U.S. Oil Firms Entwined In Equatorial Guinea Deals - Riggs Probe

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."
more
http://www.washingtonpost.com/wp-dyn/articles/A1101-2004Sep6.html

Oil companies have a history of supplying cash and lavish gifts to leaders of countries whose oil reserves they want to exploit. Bribery of foreign officials was outlawed in 1977 under the U.S. Foreign Corrupt Practices Act, after SEC investigations led more than 400 U.S. companies to admit that they had made questionable or illegal payments in other countries. The act outlaws payments to foreign officials for the purpose of obtaining or keeping business.

Officials at the Justice Department and SEC, both of which are responsible for enforcing the act, could not provide statistics on the number of oil companies that have been accused of violations. A Justice Department spokesman said no officials wanted to discuss enforcement of the act. Paul R. Berger, associate director of the SEC's enforcement division , cited several cases in recent years that his agency had brought against oil companies, but he added that violations can be hard to discover and prove.

...

While oil revenue has filled government coffers, most of the citizens still survive on about $1 a day. Three of four residents suffer malnutrition, but only 1 percent of the budget was spent on health care between 1997 and 2002.

Obiang, his family and members of his government live lavishly. Obiang owns two houses in Potomac, valued at $1.3 million and $2.5 million, property records show. One of his sons, Teodoro Nguema Obiang, owns a $6.9 million house in Los Angeles.

...

"Where is this money coming from? Oil -- black gold -- Texas tea!" a Riggs executive vice president, Raymond M. Lund, gushed to colleagues in a 2001 e-mail.

September 7, 2004

By Paul Lashmar

In January the US's fourth-largest oil company, Marathon Oil, began expanding its extraction infrastructure in the west African state of Equatorial Guinea.

In one private deal Marathon delivered a cheque for more than $611 000 (R4 million) for the purchase of 50ha of convenient and virgin land in Punta Europa.

The cheque was made out to Teodoro Obiang Nguema, who happens to be the president and effective dictator of the oil-rich but poverty-stricken country.

Shortly afterwards, Houston-based Marathon agreed to buy an additional 208ha of Punta Europa land for a proposed liquefied natural gas plant. The price is $1.4 million and the deal is also being conducted through Abayak, a company controlled privately by Obiang, who seems to own huge tranches of key property in the country.
more
http://www.busrep.co.za/index.php?fArticleId=2214815&fSectionId=553&fSetId=304

Listed in the article as a "private company"....of course they have direct ties to Haliburton. Jeebus. There is no fighting the corruption of the admin. They are tied to everyone who is involved in oil/gas/energy. There are times when I am so overwhelmed by this crap. I can't believe they get away with it.

Source: Reuters

By Estelle Shirbon

MALABO, Sept 8 (Reuters) - Marisa knows she is living in Africa's new oil-rich Eldorado but that hasn't helped her find the cash to buy shoes for her six children.

Like many in Equatorial Guinea, a tiny central African backwater where large offshore deposits of crude have brought sudden wealth, Marisa is as poor as she was before the oil boom.

"My life hasn't changed," said the 41-year-old, who scrapes a living from selling dried fish by the side of the road on the outskirts of Malabo, the capital.

"I know there's a lot of money coming from oil but it doesn't come to people like us," she said, gesturing to three of her children who were playing barefoot in the dirt.
more
http://www.alertnet.org/thenews/newsdesk/L0620779.htm

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