on November 24, 2009, that: “Tullow believes ENI made personal payments to President Museveni and Ministry of Energy officials in return for Tullow’s offshore exploration rights.”

Asked by this reporter about the allegations during an October 12, 2011 press conference at Nakasero State Lodge, the President said: “[For] General Yoweri Museveni Kaguta, Ssabalwanyi (master fighter) to get money from a Mzungu (white man) or anybody for my personal use! It is contempt of the highest order for somebody to say that.”

The President then dismissed Mr Demetriou as an “idiot”, adding: “Even if you found me asleep and put money with a note [saying the payment] is from ENI, then ENI must have made a very bad investment because ENI did not get anything for it.”

An ad hoc parliamentary committee headed by Ugandan MP Michael Werikhe is investigating separate allegations made in Parliament that Prime Minister Amama Mbabazi, Foreign Affairs Minister Sam Kutesa and his then Energy counterpart Hilary Onek, could have received irregular payments from Tullow and Eni.

The allegations remain unproven to-date and the three officials robustly deny the allegations. A police investigation has already cleared them of the allegations.

In yesterday’s statement, Mr Opolot raised questions about the motive and timing of the revelations from the London court. Mr Opolot cited the President’s unwavering insistence on building a domestic refinery ahead of oil production – something foreign oil firms initially rejected – as demonstration of Mr Museveni determination to safeguard Uganda’s interest.