FINANCE Bloomberg Businessweek March 11, 201924
○ The biggest U.S. banks are closing more
locations in low-income areasWherethe
Branches
Aren’t
Aberdeen, Wash., is a far Northwestern outpost
of JPMorgan Chase & Co. with one lonely Chase
Bank branch. Now the bank is planning to depart
the rainy timber town that gave the world Kurt
Cobain. The next closest Chase branch is 40 miles
away. At the same time, parent company JPMorgan
plans to open 70 branches in the vicinity of the
other Washington—the nation’s wealthy capi-
tal. Among the new locations is one in suburban
McLean, Va., the 25th-richest town in the U.S.
These two different communities are part of the
same story. For years the nation’s largest banks have
been shrinking their large branch networks. They’ve
been cutting back faster in relatively poor neighbor-
hoods than in more affluent ones. JPMorgan and its
rivals say storefronts remain a critical part of their
growth. They say they’re committed to serving all
their customers regardless of income, a requirement
of the Community Reinvestment Act.THE BOTTOM LINE An arbitration judgment against Nigeria for
pulling out of an energy deal could be worth almost 2.5 percent of
the nation’s annual GDP.hydrocarbon byproducts, which themselves had
value, with the government getting a cut.
The company hoped it would make billions of
dollars from the arrangement while helping to pro-
vide Nigeria with much-needed power. Quinn, in
a statement before an arbitration panel, said he
thought the deal would have been “the high point
of my own career in Nigerian business.” He said
P&ID spent tens of millions of dollars on prepara-
tory work before winning the agreement.
But the project never got off the ground. In
May 2010, Yar’Adua, who’d been suffering from
pericarditis, died. The oil rigs couldn’t provide
the volume of natural gas promised in the agree-
ment, and, in any case, the government didn’t con-
struct the pipeline. After about two years of trying
to resolve its dispute with the government, P&ID
filed for arbitration in London, where the agree-
ment specified disputes would be handled. The
arbiters sided with P&ID.
The Nigerian government appealed the decision
in London, arguing that the petroleum ministry
didn’t have the authority to enter into the agree-
ment and the arbitration panel used the wrong legal
standard. The government lost there, though it also
turned to Nigeria’s court system, where it won.
Then the London arbiters came back with an
award amount. P&ID never broke ground on the
natural gas refinery, but said it spent about $40 mil-
lion in the planning stages. It calculated its damages
by estimating the profits it believed it would have
earned over 20 years had the project gone forward:
about $6 billion. Two of the three arbiters granted
the enormous award. The third also said there
should be damages, but set the level much lower.
At some point, the Cayman-based fund, VR
Advisory Services Ltd., bought 25 percent of P&ID,
according to public records. A P&ID spokeswoman
declined to comment on when VR bought its stake
or to identify the owner of Lismore Capital.
Last fall two firms registered with the U.S. Senate
to lobby Congress and the Trump administration on
behalf of the energy company. One of them, Kobre
& Kim, which also represents P&ID in the District
of Columbia courtroom, has a history of attempt-
ing to enforce judgments against foreign govern-
ments. The other, DCI Group, has made a specialty
of public-relations work for Wall Street companies
that attempt to use public pressure to make bets
pay off. DCI in January said it had made $80,000
in fees in the fourth quarter from P&ID and lob-
bied the U.S. Department of State. Black Diamond
Strategies LLC, which is stocked with conservative
lobbyists, has also disclosed that DCI hired it for lob-
bying work on P&ID’s behalf.The battle made headlines in Nigeria, where
President Muhammadu Buhari was campaign-
ing for a second term. (He won in February.) In
November, when Nigerian officials visited the U.K.
to pitch an offering of bonds, columnists there said
Nigeria had to pay P&ID if it hoped to raise money
from British investors. This prompted some in the
Nigerian press to accuse commentators of being
hired to attack Buhari. Cheta Nwanze, an analyst
at Lagos-based risk advisory firm SBM Intelligence,
says the government should have resolved the
dispute and moved on. He says the president’s
decision not to do so “has now caused a liability
far exceeding any the country has ever incurred.”
—Joe Light, with Elisha Bala-Gbogbo“Bank
branches
are a crucial
part of
financial
access”