SEC Versus NASS: The Kettle and the Pot

Everyone now knows the story-the House of Representatives Committee on Capital Markets decides to conduct a public hearing on the capital market, as should be its purview. It fixes a date and arranges other logistics for the hearing, and then writes a letter inviting the Director-General of the Securities and Exchange Commission (SEC), the government-established regulatory agency for the capital market, again as it should be expected (or indeed required) to. The problem arises when it attaches the budget for the hearing to its letter to the SEC DG, implicitly or explicitly soliciting a donation in support of the hearing. This is the principal agency which the committee by virtue of its mandate exercises legislative “oversight” over! We can go on and on about the capital market committee, but it seems this is a regular, indeed routine practice between the legislative houses and agencies and ministries (and perhaps even private sector entities?) affected by matters which are before the legislature and its committees! This practice makes absolute nonsense of the independent judgment parliament is required to exercise on behalf of the electorate whenever conducting investigations or considering some legislation. Essentially the consequence of such a practice, even if individual legislators did not benefit in any way from the “assistance” offered by these entities is to bias the legislature and erode its independence and impartiality. It is worse if members of the investigating panel actually receive benefits in cash, or kind (such as airline tickets-probably first class or business, to the Dominican Republic!) from parties with an interest in the outcome of investigations or legislation. Other questions also arise-do ministries, departments and agencies include monetary support for the National Assembly in their annual budgets? If not, how do they procure the funds they utilise for such purposes? Should tax payer or public funds be utilised in this manner? Where public funds are used by an executive or regulatory agency in this manner, is the public required to know? Has there been transparency around such payments, which by all accounts appear to be a regular phenomenon? Aren’t there appropriations in National Assembly budgets for its committee sittings and public hearings? But then let’s go back to the story! SEC decides to “support” the committee hearing and duly approves a sum of N30million to be disbursed to the committee! At this point, both SEC and the House Capital Market Committee are indictable for corruption!!! As we know, both the person who solicits a corrupt inducement and the one who pays or offers to pay are potentially guilty of a crime! Again questions arise-did SEC have provisions in its budget for paying for legislative investigations? Can such a hearing be covered by the omnibus phrase “capital market development”? In what way does the “reformist” leadership of SEC think this action was different from the behaviour of its predecessors which it claims to be reforming? Anyway for some reason, the consensus-ad-idem between SEC DG Arunma Oteh and the House Committee Chair, Herman Hembe breaks down and the committee chair decides to go for Oteh’s jugular! And fortunately he has some fairly strong ammunition in his hand!!! Apparently Ms Oteh has been living in Nigeria’s most expensive hotel, Transcorp Hilton for over nine months running up a bill to the tax payer in excess of N30million! Mrs Oteh’s defence is to blame her subordinates for misleading her and not providing alternative accommodation as promised! Quite frankly, these statements somewhat validate Mr Hembe’s allegations of incompetence even if in his case, they may have been motivated by malice! The day the DG reported at SEC, she became CEO at the agency and became accountable for all the public funds entrusted to it. It became her responsibility to familiarise herself with rules and regulations guiding SEC and public service and to ensure that public funds were not spent in an irresponsible manner. Of course she must be aware of the maxim, “ignorance of the law is no excuse”! Indeed it does not require knowledge of any specific laws or regulations for a responsible public officer to know that spending N30million in a hotel cannot be a prudent manner of expending the resources of a financial market regulator! Could she have done that at the African Development Bank where she came from? Could an official of the US SEC spend the agency’s funds in that manner? How different was her behaviour from that of those she dismissed at the Nigerian Stock Exchange? Ms Oteh had also apparently engaged the services of two personnel from a publicly-quoted bank who worked in her office even though she claimed their work did not form part of the agency’s regulatory core? Again why did she feel comfortable risking accusations of potential conflict of interest and bias given that the bank was involved in significant transactions before SEC at the time? Well the SEC DG then fought back with a public attack on SEC employees whom she evidently suspected of leaking information to the committee and revelations that the committee chair had requested a bribe of N44million, and obtained funding for a trip to Dominican Republic which was never made. If you ask me, this sounds like the pot and the kettle-both look very black to me!!!