Washington Babylon — August 4, 2008, 11:10 am

Will Bush Administration Let Oil Companies Skate on Money Paid to African Dictator?

Exxon Mobil is quietly commemorating the biggest operating profit in U.S. corporate history, announcing last week that it had earned $11.7 billion during the second quarter. Here’s something else that Exxon, and a number of other major energy firms, are surely commemorating: the apparent failure of the Bush Administration to hold them accountable for possible violations of the Foreign Corrupt Practices Act in Equatorial Guinea, even though Congress issued a detailed report more than four years ago that an elementary school student could have used as a roadmap for prosecution.

Back in July of 2004, the Senate Permanent Subcommittee on Investigations published a study that detailed the practices of seven oil companies in Equatorial Guinea, which has been ruled by dictator Teodoro Nguema Obiang since 1979. The report also looked at the role in the country of Riggs Bank (now PNC), which two months earlier had paid a $25 million fine for effectively helping Obiang and his family stash cash in accounts in Washington. Around this time the Securities and Exchange Commission (SEC) launched a probe of the oil companies, with particular scrutiny of Exxon, Marathon, and Amerada Hess.

Among the findings of the Senate, as reported in the Los Angeles Times (by me), were the following:

  • In 1998, Mobil (before its merger with Exxon) gave Obiang a stake in an oil trading business for a mere $2,300. Six years later, Obiang’s holding was valued at about $645,000.

  • Exxon and Amerada Hess paid about $1 million to Sonavi, a private security firm headed by Armengol Ondo Nguema, Obiang’s brother and the country’s security chief. (Incidentally, State Department reports have identified Nguema as a torturer.)

  • Amerada Hess paid government officials and their relatives more than $2 million for building and office leases. About a quarter of it was paid to Obiang’s 14-year-old son.

  • A holding company controlled by Obiang received a combined stake, worth as much as $29 million in 2004, in two joint ventures that Marathon inherited when it bought CMS Energy’s Equatorial Guinea holdings in 2002. Obiang’s holding company put no money down for its initial shares and had received more than $1 million in dividend payments from the two ventures between 2002 and 2003 alone.

One would think that the SEC would be able to make some headway with this assist from the Senate. At minimum, some creative accounting is needed to show why some of these deals, especially the joint investments with Obiang, do not constitute thinly disguised payments to the dictator.

Yet four years later it’s hard to spot any movement on the case. The SEC “can’t comment on ongoing investigations,” a Commission official told my colleague Sebastian Jones, though he did not make clear if in fact there were any ongoing investigations related to the case.

And an attorney who represented one oil company that had been under scrutiny, which he declined to name, told Jones: “The SEC essentially dropped [the company] out of the inquiry about three years ago.” The lawyer said that he hadn’t heard anything about the investigation recently, which suggested to him that it was no longer ongoing, though he was not certain of that.

If it has dropped the investigation, the Commission should at least acknowledge that and explain why. Or perhaps the SEC is simply sitting on the case and hoping no one notices that it’s doing nothing?

Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $39.99

United States Canada



October 2014

Cassandra Among the

= Subscribers only.
Sign in here.
Subscribe here.

“Today Is Better Than Tomorrow”

= Subscribers only.
Sign in here.
Subscribe here.

PBS Self-Destructs

= Subscribers only.
Sign in here.
Subscribe here.

The Monkey Did It

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content


Rebecca Solnit on silencing women, a Marine commander returns to Iraq, the decline of PBS, and more
Cassandra Among the Creeps·

= Subscribers only.
Sign in here.
Subscribe here.

On silencing women
“The old framework of feminine mendacity and murky-mindedness is still routinely trotted out, and we should learn to recognize it for what it is.”
Photograph © Sallie Dean Shatz
Ending College Sexual Assault·

= Subscribers only.
Sign in here.
Subscribe here.

“This is not a fable about a young woman whose dreams were dashed by a sexual predator. Maya’s narrative is one of institutional failure at a school desperately trying to adapt.”
Photograph © AP/Josh Reynolds
"Clothes are a bit like eating: you have to dress yourself. You have to eat, and even if you eat pizza all day long, that’s still a choice."
Photograph © G Powell
“Today Is Better Than Tomorrow”·

= Subscribers only.
Sign in here.
Subscribe here.

“Iraq has every disease there is; its mind is deranged with too many voices, its organs corrupted, its limbs only long enough to tear at its own body.”
Photograph by Benjamin Busch

Abortions per 1,000 live births in New York City:


Researchers discovered an “Obama effect”: African Americans’ performance on a verbal test improved, to equal that of white Americans, immediately after Obama’s nomination and his election.

“All I saw,” said a 12-year-old neighbor of visits to the man’s house, “was just cats in little diapers.”

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!


In Praise of Idleness


I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.

Subscribe Today