Teodoro Nguema Obiang, playboy son of the President of Equatorial Guinea, an oil-rich but dirt-poor enclave in West Africa, has bought a new $35 million dollar home in the USA, despite earning only US$5,000 a month as the country's Minister of Agriculture and Forestry.
On 27 February 2006 Sweetwater Malibu, LLC, managed by Teodoro N. Obiang, purchased a 16 acre property, comprising a 15,000 square foot house with ocean view, 4-hole golf course, tennis court, and swimming pool, according to property and company records obtained by Global Witness.1 The property was listed at US$35 million, though no sales price was recorded. According to the titling company and the Los Angeles County Assessor, the parties did not want the value made public.
Equatorial Guinea is one of the poorest and most repressive regimes in the world, despite earning around US$3 billion in oil revenues annually.2 On paper its half-million population enjoys the second highest per capita income in the world (US$50,200)3 yet the country still ranks at the bottom of the UN Human Development Index.4 Management of the country's vast oil wealth remains a ‘state secret' according to President Teodoro N. Obiang.
A U.S. Senate report in 2004 revealed that US$700 million of Equatorial Guinea's oil revenues were held in accounts at Riggs Bank in Washington, DC, which eventually led to Riggs' demise.5 After the Riggs scandal, the Equato-Guinean government promised more transparent management of public funds, including a pledge to implement the Extractive Industries Transparency Initiative (EITI). EITI is an international framework for disclosing payments from extractive sector companies and government receipts. One of its key criteria is that local civil society must have active oversight of revenues.6
However, the government has made almost no tangible progress on promised reforms. According to Sarah Wykes, Senior Campaigner at Global Witness, "US$718 million of Equatorial Guinea's oil money is still held offshore, according to the IMF.7 EITI has stalled in the face of persistent and serious violations of civil liberties."
Sworn testimony given recently by Teodoro Obiang, Jr. before a South African court sheds further light on a culture of institutionalised corruption. Testifying about the source of his wealth in a commercial case relating to the seizure of other luxury properties, Obiang stated that public officials in Equatorial Guinea are allowed to participate in joint ventures with foreign companies bidding for ¬government contracts and, if ¬successful, receive "a percentage of the total cost of the contract". He outlined that this means that "a cabinet minister ends up with a sizeable part of the contract price in his bank account."8
Global Witness Policy Adviser Sasha Lezhnev commented: "The U.S. government has just introduced a new initiative to fight kleptocracy, which includes entry bans and seizure of assets of corrupt foreign public officials. What steps will the administration now take in light of Mr. Obiang's recent Malibu purchase and his admission that he profited from his public office?"
For more information contact Sarah Wykes (+44 207 561 63 62 or +44 7703 108 449) or Sasha Lezhnev (+1 202 721 5634).
1. Global Witness investigates the links between the exploitation of natural resources and the funding of conflict and corruption. It is non-partisan in all its countries of operation. Global Witness was co-nominated for the 2003 Nobel Peace Prize for its leading work on ‘conflict diamonds' and awarded the Gleitsman Foundation prize for international activism in May 2005. The property and company records are available on our website here.
2. See IMF Republic of Equatorial Guinea Article IV Consultation, June 2006, p. 29, http://www.internationalmonetaryfund.com/external/pubs/cat/longres.cfm?sk=19366..
3. See CIA World Factbook: Equatorial Guinea, 2 November 2006, https://www.cia.gov/cia/publications/factbook/geos/ek.html
4. See UNDP Human Development Report 2005, p. 221, http://hdr.undp.org/reports/global/2005/
5. See U.S. Senate Permanent Subcommittee on Investigations Minority Staff Report, Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act; Case Study Involving Riggs Bank, 15 July 2004, http://www.senate.gov/~govt-aff/index.cfm?FuseAction=Hearings.Detail&HearingID=189.
6. For further information, see http://www.eitransparency.org/.
7. See IMF Republic of Equatorial Guinea Article IV Consultation, June 2006, p. 25, http://www.internationalmonetaryfund.com/external/pubs/cat/longres.cfm?sk=19366.
8. The relevant passage from the affidavit is available on our website here.