12 February 2017

Equatorial Guinea: New U.S. Secretary of State Linked to 'Petro-Kleptocrat' Obiang

Photo: Amnesty International
(file photo)
guest column

The recent hearing in the United States Senate over the confirmation of President Donald J. Trump's nomination of former oil company chief executive Rex Tillerson as secretary of state, was - as anticipated - saturated with hard-hitting questions about climate change and his cozy relationship with Russia's oligarchy.

But several senators also raised incisive questions about ExxonMobil's role in Equatorial Guinea, noting that Tillerson's company helped to sustain, enrich and embolden a dictator and the circle of family and sycophants who surround him. Tillerson feigned ignorance, danced around the questions, and even avoided mentioning the country by name.

"I have no direct knowledge of that," Tillerson replied to a question from Sen. Tim Kaine (D-Va.). To Sen. Jeff Merkley (D-Ore.), he claimed: "I'd have to review for my memory the circumstance you're talking about." Why would Tillerson dodge questions about a nation where, just two years ago, his company pompously celebrated its 1-billion-barrel-production threshold?

An inconvenient truth: Exxon enables kleptocracy in Equatorial Guinea.

In the 20 years after the 1991 oil discovery in Equatorial Guinea, the country's GDP grew from $130 million to $2.3 billion. This sudden growth was singularly fueled by the petroleum industry, with ExxonMobil drilling in the largest proven oil reserve.

Overnight, Equatorial Guinea went from a repressive, corrupt, poor and isolated nation to a filthy-rich -- but still tyrannical and obscure -- darling of the West.

Today, Equatorial Guinea has the highest GDP per capita of any sub-Saharan country, yet nearly two-thirds of the population lives in extreme poverty. Spending on health, education and other social sectors remains below the Central Africa regional average. Infant mortality rates rival those of Afghanistan.

Instead of benefiting the people, oil revenue is subsidizing the lavish lives of President Teodoro Obiang Nguema - in power since 1979, when he had the former president executed - and his extended family. This lifestyle includes huge mansions, yachts, sport cars and luxury goods around the world, as well as the vast trove of Michael Jackson memorabilia collected by Obiang's eldest son, the nation's vice president and heir apparent.

Remember the crystal-studded "Bad Tour" glove and the "Thriller" jacket? Both are now stashed in Equatorial Guinea. These goods are the subject of law enforcement investigations, legal indictment, trial and a settlement in several countries, including Spain, Switzerland, France and the United States [download PDF]. In Spain judges are looking at how millions of dollars deposited by Exxon and other oil companies at the now-defunct Riggs Bank were used to acquire villas, resorts, ships and other items for the benefit of the president of Equatorial Guinea and his cronies.

Corruption is not the only problem in Equatorial Guinea. Human rights violations are widespread. Many of my colleagues inside the country have been arbitrarily detained, unlawfully imprisoned and even tortured because of their human rights or pro-democracy work. This prolonged brutal repression by the Obiang regime would not be possible without the support of ExxonMobil.

In 1995, just as I left Equatorial Guinea to pursue an education in the United States, three critical events took place. First, the U.S. government closed its embassy, according to Human Rights Watch researchers, due in part to the record of "pervasive human rights abuses and endemic corruption."

Second, my country came close ousting Obiang, when a coalition of opposition parties achieved an unprecedented victory in the municipal and parliamentary elections.

Third, according Steve Coll's "Private Empire," ExxonMobil discovered that the 1.2-billon-barrel Zafiro oil field had production three times greater than Mobil's entire worldwide output of oil and gas at the time.

Nothing has been the same since.

The following year, in advance of the presidential election, ExxonMobil's petrodollars bankrolled the involvement of a U.S. lobbyist who helped legitimize a rigged contest in which Obiang claimed 97.8 percent of the vote from the same constituency that only months earlier had opted overwhelmingly for the opposition coalition. Nicholas Shaxson's "Poisoned Wells" recounts the participation of the ExxonMobil-funded Institute for Democratic Strategies, led by Bruce McColm, into the 1996 presidential election in my country.

ExxonMobil didn't limit itself to paying Obiang's government under the terms of its oil contract. The findings from a 2004 U.S. Senate probe into the role of Riggs Bank in facilitating money laundering show that in 1998 ExxonMobil directly partnered with Abayak, a company owned by Obiang, granting it a 15 percent share of ExxonMobil's profits in Equatorial Guinea.

The Senate's report conclusively documents that an ExxonMobil subsidiary then leased office space in the "Abayak Compound" from Obiang and his wife, Constancia Mangue. The lease, which in 2001 was at $175,500 per year, remains in place at a price that is likely to remain undisclosed absent another outside investigation.

The report further reveals that by 2004, Equatorial Guinea and senior government officials held more than 60 accounts at the Washington branch of the Riggs Bank, valued at up to $700 million. One of the largest accounts held payments from oil companies doing business in Equatorial Guinea, with the largest share coming from ExxonMobil. Meanwhile, millions of dollars were transferred from government holdings into accounts held by offshore companies that were tied to Obiang.

The list of ExxonMobil's ethically compromised payments used to prop up Equatorial Guinea's oppressive regime is long. According to the Senate report, the company's subsidiaries paid $45,020 to the agriculture minister, to lease a house for a company manager; $236,160 to a labor contracting agency owned by the interior minister; and $710,300 to a security service company owned by the president's brother. These payments proved a convenient way to avoid conflict with the U.S. Foreign Corrupt Practices laws but in fact ensured that the "right" people from the dictatorship were favorable to Exxon's activities in the country.

When a Senate committee asked ExxonMobil to list its payments to Equatoguinean officials and their family members, the company said it did not have a complete inventory and "would need additional time to research about 500 contracts." There is no evidence in the committee's exhaustive 1,500-plus-page report that such a list was ever produced.

In the wake of the Senate report, the Securities and Exchange Commission initiated an investigation of ExxonMobil and other U.S. oil companies for potential violations of the Foreign Corrupt Practices Act in Equatorial Guinea. I since learned through filings from Marathon to its shareholders that five years later, the SEC notified the companies that the commissioners "completed their investigation and did not intend to recommend any enforcement action in this matter."

But the dubious collaboration between government officials and ExxonMobil didn't end there. Under President George W. Bush, and following what Human Rights Watch calls "intensive lobbying from the US oil industry," the United States resumed diplomatic functions in Equatorial Guinea in 2003, at first using as its diplomatic mission an office inside the ExxonMobil compound.

In 2006, the U.S. government started renting a building from the minister of national security, an uncle of the president. Shortly thereafter, Secretary of State Condoleezza Rice welcomed Obiang to Washington. Although Obiang was one of the world's most brutal and corrupt dictators, Rice praised him for his welcoming treatment of U.S. oil companies while passing over his rampant human rights abuses, publicly declaring him a "good friend" of the United States.

For thousands of people in my country who have no access to clean running water, reliable electricity, adequate health clinics, schools for their children, or freedom of speech and assembly, ExxonMobil's engagement under Tillerson has emboldened a dictator, providing him with an economic lifeline to become the longest-ruling "elected" head of state in the world today.

Exxon's embrace of Obiang has been mutually beneficial. The energy company drills and exports oil while a despot consolidates and remains in power for nearly four decades - and, unlike his fellow citizens, is showered by enormous wealth, whose major provider is Exxon. This - a system in which corrupt and repressive government officials and their corporate partners have hijacked the governmental apparatus for the dual purpose of resource extraction and the enrichment and security of the government - is what I call a classic "petro-kleptocracy."

Yet Tillerson testified under oath that he has "no direct knowledge of that," and that he would "have to review for my memory the circumstance you're talking about."

Kaine asked Tillerson how will he "work with nations" that have suffered under the "resource curse," and how he intends to "make sure they respect human rights, the rule of law and our long-standing commitment to transparency and anti-corruption." Equatoguineans are asking ourselves the same questions.

How will Tillerson stand up against a brutal regime that continues to yield large dividends to his former company, now run by his understudy?

Can we expect him to be the first secretary of state to act upon Presidential Proclamation 7750, which stipulates the denial of visas to people "benefiting from corruption," including his long-standing business partner, Obiang? Can we expect Tillerson to openly call for democracy and human rights in Equatorial Guinea? I'm inclined to be skeptical.

Tutu Alicante is executive director of EG Justice, an NGO which works to promote human rights, the rule of law, transparency and civic participation to build a just Equatorial Guinea. This contribution, a version of which first appeared in the Washington Post, is re-published with the permission of the author.

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