Following a Haaretz Expose, Nigeria May Cancel Arms Deal With Israeli Firm

Yossi Melman head
Yossi Melman
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Yossi Melman head
Yossi Melman

In recent days, several Israelis arrived in the Nigerian capital of Abuja to staff and develop the offices of Aeronautics Ventures. Maoz Steinhauer stands at the helm of the company, which is listed abroad. Aeronautics Ventures is the operant branch in the largest arms deal ever landed by the Yavneh-based Aeronautics Defense Systems company. A report regarding the $260 million deal appeared in Haaretz about a month ago.

The deal involves sales of land and sea drones (that operate from ships) to be used in the defense of the Niger River Delta region. This is the region in which Nigeria, the largest oil-exporting nation in Africa and one of the largest in the world, produces its black gold. During the last year, armed bands of guerrillas and pirates have been systematically attacking pipelines in the region and kidnapping employees of foreign companies, disrupting the function of the oil industry, which is Nigeria's main source of income.

If the deal goes through, it will also be one of the largest in the history of Israel's relations with the African continent (with the exception of the massive military assistance that Israel extended to the apartheid regime in South Africa).

'I was not involved'

Since the Haaretz report, there have been a few new developments in the controversial transaction, and additional information has become available. The central development is a failed attempt by Nigerian President Olusegun Obasanjo to amend the constitution in order to present his candidacy for a third term in office. Another development is the in-depth report in the widely read Nigerian daily newspaper The Punch and reactions by figures in the Nigerian opposition to the Haaretz report.

As a result of these developments, several individuals credited with a role in the deal were quick to express their reservations and shake off suggestions of any involvement. They may feel that connections with this deal could complicate their future lives. The first among them was the president's national security adviser, General Aliyu Mohammed Gusau. In a telephone conversation with Haaretz, initiated by Gusau, General Gusau emphasized: "I was not involved in negotiations to promote the deal and I was not a partner in it."

Gusau, in his 50s, has been mentioned in the press as a potential candidate in coming presidential elections slated to take place in April, 2007. In the conversation, he described himself as a "friend of Israel" and said that he has visited Israel several times. Like many others in the world, he has tried to help Israel learn the fate of missing navigator Ron Arad. In the second half of the '80s, Gusau served as the head of military intelligence and later as chief of staff of the Nigerian armed forces under former-president General Ibrahim Babangida. Babangida is also mentioned in some circles as a possible candidate for the presidency.

Nigerian Ambassador to Israel Dr. Anthony George Manzo also wished to emphasize several points in relation to the arms deal. The ambassador, a physician, has served in Israel for two years. According to him, he was unaware of the deal and read about it in the Nigerian press following the Haaretz report. "The embassy was not involved in the deal," he said. "We do not have military attaches here and our military attache in Paris fulfilled that function."

Is it natural that the embassy be excluded from a deal like this?

"Absolutely. We are not aware of every financial transaction. It is natural and it happens in many nations around the world." According to Manzo: "Despite the impression left by the [Haaretz] report, the transaction was accepted in a proper and normal decision-making process by the [Nigerian] Ministry of Defense not by the President's Office."

Further investigations by Haaretz, with the assistance of knowledgeable sources in Nigeria, reveal that the President's Office the President and his aides were indeed involved in the decision. President Obasanjo was the nation's military ruler when, in 1979, he became the first ruler on the African continent to return the governing of the nation from the military to the citizens. When he retired from military service, he established an enormous agricultural farm with the assistance of Israeli experts, including Elisha Cohen. The late Cohen, a wealthy contractor, was exposed a few years ago for his involvement in organizing together with the Nigerian intelligence service the attempted kidnapping in London in 1984 of Dr. Umaro Diko. Cohen hired three Israeli mercenaries in order to bring Diko, a former minister of transporation, to trial in Nigeria.

In 1995, Obasanjo was imprisoned following accusations of planning a coup to overthrow the military dictatorship of former president Sani Abacha. In 1999, when the government was, once again, transferred from the army to the citizens, he was elected president of Nigeria and, in 2003, reelected to a second term by a majority of 60 percent.

Unexplained withdrawals

In Obasanjo's attempt to amend the constitution to seek a third term in office, he and his constituents launched a massive and extremely costly campaign to persuade members of the Nigerian House of Assembly to permit him to run for a third term. Nigerian sources claim that a series of questionable transactions and agreements, worth billions of dollars, were signed to provide funding for the pricey campaign. These are mainly government transactions funded by money obtained from oil royalties, controlled by the president, in the nation's central bank. The latest issue of the Nigerian magazine, The News, published an investigation of unexplained withdrawals from oil royalty accounts and revealed that, between October, 2005 and the end of March, almost $2.5 billion were withdrawn. Official spokesmen in the president's office and the government completely deny these claims.

As for the Aeronautics Ventures deal, experts estimate that, according to the value of the equipment, and even if Aeronautics profits from the deal reach 100 percent, the scope of the deal will not exceed $150 million.

The Aeronautics deal is surprising for a number of reasons. First, this is a relatively new company, established less than a decade ago by CEO Avi Leumi. It is true that the company has far-reaching connections in the defense establishment, mainly because retired general Avigdor (Yanush) Ben Gal, former head of the Shin Bet security services Yaakov Perry, and former chief-of-staff and transportation minister Amnon Lipkin-Shahak were members of the board of directors in the past. But Perry left the company more than a year and a half ago, and contrary to information published in the previous article, Lipkin-Shahak also is no longer connected with the company. Only Ben Gal continues to play an active role.

Aeronautics Ventures has never operated in Nigeria, where there is broad activity on the part of Israeli companies. Among others, retired brigadier general Shlomo Ilya and his partners Ben Gal and Meir Dagan (before he was appointed to lead the Mossad) were very active in exporting arms to Nigeria until a few years ago.

How did Aeronautics land the deal ahead of veteran drone producers like the Elbit aeronautics industry? There is no clear answer to this question only speculation. First and foremost, there is no question that the firm successfully spun a web of connections that reached the president of Nigeria. The deal was mediated by Israeli businessman Alon Nelken from Savyon. Nelken, who has played an active role in Nigeria for 25 years, owns the gigantic Mega-Plaza mall in Lagos.

Nelken mediated the transaction despite the fact that he lacks a permit from the Israel Defense Ministry's security assistance division to conduct negotiations involving security exports. He and his partner, Amit Sadeh, held contacts with senior figures in the president's office and the Defense Ministry to promote the deal. Among others, they were in contact with presidential aide Dr. Andy Uba, one of the most influential figures in Nigeria. These contacts culminated in a meeting between Aeronautics CEO Avi Leumi, the president, and Uba. Guidelines for the deal were apparently concluded at that meeting.

The Aeronautics Company refused to respond in this matter.

During the phase in which it became clear to Leumi, Nelken, and Sadeh that the president's office supported the deal, they began to step up the pace of the process from the planning to the implementation stage. Recently, they received an advance which, according to one source, is 10 percent of the deal, while another source maintains that they have already received 50 percent.

At some point, they also contacted Maoz Steinhauer and appointed him to direct the subsidiary company, Aeronautics Ventures. Steinhauer was previously employed, for about six years, by the HPI firm, listed in Switzerland. HPI mainly builds Nigerian seaports.

The Israeli community in Nigeria, which includes a few hundred individuals employed in agricultural, construction, industrial, security, and communications ventures, is abuzz with rumors that Steinhauer "abandoned" his former employers to move along with the deal to Aeronautics. But Steinhauer firmly denies these claims.

In a telephone conversation from Abuja, he responded, "There is no truth in these claims. It is true that I worked for HPI for six years. I decided to leave more than a year ago, and took leave of the company without any anger. It was an amicable resignation with no problems. I traveled to the United States for a given period and was then contacted by Aeronautics. Until then, I knew nothing about the drone project. As far as I know, HPI did not compete for the project at all and was unaware of its existence."

Some maintain that the deal will not go through now that the president has failed to amend the constitution.

"That is completely unrelated. I believe and hope very much that the deal will go through."

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