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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?
More from Ken Silverstein:
Commentary — November 17, 2015, 6:41 pm
The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.
In Havana, the past year has been marked by a parade of bold-faced names from the north — John Kerry reopening the United States Embassy; Andrew Cuomo bringing a delegation of American business leaders; celebrities ranging from Joe Torre, traveling on behalf of Major League Baseball to oversee an exhibition game between the Tampa Bay Rays and the Cuban national team, to Jimmy Buffett, said to be considering opening one of his Margaritaville restaurants there. All this culminated with a three-day trip in March by Barack Obama, the first American president to visit Cuba since Calvin Coolidge in 1928. But to those who know the city well, perhaps nothing said as much about the transformation of political relations between the United States and Cuba that began in December 2014 as a concert in the Tribuna Antiimperialista.
Chances that a Republican man believes that “poor people have hard lives”:
A school in South Korea was planning to deploy a robot to protect students from unwanted seductions.
Nuremberg’s Neues Museum filed a criminal complaint against a 91-year-old woman who completed a crossword puzzle that was in fact a $116,000 piece of avant-garde Danish art.
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“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.'”