Controversial Attorney-at-Law: AFC leader in conflict of interest as political role clashes with AMLCFT and Exxon’s anti-corruption policy

The content originally appeared on: INews Guyana
Nigel Hughes

Attorney-at-law Nigel Hughes is facing heat over his recent election as the new Leader of the minority parliamentary opposition party, the Alliance For Change (AFC), with criticisms mounting about possible conflict of interest between his political and professional careers.

On Saturday, Hughes, was victorious against his opponent, Sherod Duncan, to become the new AFC Leader.

However, days prior to the AFC’s National Conference, Hughes, who is a civil and criminal lawyer, admitted that United States oil giant, ExxonMobil, along with several other oil companies operating in Guyana, is a client of his law firm – Hughes, Fields & Stoby.

On Sunday, Hughes told online news agency, Demerara Waves Online, that he would not sever ties with his law firm even as he embarks on his political career that could potentially see him holding a post in government office.

“This issue really only arises if and when I become President or acquire a position of power because, then, I’m in a position to influence government policy, they can claim. Right now, I can’t influence the government and, therefore, it’s a theoretical conflict,” Hughes was quoted as saying in the Demerara Waves article.

During a recent appearance on a programme – Politics 101, the lawyer had hinted at the possibility of him running as a presidential candidate at future elections. According to Hughes, during Sunday’s interview with the online news agency, he would leave the law firm should he be elected as president.

“If I were ever elected President, I would have nothing to do with the firm. I wouldn’t be participating in their management or decision-making but until then,” he said to Demerara Waves.

According to the article, Hughes believes the best approach to separate law and politics is to avoid participating on behalf of any political decision-making, especially when it involves oil companies that are his clients. He even suggested the establishment of an oil and gas committee within the AFC as well as the appointment of non-party advisors ahead of next year’s polls to make all the policy decisions thus keeping him at arm’s length from the sector.

Politically Exposed PersonsAlready, there have been concerns expressed, including by political commentators from both the opposition and government sides, about Hughes’ conflict of interest with his political and professional careers.

In fact, Hughes’ statements on Sunday sparked a response from Vice President Dr Bharrat Jagdeo, who pointed to the potential risks that the new AFC Leader’s posture could bring.

“Nigel Hughes obviously did not read the definition of politically exposed persons in the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009,” Jagdeo, who is also the General Secretary of the ruling People’s Progressive Party stated.

In the Act, a ‘politically exposed person’ is described as “any individual who is or has been entrusted with prominent public functions on behalf of a state, including a head of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials, including family members or close associates of the politically exposed person whether that person is a resident in Guyana or not.”

The AMLCFT Act of 2009 creates, among other things, the obligation for reporting state entities to have appropriate risk management systems in place to determine whether a customer is a ‘Politically Exposed Persons’ (PEPs).

This provision stems from the Financial Action Task Force’s (FATF) recommendations which states that countries are required to implement legal, institutional and other measures aimed at detecting prominent public functionaries, who may attempt to use their positions of influence to hide illegally obtained funds or assets when conducting business transactions.

Exxon’s Anti-corruption policyExxonMobil’s Anti-Corruption Legal Compliance Guide applies equally to political candidates as it does to government officials, in accordance with the U.S. Foreign Corrupt Practices Act.

It states: “Foreign Officials: The term “foreign official” is broadly defined in the FCPA. It means any officer or employee of a non-U.S. government or of any department, agency, or instrumentality thereof, or of a designated public international organisation, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organisation.Public international organisations, for purposes of the FCPA, are designated from time to time by Executive Order of the President of the United States. The current list includes the United Nations, the World Bank, the International Monetary Fund, the International Red Cross, the World Trade Organisation, and many other organisations. Foreign officials include employees and representatives of non-U.S. government departments or agencies, whether in the executive, legislative, or judicial branch of a government, and whether at the national, state, or local level. Foreign officials also include officers and employees of companies under non-U.S. government ownership or control, such as national oil companies. The basic FCPA prohibitions also apply to any non-U.S. political party, party official, or candidate for political office.”

It was previously reported that Hughes’ law firm had represented ExxonMobil during its negotiations with the then Guyana Government – the A Partnership for National Unity/Alliance For Change (APNU/AFC) Coalition – on the controversial 2016 oil contract for the Stabroek Block.

Those negotiations, which started in early 2016, were led by then Natural Resources Minister, Raphael Trotman, who was also holding the post as AFC Leader.

There were claims of conflict of interests between Trotman and Hughes, who was the AFC’s Chairman at the time although he subsequently resigned in April 2016.

The 2016 Production Sharing Agreement (PSA) with Exxon has been heavily criticised with many experts highlighting that Guyana had been short-changed with sweeping benefits going to the US oil major and its partners. This has led to a push by some quarters for the lopsided PSA to be re-negotiated.

However, when asked about his stance on the re-negotiation of the controversial oil deal, Hughes said during the programme that he could not comment on this matter since Exxon was a client at his law firm.

In December 2018, when the no-confidence motion was passed in the National Assembly against the David Granger Administration, Hughes had sparked a contentious debate, exacerbated by legal and procedural challenges that had significantly delayed the country’s electoral process. Central to this debate was Hughes’ argument that, mathematically, one half of the House when divided stands at 32.5 members. “There is no such thing as a half member, so half of the House is 33 members…this is because you have to round up to identify half of the House,” he had said, mere days after the no-confidence motion was passed. Therefore, he posited that 34 is the majority of the 65-member House rather than 33.

The aftermath of the motion as a result of this argument had been marked by legal challenges, appeals, and judicial decisions that extended beyond the constitutionally-mandated three-month deadline. In June 2019, the Caribbean Court of Justice (CCJ) handed down its decision that 33, not 34, was the majority of the 65-member House.