Riggs paid the largest-ever money-laundering fine, but the case was an even bigger embarrassment for Obiang and the major U.S. oil companies. The Senate report provided a rare, and strikingly clear, view of how a modern dictator manages his country's wealth. The findings: big payments by U.S. oil companies to E.G. officials, their family members, or entities controlled by them; $13 million in cash deposited into accounts controlled by Obiang and his wife, Constancia; funds moving from Riggs to the offshore accounts of various ministers as well as the president's wife; hundreds of thousands of dollars from oil giants such as Chevron and ExxonMobil for the tuition and living expenses of the kids of powerful E.G. officials; suitcases with $3 million in cash being carried into the bank's Dupont Circle branch; $445,800 in property-rental payments from Hess and its Triton Energy subsidiary to a 14-year-old son of Obiang's.
It was, former U.S. ambassador John Bennett later lamented to a British writer, "about as sad a commentary as one could imagine on U.S. business." The Senate determined that more than $35 million of foreign-oil revenue had been wired to two secret offshore companies, with a chunk of it going into an account controlled at least partly by Obiang. But the choicest moment came when Michigan senator Carl Levin chewed the head off of Riggs's CEO at a public hearing. "How do you live with yourself?" Levin asked. Then, turning to senior executives from Hess, ExxonMobil, and Marathon, he said: "I've got to tell you, I don't see any fundamental difference between dealing with an Obiang and dealing with a Saddam Hussein."
Western oilmen in E.G. are in agreement that the country's best hope is Gabriel Nguema Lima, Obiang's 36-year-old son, who picked up an economics degree in Dallas and who seems determined to try and move the country out of its terrifying time warp. They root for Gabriel -- today the most powerful official at the country's energy ministry -- to eventually take the throne. But they fear it might go instead to his older half-brother, Teodorin, Obiang's son from the first of two wives, who is widely regarded as a hot-tempered lightweight and believed to be his father's favorite.
Gabriel spent two years badgering his father's government to approve what is now called Luba Freeport, a magnificent new port for the oil industry. Hess, ExxonMobil, and Marathon among others, have established new tax-free logistical bases at Luba -- and Chinese companies may eventually move there too. A state within a state, Luba sits an hour's drive from Malabo's corrupt and congested older port, which the oil majors are now free to shun. Obiang's government holds a minority stake in the venture (with Gabriel representing it on the board), but the port is controlled and operated by Lonrho, a London-based public company. "It will become the Singapore of Africa," predicts Howard McDowall, the port's general manager. "There's no equivalent anywhere in West Africa." As Gabriel himself would later tell me, "Luba is the real Equatorial Guinea."
On the day I am to meet Gabriel, his tightly wound deputy, Juan Carlos Echuaca Paco, keeps me waiting for four hours -- on a flowery 1970s-style couch in an otherwise bare room without water or a bathroom. I watch Chinese businessmen with knapsacks come and go. I had been told earlier in the week that Obiang had once kept oilman John Hess waiting a full day, so I eventually locate Paco and tell him I have lost all interest in meeting Gabriel. As I walk briskly into the parking lot, he chases after me, dialing his cell phone. Within minutes, I am magically seated next to his boss. "You need to learn more patience," Paco sneers.
Gabriel begins by complaining that the foreign press has long given E.G. an unfair rap. "You were probably expecting our country was not secure, like the Congo, and that people would be following you," says the president's son. "One has to realize that Equatorial Guinea is not perfect. A lot has been done right, a lot wrong. The worst thing is only to concentrate on what's wrong."
Gabriel is a soft and likable guy; he is slight, with a goatee, thin glasses, and tender, princely fingers. While his dad shuts down traffic in the entire city every time his endless motorcade passes -- there are only two major streets in Malabo, after all -- Gabriel drives his own Mercedes. While his father utilizes a large force of Moroccan guards (he doesn't trust the locals), Gabriel insists on moving about town without security. But for all his down-home chumminess, a testiness rises when the questions get uncomfortable. When I mention with a smile that there is no press freedom in his country, he utters a short laugh before swiftly changing the topic.
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Recent Comments | Total
May 22, 2008 at 2:33am by j luther
A great case for the need of a transforming mode Western Capitalism
June 5, 2008 at 10:31pm by Yele Odofin
I would like to commend the journalistic efforts of this writer, whom I first saw on Lou Dobbs show. Most of Richard Behar's arguments were spot-on; however, these positions were understandably based on North American perception of Africa, as a homogeneous continent of beggars and "Have Nots". Having worked on development policy issues in Nigeria, as well as reviewed a significant number of other African nations’ foreign policies. I would like to stress some points Richard omitted in his piece.
Firstly, African countries have strategic needs and these needs vary quite significantly. There is a growing fear among most African political and academic elites that a strong economic ties with the West would come with a lot of unrealistic strings such as the imposition of liberal social issues all in the name of 'Human Rights', there is also a need to diversify economic, diplomatic and military interests. It’s a no brainier that make these countries less vulnerable to external influence and western sanctions most of these countries have learned from the Zimbabwe experience. Most African countries have actively pursued the so called "South- South" development partnership. Nigeria and other African states, in the last decade have seen a huge bi lateral trade boost with countries like Brazil, Russia, India, and countries in the Middle East.
The reason for the Chinese acceptance by African leaders has little to do with corruption as there are many havens in the Caribbean, some European Territories, South America and Middle East to launder such funds.
Finally, contrary to North American media and Hollywood’s exaggerated depiction of desperate living conditions in places like Western Sudan, Somalia, Liberia, Sierra Leone and some parts of Congo. I wish to state that as a result of institutional reforms in financial sector, communication and industries, Nigeria, Ghana, Botswana, Ethiopia and many more African countries have witnessed unprecedented increase of their respective middle class populations.
The Chinese are not exploiting Africans; they are simply filling a vacuum.
June 6, 2008 at 1:44pm by Afam Edozie
The United States and the West are no more special to Africa than any other country or group of countries that can provide markets for their goods, capital for their industry and expertise for their development. During the cold war the US understood this. For sure before the emergence of Asia the United States and the West had much more of these things than others and was therefore perceived as more important.
The great mistakes of US foreign policy (if I can call them mistakes) are that the US does not to have a strategy nor to have any 'real' values that they adhere to.
So they foreigners neither look up to them as a moral beacon, nor have they built in strategic advantages that will give them an edge in the future.
As a result the US lost the Shah's Iran and is loosing a host of other countries. And will likely loose much of Africa to China.
The Chinese also have no values worthy of emulation, but they do have an effective strategy.
Their strategy is to
i) use loss leaders (and leverage their low cost base) to get a foot hold into a country (foreigners bearing gifts policy),
ii) Ignore national politics (I see no evil policy),
iii) corrupt the locals (despite Nigeria's reputation as a den of corruption I know many people who don't take bribes, regardless the Chinese still try to bribe them and when they don't accept they try even harder, like they were told to do this in head office, and
iv) invade the country
I live in Nigeria and the Chinese are moving in here at an alarming rate, there are more Chinese living here than any other minority group and they are coming in at every level. Large, Medium and Small sized Chinese companies. As well as sole Chinese traders. They have factories in almost every corner of the country.
They go to the middle of no where, ask the locals for land to build a $10 million processing plant (or something) (why should anyone say no, no one else - not even our own govn - has come to do anything to provide us with jobs) and in any locality outside of the major cities even $1 million investment is a big deal. They then import hundreds of Chinese workers for every job except the most menial and go ahead to treat all their workers (Chinese and Nigerians) like slaves.
They do not transferring skills, they do not train, they do no even die (I kid you not, Chinese do not die in Nigeria), when one dies his death is kept secret, his body is shipped back to China in bulk using refrigerated containers and another Chinese comes to take his job.
The only part of their colonialisation strategy that is failing is that they are not allowed to marry local girls. But I think they have a shortage of girls of their own, so we see an increase in the number of 'secret' wives. How this one will pan out is anyone's guess. But I guess they will get shipped out and we will be left with lots of half Chinese babies.
Few policy makers in Africa understand the Chinese strategy and even fewer of them have the capability of doing anything about it. In 20 years, the Chinese will be a big minority in Africa, with significant participation in industry and economic life.
The west has not had a coherent strategy since neo-colonialism failed in the 70s. The US attempt to establish an African command is laughable and is seen across the whole of Africa as a desperate attempt to introduce a military strategy.
No doubt a charm offensive with promises of dollops of aid will eventually get them the base, and no doubt they will be able to establish a military presence through their planned deep water port in Sao Tome. But as you can see it does not stand up to the Chinese strategy which involves feet on the ground and involvement in the community.
June 9, 2008 at 10:19pm by Aliou Sylla
The US bet on Iraq has yet to bear real fruits whereare China's has paid off many folds. Go figure!