Back in 2004, Senate investigators released a report showing that Teodoro Obiang Nguema Mbasogo, the kleptocrat who rules oil-rich Equatorial Guinea, had stashed vast sums of money at Riggs Bank in Washington, D.C. The report revealed that Riggs managed dozens of accounts holding upwards of $15 million that was available to Obiang, members of his family, and various government officials. One person with access to the accounts was Armengol Ondo Nguema, Obiang´s brother and the country´s feared security chieftain, whom State Department reports have accused of employing torture against political foes; another was the first lady of Equatorial Guinea, to whom Riggs granted a $10,000 daily credit card limit for her shopping needs. The Senate report also discovered accounts containing half a billion dollars of oil revenues paid to the Obiang regime by American firms, over which the dictator had de facto control.
Riggs, said the Senate report, had “turned a blind eye to evidence suggesting the bank was handling the proceeds of foreign corruption.” The bank was later hit with a $25-million fine over its handling of the Equatorial Guinea accounts, and Obiang was politely asked to take his money elsewhere.
All of this made Equatorial Guinea a pariah in American banking circles and I was told by multiple sources that a number of major financial institutions—including Citibank and Wachovia—subsequently refused to handle money from the country. As a result, the Obiang regime had to transfer much of its American-stashed loot abroad, apparently to European and South African banks.
But it seems that there´s no substitute for the convenience, prestige, and legitimacy offered by an American bank. So Obiang turned to the Bush Administration and well-connected Washington insiders for help. The United States has been cozying up to Obiang for years—the dictator met in Washington with Secretary of State Condoleezza Rice in April—because his country is a major oil provider, where ExxonMobil, Marathon, and Amerada Hess have billions of dollars invested.
I recently learned from a well-placed source that, earlier this year, Equatorial Guinea deposited monies at trouble-plagued Independence Federal Savings Bank. Independence opened the account only after it was approached by representatives of the State Department and told that Equatorial Guinea was a friend of the United States and that the bank´s help would be appreciated.
The State Department declined public comment for this story, but two government officials I spoke with confirmed that the Bush Administration had approached Independence on behalf of Equatorial Guinea. They said there was nothing unusual about the request and that the administration has also helped out other controversial African regimes that have had a hard time finding banking help after the Riggs scandal.
Equatorial Guinea´s embassy here and an Independence official confirmed that Obiang´s regime had opened the account, though both said it was strictly for embassy business. “We maintain a small account for the Embassy of Equatorial Guinea´s operational expenses,” said the bank official, who asked not to be identified. “As far as we know, it´s used for payroll and utility bills and other expenses of that nature. While we obviously won´t comment on the size of the account, it´s commensurate with the size of an embassy for a country like Equatorial Guinea. These types of accounts are standard, and all embassies must have an account like this to run day-to-day operations.”
My original source said he had no knowledge of how much money was currently in the account, but when he heard about the deal earlier this year, he learned that Equatorial Guinea was planning to make an initial deposit in the range of $6 to $8 million, and that its banking desires went beyond a simple embassy account. One of the government officials I spoke with acknowledged that, despite the Riggs scandal, Independence was free to expand its banking business with Obiang´s regime. Independence, he added, was hoping to handle a “total investment portfolio.”
Equatorial Guinea´s relationship with Riggs Bank, it is worth noting, began with the opening of an embassy account in 1996. The Senate report found that Riggs opened eight embassy accounts for Equatorial Guinea, and while most of these were apparently used to pay embassy bills, the Senate subcommittee “could not determine the purpose of several others.” The report also found that JPMorgan Chase had opened four accounts in the name of the “Permanent Mission of Equatorial Guinea.” It said one of the accounts had limited activity but “substantial funds, opening with $5 million and experiencing ten major withdrawals—one nearly $2 million—in less than a year.” In another case, the government of Equatorial Guinea made a “one-time deposit of $5 million that passed through the account in 24 hours.”
State Department approval notwithstanding, it would be no surprise if Equatorial Guinea´s political leaders abused their new banking arrangements, because Obiang and his cronies run their government as a criminal enterprise and make no distinction between the state treasury and their personal checking accounts. Obiang frequently visits the Washington area, where he owns two lavish properties that, I have been told, are looked after by embassy officials. During the Riggs scandal, Teodoro Biyogo, Obiang´s brother-in-law and Equatorial Guinea´s ambassador to the United States, was known for his lavish lifestyle. He drove around town in a Maybach, a sports car whose standard model starts at about $250,000. (I once saw Biyogo´s Maybach; it was not the standard model.)
Sources said that Cassidy & Associates, one of several big lobby shops retained by Obiang, provided help sorting out these banking issues. The lead lobbyist for Cassidy, which is being paid more than $1 million annually by Obiang, is Amos Hochstein, a former aide to retired Congressman Sam Gejdenson, a Connecticut Democrat.
Richard Burt, a former assistant secretary of state in the first Bush Administration, has also aided Obiang in financial matters. He registered as a lobbyist for Equatorial Guinea under the auspices of Farragut Advisors, a New York–based public-relations firm. (In his spare time, Burt is the executive chairman of Diligence, LLC, which is described on its website as “an intelligence gathering and risk management firm that helps its clients confront difficult business challenges.”)
Burt, sources told me, has been seeking—unsuccessfully so far—to help Equatorial Guinea set up an investment fund for its oil revenues. Government officials with whom I spoke said he had met with the State Department and other agencies on behalf of Equatorial Guinea, discussing not only the oil-revenue fund but also energy issues and Obiang´s visit to Washington last April.
Burt declined to comment, but I understand he has pitched the investment fund as something that will help the people of Equatorial Guinea. Not likely. A recent report by the London-based NGO Global Witness said that, thanks to oil exports, Equatorial Guinea has the second-highest per capita income in the world ($50,200)—yet it ranks near the bottom of the UN´s Human Development Index, with more than half of its people lacking access to potable water. Meanwhile, the report said, American oil companies still refuse to reveal how much money they pay to Obiang´s regime, and the I.M.F. has reported that his government holds more than $700 million worth of oil revenues in two offshore accounts.
An investment fund would allow Obiang to watch his money grow—and Burt would surely receive handsome fees for his services—but I wouldn´t bet on the citizens of Equatorial Guinea getting drinking water any time soon.
Fuente: Ken Silverstein.
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