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?

Share
Single Page

More from Ken Silverstein:

Commentary November 17, 2015, 6:41 pm

Shaky Foundations

The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.

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

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

September 2016

Tearing Up the Map

= Subscribers only.
Sign in here.
Subscribe here.

Land of Sod

= Subscribers only.
Sign in here.
Subscribe here.

Only an Apocalypse Can Save Us Now

= Subscribers only.
Sign in here.
Subscribe here.

The Watchmen

= Subscribers only.
Sign in here.
Subscribe here.

Acceptable Losses

= Subscribers only.
Sign in here.
Subscribe here.

Home

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
 
Andrew Cockburn on the Saudi slaughter in Yemen, Alan Jacobs on the disappearance of Christian intellectuals, a forum on a post-Obama foreign policy, a story by Alice McDermott, and more
Artwork by Ingo Günther
Article
Land of Sod·

= Subscribers only.
Sign in here.
Subscribe here.

Just a few short years ago, Yemen was judged to be among the poorest countries in the world, ranking 154th out of the 187 nations on the U.N.’s Human Development Index. One in every five Yemenis went hungry. Almost one in three was unemployed. Every year, 40,000 children died before their fifth birthday, and experts predicted the country would soon run out of water.

Photograph by Mike Slack
Article
The Watchmen·

= Subscribers only.
Sign in here.
Subscribe here.

Just a few short years ago, Yemen was judged to be among the poorest countries in the world, ranking 154th out of the 187 nations on the U.N.’s Human Development Index. One in every five Yemenis went hungry. Almost one in three was unemployed. Every year, 40,000 children died before their fifth birthday, and experts predicted the country would soon run out of water.

Illustration by John Ritter
Article
Acceptable Losses·

= Subscribers only.
Sign in here.
Subscribe here.

Just a few short years ago, Yemen was judged to be among the poorest countries in the world, ranking 154th out of the 187 nations on the U.N.’s Human Development Index. One in every five Yemenis went hungry. Almost one in three was unemployed. Every year, 40,000 children died before their fifth birthday, and experts predicted the country would soon run out of water.

Photograph by Alex Potter
Article
The Origins of Speech·

= Subscribers only.
Sign in here.
Subscribe here.

"To Chomsky...every child’s language organ could use the 'deep structure,' 'universal grammar,' and 'language acquisition device' he was born with to express what he had to say, no matter whether it came out of his mouth in English or Urdu or Nagamese."
Illustration (detail) by Darrel Rees. Source photograph © Miroslav Dakov/Alamy Live News

Chances that college students select as “most desirable‚” the same face chosen by the chickens:

49 in 50

Most of the United States’ 36,000 yearly bunk-bed injuries involve male victims.

In Italy, a legislator called for parents who feed their children vegan diets to be sentenced to up to six years in prison, and in Sweden, a woman attempted to vindicate her theft of six pairs of underwear by claiming she had severe diarrhea.

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

HARPER’S FINEST

Mississippi Drift

By

Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'

Subscribe Today