SPECIAL REPORT: Implications of US’ Foreign Narcotics Kingpin Designation Act for Tinubu presidency
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That Asiwaju Bola Ahmed Tinubu, who was declared the president-elect by the Independent National Electoral Commission (INEC) for the 2023 general election, was involved in narcotics trafficking in the United States is no longer news.
20 years ago Tinubu had to forfeit nearly half a million dollars to the U.S. Treasury Department after being named as an accomplice in a white heroin-trafficking and money-laundering ring that stretched from West Africa to the U.S. Midwest.
Consequent upon that, the pugnacious stench staring Nigeria and Nigerians in the face is the implications of the United States “Foreign Narcotics Kingpin Designation Act” for the Tinubu presidency if and when he is sworn in.
According to experts, if a person who has been found guilty of drug-related offenses and subjected to forfeiture of assets and property becomes the president of a country, it could have significant implications under the Kingpin Act.
The Kingpin Act is a US law that imposes sanctions on foreign individuals and entities involved in international narcotics trafficking.
If a person who has been convicted of drug-related offenses becomes the president of a country, the US government may deem that country as a state sponsor of narcotics trafficking.
This could lead to economic sanctions being imposed on the country, which could have far-reaching consequences for its economy and its relations with other countries.
The application of the Kingpin Act to a foreign country is determined on a case-by-case basis and involves a complex assessment of various factors, including the nature and extent of the drug trafficking involved and the response of the country to drug-related issues.
According to a source, the United States and other economic powers can arm-twist Tinubu, and by extension Nigeria, into a compromise or signing a document that will jeopardise the country’s interests and/or gains due to his drug past.
Tinubu’s involvement with drugs
Two decades ago Tinubu was identified as a bagman for two Nigerian heroin movers who operated out of Chicago and Hammond, Indiana.
They were Adegboyega Mueez Akande and Abiodun Agbele, Akande’s nephew, who was exposed to law enforcement after selling white heroin first to Lee Andrew Edwards, another dealer later jailed for trying to murder a federal agent, and then to an undercover cop.
In a 1993 court docket from the U.S. District Court in the Northern District of Illinois, IRS Special Agent Kevin Moss said that Akande had run the white heroin ring in the late 1980s until 1990, when he handed off the U.S arm of the business to his nephew, who had arrived in 1988.
Akande then returned to Nigeria but continued to oversee the operation from abroad with the help of others at home and in the United States, including his relatives.
One of the individuals identified in his cartel by Moss was Tinubu, then a Chicago State University-educated accountant working as a treasurer for Mobil Oil Nigeria Ltd, a subsidiary of energy giant Mobil Oil, which was still a few years shy of its famous merger with Exxon in 1999.
Read the full story below:
See what a foreign media wrote about Tinubu’s drug deal: “Nigerian pres’ Svengali tied to Heroin”
Salient facts about Foreign Narcotics Kingpin Designation Act
Kingpin Act is an Act to provide for the imposition of economic sanctions on certain foreign persons engaging in, or otherwise involved in, international narcotics trafficking.
It was passed by the House on May 13, 1999, through voice vote and passed by the Senate on July 21, 1999, again through voice vote.
It was reported by the joint conference committee on November 5, 1999, agreed to by the House on November 9, 1999, (through voice vote) and by the Senate on November 19, 1999 (through voice vote).
The Act was later signed into law by President William J. Clinton on December 3, 1999.
The Foreign Narcotics Kingpin Designation Act, better known as the Kingpin Act, is landmark federal legislation in the United States intended to address international narcotics trafficking by imposing United States sanctions on foreign persons and entities involved in the drug trade.
The Act allows the President of the United States and United States Secretary of the Treasury to publicly identify “significant foreign narcotics traffickers” and to freeze their assets.
The Act also prohibits any “United States person” from conducting business with any designated foreign narcotics traffickers, and provides for both civil penalties and criminal prosecution for violations.
The work of enforcing the Act has been delegated to the Treasury’s Office of Foreign Assets Control (OFAC), overseen by United States Congress and advised by several United States federal executive departments, the United States Intelligence Community, and federal law enforcement agencies.
The creation of the Kingpin Act followed President Bill Clinton’s use of Executive Order 12978 to target and isolate members of the Cali Cartel of Colombia beginning in 1995.
Paul Coverdell and Porter Goss championed the legislation with the support of Clinton in 1999.
Since then, the President and Treasury have invoked the Kingpin Act to target a variety of foreign drug trafficking organizations.
Legislative history
Before the Kingpin Act, President Bill Clinton invoked the National Emergencies Act and International Emergency Economic Powers Act through his Executive Order 12978 of 1995.
The Order targeted the leadership of the Cali Cartel, at the time the largest narcotrafficking organization in Colombia, by adding their names to the Treasury’s Specially Designated Nationals and Blocked Persons List.
A Treasury report to Congress reported the E.O. 12978 sanctions as successful, and that 40 cartel-related companies with estimated combined annual sales of over $200 million were either liquidated or in the process of liquidation.
Senator Paul Coverdell and Representative Porter Goss championed the legislation in Congress. It which was folded into the Intelligence Authorization Act for Fiscal Year 2000 through a joint conference.
Bill Clinton approved the final legislation with a signing statement:
“This Act contains a provision, known as the ‘‘Foreign Narcotics Kingpin Designation Act,’’ that establishes a global program targeting the activities of significant foreign narcotics traffickers and their organizations.
“The new Act provides a statutory framework for the President to institute sanctions against foreign drug kingpins when such sanctions are appropriate, with the objective of denying their businesses and agents access to the U.S. financial system and to the benefits of trade and transactions involving U.S. businesses and individuals.
“Working with other nations, I intend to use the tools in this provision to combat the national security threat posed to the United States by international drug trafficking.”
The first designation under the Kingpin Act was made on June 1, 2000.
This initial list included members of four Mexican cartels Jesús Amezcua Contreras and Luis Ignacio Amezcua Contreras (of the Colima Cartel), Benjamín Arellano Félix and Ramón Arellano Félix (of the Tijuana Cartel), Rafael Caro Quintero (of the Guadalajara Cartel); and Vicente Carrillo Fuentes (Juárez Cartel); two accused traffickers from the Golden Triangle, Wei Hsueh-kang and Chang Chi-fu; and Nigerian brothers Abeni O. Ogungbuyi and Oluwole A. Ogungbuyi.
The Kingpin Act legislation delegated rulemaking authority to the U.S. Department of the Treasury.
The Treasury’s adopted rules were first published in 65 FR 41336 as “Reporting and Procedures Regulations; Foreign Narcotics Kingpin Sanctions Regulations” on July 5, 2000.
Related Posts
As of February 2022, there have been 2,182 individuals and entities have been added to the Counter Narcotics Trafficking Sanctions list.
Provisions
The Kingpin Act contains details about how narcotics traffickers and their associates are identified and designated for sanctions; how property is blocked; enforcement against violations; and the ongoing review of the program.
Executive and legislative powers
The legislation provides that the President submit an annual report to the U.S. Congress to identify “the foreign persons that the President determines are appropriate for sanctions,” and to detail “the President’s intent to impose sanctions upon these significant foreign narcotics traffickers pursuant to this chapter.”
The names and much other information are released publicly and to several Congressional Committees. However, as much of the information used to justify targeting a significant foreign narcotics trafficker is Classified or Law Enforcement Sensitive a more detailed classified report is provided solely to the United States House Permanent Select Committee on Intelligence and United States Senate Select Committee on Intelligence.
Designation process
The Presidential report to Congress is the main means for designating a significant foreign narcotics traffickers are designated under authorities granted by 21 U.S.C. § 1904(b)(1).
Additionally, the United States Secretary of the Treasury may make “derivative designations” in consultation with the U.S. Attorney General, the U.S. Director of National Intelligence, the Director of the Federal Bureau of Investigation, the Administrator of Drug Enforcement, the U.S. Secretary of Defense, and the U.S. Secretary of State.
These include foreign persons (including corporate persons) found to be
- “materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of, the international narcotics trafficking activities of a significant foreign narcotics trafficker so identified in the report”
- “owned, controlled, or directed by, or acting for or on behalf of, a significant foreign narcotics trafficker”
- playing “a significant role in international narcotics trafficking.”
When announcing new or revised sanctions, Treasury Office of Foreign Assets Control has released network map illustrations detailing relationships between and among designated significant foreign narcotics traffickers and derivative designees in alleged drug trafficking organizations, e.g., the relationships of “Tier I” traffickers Benjamín Arellano Félix and Ramón Arellano Félix with “Tier II” subordinates and front companies within the Tijuana Cartel.
Blocking assets and prohibiting transactions
After the President or Treasury’s designation, the named person or entity is subjected to an asset freeze of “all such property and interests in property within the United States, or within the possession or control of any United States person.” There is also a reciprocal prohibition placed on all United States persons against any transaction with a person or entity designated under the Act.
For purposes of each of these measures, “United States person” is defined expansively and includes any United States citizen or national, permanent resident alien, an entity organized under the laws of the United States (including its foreign branches), or any person within the United States. As with many United States sanctions programs, the Kingpin Act imposes a set of requirements for those involved in international trade.
Regulations created under the Act elaborate on the scope of transactions prohibited and types of property affected.
Enforcement and penalties
The Kingpin Act forbids United States persons from activities that have “the effect of evading or avoiding, and any endeavor, attempt, or conspiracy to violate” prohibitions against transacting business with designated narco-traffickers.
Regulations further point to use of the statute against making false statements.
The Act provides for maximum criminal penalties for corporate officers can reach up to $5 million and 30 years’ imprisonment and for corporations up to $10 million.
Others may face fines pursuant to Title 18 U.S. Code and up to 10 years in prison.[21][4] A civil penalty of over $1.6 million per violation may also be assessed.
Regulations created under the Act detail a process by which the Director of OFAC may issue a “prepenalty notice” to a suspected violator detailing alleged conduct, allowing the suspected violator to respond and enter informal settlement.
Use of the act
Kingpin Act designations, 2000–2019
Every presidency since 2000 has made Kingpin Act designations, including Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joseph R. Biden.
The New York Times has said that the act has been used for the US to pursue dozens of criminal organizations involved in narcotics across the world.
It also wrote that, “The act allows the Treasury Department to freeze any assets of the cartels found in United States jurisdictions and to prosecute Americans who help the cartels handle their money.”
Civil penalties
In 2008, A.G. Edwards subsidiary A.G. Edwards and Sons voluntarily disclosed that it failed to block investment accounts and had processed transactions of accounts owned by narcotics traffickers. It settled by remitting $122,358.35.
On October 7, 2015, in a case concerning the Honduran Banco Continental, was the first time the act had been used against a bank outside the United States.
On July 27, 2016, the OFAC issued a Finding of Violation against BBVA USA for maintaining the accounts of two persons on OFAC’s List of Specially Designated Nationals and Blocked Persons.
The two persons are accused of money launderers for Rafael Caro Quintero, a DEA Most Wanted Fugitive.
In August 2016, AXA Equitable Life Insurance Company and Humana, Inc each received a Finding of Violation for failing to cease transacting business with three customers who were named under the Kingpin Act.
The products in question were health insurance policies. Neither company nor their subsidiaries were fined as they cooperated with the OFAC investigation.
Criminal cases
The criminal portion of the Kingpin Act is specific to U.S. persons. While there have been thousands of designated foreign traffickers under the Kingpin Act since 2000, there have been few prosecutions under the act itself.
In December 2020, Chief United States District Judge of the United States District Court for the District of Columbia Beryl A. Howell wrote in a Memorandum Opinion that “in the last five years, two individuals were convicted under 21 U.S.C. § 1904,” citing statistics received from the United States Sentencing Commission.
Since that Opinion, the Kingpin Act charge of “Engaging in Transactions and Dealings in Properties of a Designated Significant Foreign Narcotics Trafficker” has been employed twice against the Mexican-American relatives of high-profile Mexican cartel narco-traffickers.(Source: Wikipedia)
It, therefore, remains to be seen how the United States Government may deploy the Foreign Narcotics Kingpin Designation Act against Nigeria if Tinubu emerges the next president. Read more.
