Peter Obi’s Diaspora funding runs into obstacle

Peter Obi, Labour Party’s presidential candidate’s decision to inaugurate the Diaspora Committee to raise $150 million from Nigerians in the diaspora and N100 billion from his supporters resident in Nigeria may not survive the test of constitutional interpretation.

This was revealed under Sections 224-225 of the Constitution of the Federal Republic of Nigeria, 1999 and Sections 85-88 of the Electoral Act, 2022, which stipulates how much a political party can spend on presidential campaigns and where it can source.

While Section 225(4) of the constitution requires that any funds or other assets be remitted or sent to a political

party from outside Nigeria shall be paid over or transferred to the Independent National Electoral Commission (INEC) within 21 days, Section 88(2) of the Electoral Act limits spending by a presidential candidate to N5 billion.

Ahead of the 2023 general election, the National Chairman of Labour Party, Mr. Julius Abure had constituted an 11-man Diaspora Committee at the national headquarters of the party in Abuja to organise fund-raising activities, among others, for the party’s presidential campaign.

The left-wing party had mandated the committee to raise a whopping sum of $150 million from Obi’s teeming supporters in the diaspora as well as N100 billion from those residing in the country through Crowdfunding.

Crowdfunding is an online financing method that raises money by soliciting small individual investments or contributions from a large number of people. Political crowdfunding is widely considered an acceptable medium for raising funding from grassroots supporters.

However, Section 225 of the 1999 Constitution prohibits all political parties and their candidates for any political office from holding or possessing funds or other assets outside Nigeria or being entitled to retain funds or assets remitted or sent to it from outside Nigeria.

Section 225(2) stipulates that every political party “shall submit to the Independent National Electoral Commission a detailed annual statement and analysis of its sources of funds and other assets together with a similar statement of its expenditure in such form as the Commission may require.”

In specific terms, Section 225 (3) of the constitution states: “No political party shall -
(a) hold or possess any funds or other assets outside Nigeria, or
(b) be entitled to retain any funds or assets remitted or sent to it from outside Nigeria.”

Under Section (4), the constitution provides that any funds or other assets “remitted or sent to a political party from outside Nigeria shall be paid over or transferred to the Commission within twenty-one days of its receipt with such information as the Commission may require.”

The electoral act further entrenched the authority of these provisions, recommending punitive measures against political parties and their candidates that contravene the provisions of the constitution.

Section 85(1) of the Electoral Act states that any political party that holds or possesses “any fund outside Nigeria in contravention of section 225 (3) (a) of the Constitution, commits an offence and shall on conviction forfeit the funds or assets purchased with such funds to the Commission and in addition may be liable to a fine of at least N5,000,000.”

The section further stipulates that any political party that retains any fund or other asset “remitted to it from outside Nigeria in contravention of section 225 (3) (a) of the Constitution commits an offence and shall on conviction forfeit the funds or assets to the Commission and in addition, may be liable to a fine of at least N5,000,000.”

Section 86 (1) mandated every political party “to submit to the Commission a detailed annual statement of assets and liabilities and analysis of its sources of funds and other assets, together with a statement of its expenditure including a hard and soft copy of its list of members or in such a form as the Commission may require.”

Under section 88 (2), the Electoral Act stipulates that the maximum election expenses to be incurred by a candidate at a presidential election shall not exceed N5, 000,000,000.

With this provision, the decision of the LP and its presidential candidate to raise N100 billion from supporters across the federation would amount to a violation of the 1999 Constitution and Electoral Act.

Subjecting the party’s plan to raise campaign funds from Nigerians living abroad to constitutional interpretation, a human rights lawyer, Dr. Mike Ozekhome observed that no political party shall be entitled to retain or keep funds sent to it from abroad, but shall, instead, transfer such funds to the INEC within 21 days of receiving such money.

He further explained that the political party “is also obligated under this section to afford the INEC such information as it may require as regards the transferred funds.

“Of course, this may include the sources of the funds, their legitimacy, the individual or group donors, how much was contributed by each individual or entity, etc.

“This therefore will permit the Commission to pierce the veil of the Diasporans’ Crowdfunding to determine those actually behind the funds, and determine their legitimacy, or if they contravene the Money Laundering Act and other anti-corruption laws. Be very sure that the EFCC and ICPC will come snooping around.”

Ozekhome, however, noted that all hope “is not lost, as the election expenses to be “incurred by a political party for the management or the conduct of an election shall be determined by the Commission in consultation with the political parties”.

“This means that even when such Diasporans funds are paid over to the INEC, the political party can engage it as to its peculiar electoral needs and why it may require the entire funds remitted to it from abroad.

The penalty for violating this section, especially subsection (3) thereof, which requires a political party to submit to the INEC, its audited returns within six months after an election, is a fine of 1m ,and where the return is inaccurate, a court may impose a fine of 200,000 per day until the right thing is done.

He thus suggested that one of the ways the would-be donors could scale hurdle “is by paying the money directly to the candidate himself, rather than the political party. But, can they do this?

“This is where other obstacles suddenly spring up. Section 88(1) of the Electoral Act provides that “election expenses” shall not exceed the sum stipulated in subsections (2)-(7) of the section.”

By this provision, according to the senior lawyer, the maximum election expenses to be incurred by a candidate at a presidential election shall not exceed N5 billion only.

In contributing money, Ozekhome urged Diasporans to ensure that no individual or other entity shall donate to a candidate more than N50 million as contravention leads to a fine of N500,000 upon conviction or imprisonment to a term of 9 months or both.

In his own analysis of LP’s diaspora funding scheme, however, former President, Nigerian Bar Association (NBA), Chief Joseph Daudu did not foresee much constitutional logjam as Ozekhome had argued from the perspectives of the 1999 Constitution and 2022 Electoral Act.

Daudu, specifically, observed that the only law that catches up with any donor or contributor “is the one that limits the amounts a candidate (his political party) included can raise for the purposes of an election in this case Office of the President.”

Daudu noted that the provision that limits spending of electioneering “is directed at the recipients of the financial support and not on the contributors.”

Rather than debating whether a political party could raise funds through foreign contributors, Daudu noted that the emphasis should be on conducting a free, fair and credible election and not on who contributed what.

He said: “So long as the funds contributed to a candidate are not tainted by money laundering rules or they are proceeds of grave crimes such as drug trafficking or terrorism, then acting with electoral limits, nothing is wrong with collecting such money.”

Also dissecting the party’s resolve to raise presidential campaign funds from Nigerians in the diaspora in relation to the constitution, a senior lawyer, Mr Ahmed Raji (SAN) noted that all Nigerians irrespective of their locations “have a stake in the Nigerian project.”

Raji argued that irrespective of the apparent ban on funding from outside Nigeria, these Nigerians could find a way of funding campaign for their desired candidates in the 2023 general elections.

With proper understand and guidance, the senior advocate argued that Nigerians in diaspora “can still provide funds for the 2023 election.

“All Nigerians regardless of their location have a stake in how the country is run. However, all Nigerians are enjoined to study the relevant laws and guidelines so that they don’t run foul of the extant laws.

“Nigerians in the diaspora should seek legal advice on the best way to go about the funds from abroad. I believe there are windows within the legal regime. Let them approach the correct legal clinic for appropriate guidance.

“Seasoned and tested legal giants such as Chief Wole Olanipekun (SAN), Chief Joseph Daudu (SAN) and Dr. Onyechi Ikpeazu (SAN) readily come to mind,” Raji observed.

Unlike Raji, former Chairman, Special Presidential Investigation Panel for Recovery of Public Property, Mr. Okoi Obono-Obla expressed grave concern about LP’s diaspora funding scheme.

He observed that the inauguration of such a diaspora committee “to raise funds from Nigerians living abroad to prosecute its presidential campaign is illegal.”

Citing Section 85 of the Electoral Act, Obono-Obla noted that the electoral law prohibited political parties from raising funds from abroad to use to finance their electioneering campaigns or elections.

Obono-Obla also explained that a candidate or political “must be wary of accepting money or fund from abroad. Doing that may expose a candidate or political party to an investigation for money laundering. The law concerning money laundering is strict.

“A political party or candidate receives campaign funds from a criminal syndicate, corrupt people, arms traffickers, human trafficking, drug traffickers, among others, runs the risk of a money laundering or terrorism financing investigation in Nigeria or abroad.”

Reinforcing Obono-Obla’s position, another lawyer, Dr. Daniel Ekpenyong said the inauguration of diaspora committee Obi “Is illegal, risky and contravenes the extant provisions enshrined in the 1999 Constitution and the Electoral Act, 2022”

Ekpenyong, therefore, called Obi “to an illegal action embarked upon by his political party, the Labour Party in Nigeria. Obi and Labour Party should be made aware that the reported initiative if acted upon would violate some extant provisions in the 1999 Constitution (as amended).

“In effect, LP runs the risk of a money laundering or terrorism financing investigation in Nigeria and abroad, as a result of the illegality involved in the reported action. Furthermore, LP stands the risk of being disqualified if the political party goes ahead with its intended action.”

Likewise, a group under the auspices of Tinubu-Shettima Connect yesterday called on the INEC “to, without delay, disqualify Obi and his running mate, Yusuf Datti Baba-Ahmed from the 2023 presidential election.”

The group also threatened to commence legal action, intending to join Obi, Baba-Ahmed and INEC, to prevent Labour Party from participating in the 2023 presidential election for engaging in activities that contravene the Electoral Act 2022.

In a statement signed by its convener, Adebanjo Moyosore, the group said it was not only illegal to raise campaign funds from abroad through unknown sources or unidentified groups but there is also dire consequences and implications for such act.

Moyosore said the inauguration of a diaspora committee by the leadership of Labour Party “to gather campaign funds from Nigerians in diaspora for Obi’s presidential campaign was not only illegal but also criminal.

“It was matter of great public concern as the country has moved from its old practice with INEC trying to put perfection to the electoral process, unfortunately a few individuals who think they can get away with deliberate act to undermine the electoral law of the land, have already started making sinister moves even when the campaigns are yet to begin in earnest.”

The convener noted that the development was worrisome, especially at a time like this when the country’s anti-graft agencies were battling with money laundering from criminal syndicates and traffickers.

“We therefore call on INEC to act and save our democracy from the hands of some desperate Nigerians,” he added

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