U.S. Oil Firms Entwined In Equatorial Guinea Deals - Riggs Probe [View All]

Riggs Probe Led to SEC Inquiry on Corruption, Profiteering

By Justin Blum
Washington Post Staff Writer
Tuesday, September 7, 2004; Page E01

Soon after arriving in Equatorial Guinea in 1991, the U.S. ambassador discovered an unusual arrangement involving the country's despotic president and the first successful oil company operating in the poor, West African nation.

Walter International Inc. was paying to send the president's son to study at Pepperdine University in Malibu, Calif., company employees told the ambassador, John E. Bennett. The staff of the Houston company told Bennett about the arrangement, grousing that the son was "spending at will," bringing the tab for a year in Southern California to at least $50,000, the former ambassador said.

After Walter became successful with its business -- and government relations -- some of the biggest names in oil rushed to drill off the shore of a country the size of Maryland. They expanded on the type of arrangement Walter had with President Teodoro Obiang Nguema Mbasago, but on a much larger scale.

Their business activities provide a picture of how oil companies have operated in a developing country with a history of corruption. The companies paid for scholarships for children of the country's leaders, formed business ventures with government officials, hired companies linked to Obiang and rented property from government officials and their relatives, according to a U.S. Senate report released in July that reveals the companies' operations in striking detail. The report, which described the relationship between Riggs Bank of Washington and the oil firms operating in Equatorial Guinea, said the companies' actions raised "concerns related to corruption and profiteering."
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http://www.washingtonpost.com/wp-dyn/articles/A1101-2004Sep6.html