Peter Maass has a fascinating article about Equatorial Guinea in the January/February 2005 Mother Jones. The story is about the dictatorship of Teodoro Obiang and the way he and his family have siphoned off much of the state's new oil wealth (oil was discovered in 1995):
In the past few years, Equatorial Guinea, population 500,000, has become the third-largest oil exporter in sub-Saharan Africa, after Nigeria and Angola. Per capita, it is one of the richest countries on the continent; rated by how much money ends up in the pockets of people not related to the president, it remains one of the poorest.Just another "ownership" society?
Actually, the US government and US-based transnationals have played an important role in developments in EG since 1995:
His conduct has been aided by American companies: As detailed in Senate and Treasury Department documents, Riggs Bank helped Obiang shuttle millions into offshore accounts. Oil companies, meanwhile, made payments to his regime that the Securities and Exchange Commission (SEC) is now scrutinizing under the Foreign Corrupt Practices Act.The president’s uncle, Jonathan Bush, is CEO of Riggs Bank investment arm.
Maass does a pretty good job explaining the seedy story, extensively relying upon a US Senate report:
Riggs also has a reputation for not asking too many questions. As the committee report notes, “Riggs has repeatedly been cited for having weak anti-money-laundering controls.” Indeed, the document went so far as to call the bank’s program “dysfunctional.” This certainly held true in Riggs’ treatment of Obiang’s money: “Riggs was fully aware of the corruption risks associated with the E.G. accounts,” Senate investigators reported, yet the bank “failed to exercise enhanced scrutiny of the account activity, even for transactions involving large cash deposits or international wire transfers.”Special scorn is reserved for the “investment accounts” which in 2003 were valued "between $300 million and $500 million."
Obiang’s relationship with Riggs began in 1995, and by 2003 his regime had become the bank’s single largest customer. In all, Riggs held more than 60 accounts belonging to Obiang, his government, and his ruling circle.
Hmmm, who is that investment CEO again?
Senator Carl Levin (D-MI) had a great line in the hearings on this topic (which featured oil company and Riggs execs):
Levin said in closing. “But I’ve got to tell you, I don’t see any fundamental difference between dealing with an Obiang and dealing with a Saddam Hussein.”The Securities Exchange Commission is investigating some of the charges reported by the US Senate investigation:
As the Senate report concluded, “Riggs Bank serviced the E.G. accounts with little or no attention to the bank’s anti-money-laundering obligations, turned a blind eye to evidence suggesting the bank was handling the proceeds of foreign corruption, and allowed numerous suspicious transactions to take place without notifying law enforcement.” Riggs officials declined to comment for this story.Half of those 60 bank accounts mentioned above belonged to members of the dictator's family or government (often the same).
The committee’s rebuke did not end with Riggs. “Oil companies operating in Equatorial Guinea,” Senate investigators wrote, “may have contributed to corrupt practices in that country by making substantial payments to, or entering into business ventures with, individual E.G. officials, their family members, or entities they control, with minimal public disclosure of their actions.”
I'm not sure how this story is going to end. After all, Margaret Thatcher's son Mark has recently admitted his involvement in an attempted coup in EG last year -- and the latest press reports suggest that coup backers were trying to gain US approval.
Keep an eye on this story.
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