The owner of the estate at 3620 Sweetwater Mesa Road, which sits high above Malibu, California, called himself a prince, and he certainly lived like one. A long, tree-lined driveway runs from the estate’s main gate past a motor court with fountains and down to a fifteen-thousand-square-foot mansion that has eight bathrooms and an equal number of fireplaces. The grounds overlook the Pacific Ocean, complete with a swimming pool, a tennis court, and a four-hole golf course, spill across a hilltop lot so expansive that the household staff use golf carts to move about the property. Past and present residents of the neighborhood, called Serra Retreat, include Mel Gibson, Britney Spears, and Sylvester Stallone.
With a short, stocky build, slicked-back hair, and Coke-bottle glasses, the prince hardly presents an image of royal elegance. But his wardrobe was picked from the racks of Versace, Gucci, and Dolce & Gabbana, and he spared no expense on himself, from the $30 million in cash he paid for the estate to vast sums for household furnishings: a $59,850 rug, a $58,000 home theater, $1,734.17 for a pair of wineglasses. When the prince departed or arrived at his home—usually in the backseat of a chauffeur-driven Rolls-Royce or one of his other several dozen cars—his employees were instructed to stand in a receiving line to greet him.
The prince, though, was a phony, a descendant of rulers but not of royals. His full name was Teodoro Nguema Obiang Mangue—Teodorin to friends—and he is the son of the dictator of the West African nation of Equatorial Guinea. A postage stamp of a country with a population of a mere 650,000 souls, Equatorial Guinea would be of little international consequence if it didn’t have one thing: oil, and plenty of it. It is sub-Saharan Africa’s third-largest producer, after Nigeria and Angola, and pumps more than three hundred thousand barrels per day. American energy firms have collectively invested several billion dollars over the past fifteen years in Equatorial Guinea, which exports more of its crude to the US market than any other country.
Equatorial Guinea’s economy depends almost entirely on oil, which generated revenues in 2010 of well over $4 billion, giving it a per capita annual income of $37,900, on par with Belgium. “The oil has been for us like the manna that the Jews ate in the desert,” Teodorin’s father, President Teodoro Obiang Nguema Mbasogo, has said. It certainly has been for him. Obiang placed eighth on a 2006 list by Forbes of the world’s richest leaders, with a personal fortune estimated at that time of $600 million.1 His population hasn’t fared so well. Nearly four fifths of Equatorial Guinea’s people live in abject poverty, and one in three dies before age forty.
Obiang’s corruption is hardly unique among oil-rich dictators. French authorities uncovered thirty-nine properties in France and seventy French bank accounts held by the family of President Omar Bongo, who ruled Gabon for forty-one years until his death in 2009. (Soon thereafter, his son, Ali Bongo, took power.) Denis Sassou Nguesso, the leader of Congo-Brazzaville, bought a variety of French properties with tens of millions of dollars in oil revenues funneled out of his country. “All the leaders of the world have castles and palaces in France, whether they are from the Gulf, Europe, or Africa,” Sassou Nguesso said several years ago by way of explanation. In Central Asia, fantastically rich new oil-endowed ruling families have exploited energy wealth with great panache, too, from throwing birthday parties featuring Elton John to doling out luxury villas to friends and family.
But the scale of his regime’s looting appears to be approaching the sort of baroque levels reached before by historic crooks like Zairian dictator Mobutu Sese Seko, America’s closest friend in Africa during the Cold War, and Nigerian general Sani Abacha, who moved several billion dollars into Swiss accounts. “There are many reported instances where the African state has degenerated to a kleptocracy, characterized by the intense personalization of authority and the voraciousness of a small state elite and their core constituents,” writes Geoffrey Wood, a professor now at Warwick Business School.
The Equatoguinean state, however, is relatively distinct both on account of the extreme personalization of authority and the relationship between the government and a range of supporting legal, quasi-legal and criminal enterprises. Indeed, it is one of the few African countries that can be correctly classified as a criminal state.
Wood penned those lines in 2004; since then, corruption and criminalization have only worsened. Indeed, Equatorial Guinea is effectively a mafia state in which power and wealth are tightly controlled by a brutal gang family and a small number of cronies and enforcers. Gabriel Obiang, another of the president’s sons, is second in command of, but effectively runs, the ministry of mines and energy, which oversees the oil sector. Though he spent long stretches outside of his home country, Teodorin holds the ministry of forestry and environment, which oversees the timber trade, the nation’s only other notable export. The president’s wife, Constancia, is one of the most powerful people in the country, with economic stakes that range from real estate to construction. One of her brothers runs the state oil company while another is a former ambassador to the US and to Brazil, one of the clan’s favorite playgrounds to spend its ill-gotten loot. The president’s direct relatives hold the top positions at key state treasury agencies and across the national security establishment.
The clan’s ostentatious thievery has attracted the attention of investigators in multiple countries and three continents. A Spanish court is investigating a complaint charging that President Obiang and ten relatives and associates used $26.5 million in laundered money to buy houses and chalets in Madrid and the Canary Islands. In France, a police corruption inquiry uncovered tens of millions of dollars’ worth of assets belonging to the Obiang gang, including $6.3 million worth of luxury cars owned by Teodorin and a mansion on Avenue Foch, just off the Champs-Élysées, worth as much as $200 million. In October 2012 police raided the mansion and, according to a report in the Telegraph, carted off
two full lorry loads of belongings, including a Rodin statue, 10 Fabergé eggs, 300 bottles of Chateau Petrus wine worth 2.1 million euros and 18.5 million euros worth of art works bought from the 2009 sale of Yves Saint Laurent’s private collection.
The story said Teodorin’s estate included “a disco, cinema, steam baths, sauna, hair salon, gold- and jewel-encrusted taps, lift, and pink marble dining room with coral pillars and 20-yard glass table, all overlooking the Arc de Triomphe.” Soon afterward the French government issued an international arrest warrant for Teodorin.
In October 2011, the US government filed a civil asset forfeiture complaint seeking to take possession of tens of millions of dollars in assets held by Teodorin Obiang. The complaint, filed by the Justice Department and the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) arm, said that high officials in the Obiang regime had “gained enormous wealth” through methods that included “extortion and misappropriation, theft, and embezzlement of public funds.” It specifically alleged that Teodorin funneled more than $100 million into the United States through shell companies to buy his Malibu estate, plane, and Michael Jackson memorabilia. Investigators said that Teodorin supplemented his modest ministerial salary of about $6,800 per month—a figure they described, with some understatement, as being “inconsistent” with his level of spending—with a “revolutionary tax” on timber, which he demanded international logging firms pay to a forestry company he owned.
Obiang Sr. seized power in a 1979 coup and has made apparent his intent to hand over power to a chosen successor. He has sired an unknown number of children with multiple women, but Teodorin is his clear favorite and is being groomed to take over. That’s a scary prospect both for the long-suffering citizens of his country and for US foreign policy. As a former US intelligence official familiar with Teodorin put it to me, “He’s an unstable, reckless idiot.” He’s also fantastically corrupt. US investigators have documented how he runs the agriculture and forestry ministry like a business—earning him the nickname of the “Minister of Chopping Down Trees”—and operates several logging companies alongside the agency meant to regulate them.
Teodorin’s vast wealth has fueled a lavish and debauched lifestyle, which is detailed in a series of civil lawsuits filed against him by more than a dozen former employees at his Malibu estate. They claim they were cheated out of salaries, overtime wages, and work-related expenses for items ranging from gasoline to toilet paper, while being forced to support a tawdry setup straight out of the movie The Hangover. There were escort service girls, drug binges, Playboy bunnies, and even a tiger. “I never witnessed him perform anything that looked like work,” read a legal filing on behalf of Dragan Deletic, one of Teodorin’s former drivers. “His days consisted entirely of sleeping, shopping and partying.”
Kevin Fisher, a Los Angeles lawyer for Teodorin, dismissed the employees’ charges as “salacious,” “extreme,” and “unverified.” Yet after years of wrangling, Teodorin ended up settling most of the cases. The employees signed agreements that prevent them from speaking about Teodorin, but prior to that I read the case filings and interviewed a number of the plaintiffs and their attorney, Jim McDermott.
The 2011 asset forfeiture complaint marks a big step forward, but by the time it was filed—more than four years after the investigation began—Teodorin had transferred most of his assets out of the United States, beyond the reach of law enforcement. It would have been a simple matter to put a halt to his excesses years earlier. In 2004, President George W. Bush issued Proclamation 7750, which bars corrupt foreign officials from receiving US visas. Barack Obama, Bush’s successor, pledged that his administration would vigorously enforce 7750, saying, “No country is going to create wealth if its leaders exploit the economy to enrich themselves. We have a responsibility to support those who act responsibly and to isolate those who don’t.”2
Yet both the Bush and Obama administrations dallied for years while Teodorin flew in and out of the country unmolested and used the state of California as his personal shopping mall. And while Obama has been mildly cooler than Bush toward the government of Equatorial Guinea, he has said little publicly about its awful record of corruption and human rights violations and failed to impose sanctions against the state Teodorin is set to inherit. Why? It certainly appears to be the familiar story of the US government being unwilling to offend an important oil partner—the same coddling that has produced such stellar results in the past with Saudi Arabia and other energy-rich, democracy-poor Middle East allies. Or as McDermott, the plaintiffs’ attorney, put it, “In our system of international politics, there’s a lot of ass-kissing, especially if there’s oil involved.”
Just fifteen years ago, Equatorial Guinea was of little geopolitical interest to any nation other than its direct neighbors. Roughly the size of Maryland—the country is composed of a few islands and a square of land on the continent wedged between Gabon and Cameroon—it was one of the most isolated countries in the world, with much of the population engaged in subsistence farming of rice, yams, and bananas.
The political picture was equally grim. Francisco Macías Nguema, a West African version of Idi Amin, took power upon its independence in 1968. He soon banned opposition parties and appointed himself “president for life”—along with a number of other self-decreed titles that included the “implacable apostle of freedom” and “the sole miracle of Equatorial Guinea.” Macías sought to eliminate all of his enemies, both real and imagined, holding mass executions at the country’s major soccer stadium and crucifying (literally) political prisoners.
In 1979 the sole miracle was overthrown and subsequently executed by Obiang, his nephew. Obiang was no reformer. As head of the National Guard and later commander of the armed forces, he played a major role in carrying out the terrible repression of the Macías years, and was already skilled in the art of dictatorship after running Black Beach prison, a notorious torture chamber for political prisoners. “He presided over the killings of thousands of people,” says John Bennett, a former American ambassador to Equatorial Guinea. “He was the chief executioner.”
Over the past three decades, Obiang has been “elected” three times, most recently in 2009, when he won 95.4 percent of the vote (a record low; he peaked with 97.85 percent in 1996). The State Department’s 2011 global report on human rights in Equatorial Guinea says security forces “acted independently of civilian control” and were guilty of a long list of abuses, including unlawful killings, summary executions, torture, arbitrary arrest, and incommunicado detention. There is no independent radio or television in Equatorial Guinea. A few years ago an announcer on a state-owned radio station declared that President Obiang was “in permanent contact with the Almighty” and has the authority to “kill without anyone calling him to account.”
For years US officials looked upon the country as a laughingstock. Frank Ruddy, US ambassador to Equatorial Guinea during the Reagan years, tells the story of one of Obiang’s top aides, who was fortunate to benefit from diplomatic immunity, being stopped at New York’s JFK airport with a suitcase full of marijuana. The police had little trouble making the bust: The aide’s bag had a hole in the side, and he was trailing pot as he strolled through the terminal. (More seriously, there have been numerous credible allegations of international drug trafficking by regime members.)
There’s also a story that was widely circulated in CIA circles about how two of Obiang’s intelligence operatives came to Washington in the mid-1980s to meet top agency officials. The Equatoguinean went shopping at a suburban Virginia mall beforehand and came to the meeting dressed in identical outfits: black business suits and electric Nike sneakers.
US officials paid little interest to the country beyond periodically criticizing its poor record on political rights and democracy. Then, in 1994, John Bennett, the US ambassador based in Malabo at the time, was threatened with death after he called for improved human rights conditions. “You will go to America as a corpse,” he was warned in a message thrown from the window of a vehicle passing his residence—a vehicle that eyewitnesses said was driven by a government official. Two years later the Clinton administration shut down the American embassy in Malabo.
The move was barely noted and seemed of little concern. The country was a destitute pariah and seemed destined to fade into obscurity. But just a few weeks after the embassy closed its doors, US companies found significant petroleum reserves off the coast of Equatorial Guinea. Over the next few years firms such as ExxonMobil and Chevron, as well as independents such as Ocean Energy, Vanco, and Triton (all three later sold their stakes), collectively invested billions of dollars in Equatorial Guinea.
As US economic interests grew, a slow political shift in Washington–Malabo relations emerged. In June 2000, with American oil company executives starting to call Equatorial Guinea the “Kuwait of Africa,” the Overseas Private Investment Corporation, a US government agency, approved $173 million in loan guarantees to build an American-owned methanol plant there, at the time its largest program ever in sub-Saharan Africa. Later that year, Louisiana congressman William Jefferson led the first-ever congressional delegation to Equatorial Guinea, where he was greeted effusively by the government and given a key to the city of Malabo.3
A particularly marked improvement in relations occurred after George W. Bush took office in 2001. It surely helped Obiang’s cause that the companies active in Equatorial Guinea had close ties to the Bush administration and lobbied strongly on his behalf: In addition to well-known political powerhouses such as ExxonMobil and Chevron, there was Dallas-based Triton, whose chairman, Tom Hicks, made George W. Bush a millionaire fifteen times over when he bought the Texas Rangers in 1998, and whose leveraged buyout firm, Hicks Muse, was one of Bush’s largest career campaign financial patrons.4
In 2001, American oil companies retained lobbyist K. Riva Levinson to advocate for the reopening of the US Embassy in Malabo.5 In a memo to the Bush administration that argued the case, Levinson said, “Most of the oil and gas concessions awarded in Equatorial Guinea to date have been awarded to US firms. This is in stark contrast to neighboring countries in the region, where the United States has consistently lost out to…[European] competitors.”
In June of the next year Levinson helped arrange meetings for government officials at the Department of Energy. Two months later the two countries signed a memorandum of understanding that aimed to expand the US presence in Equatorial Guinea’s oil and gas sector.
In addition to direct lobbying, Obiang found help buffing his regime’s image from Bruce McColm, a former head of Freedom House who founded the Institute for Democratic Strategies (IDS), a Virginia-based nonprofit with a stated mission of “strengthening democratic institutions.” Virtually all of McColm’s funding came from oil companies or the Obiang government, and he tireless championed his patrons’ cause.
In 2000 McColm sent a team of observers to monitor Equatorial Guinea’s municipal elections, which it reported to be basically free and fair. “Electoral officials should be recognized for discharging their responsibilities in an effective and transparent manner,” said an IDS press release at the time. “Observers generally felt that the positives of this election far outweighed the negatives.” This was in marked contrast to a UN report that said the electoral campaign “was characterized by the omnipresence of the [ruling] party, voting in public, and the intimidating presence of the armed forces.”
The oil companies also worked through the Corporate Council on Africa, which represents companies with investments on the continent. In 2002, it sponsored a private luncheon for Obiang, who was visiting Washington with a small entourage. The event was held in the chandeliered dining room of downtown Washington’s Army-Navy Club, and each of the roughly fifty guests in attendance received a biography of Obiang prepared by McColm’s IDS that describes him as the country’s “first democratically elected president” and a man who has “embarked on the total physical reconstruction of his country and the improvement of the welfare of all its citizens.”
Sporting gold-rimmed glasses and dressed in a blue suit with American and Equatoguinean flag pins on the lapels, Obiang sat at the head table, where he was dwarfed by oilmen and State Department officials. During a lunch of fish stuffed with crabmeat and a custard tart with raspberry syrup, a procession of five corporate executives sought to outdo each other in heaping praise on Obiang and his nation. “It will be the Kuwait of Africa,” gushed one of the speakers, Gene Van Dyke of Vanco. “It’s a fabulous country.”
When it came time for him to speak, the guest of honor congratulated the American people for the great faith they displayed in the aftermath of September 11 and said that he too knew the importance of faith. “There was a time when we thought we didn’t have oil,” he said. “There was oil to the north, oil to the south, but none here. But I had faith—faith that Equatorial Guinea had oil.”
Political turmoil in the Middle East indirectly aided the oil industry’s overtures on Obiang’s behalf, as did Africa’s broader role as a growing oil exporter to the US. By 2000, the United States was already buying 15 percent of its oil imports from Africa, with Nigeria and Angola the two biggest individual suppliers and Equatorial Guinea poised to grow quickly. “Sub-Saharan Africa is an area of US vital interest, and is also of increasing strategic importance to the United States as it applies to American energy security needs,” Paul Michael Wihbey, then of the Institute for Advanced Strategic and Political Studies, told a congressional subcommittee in March of 2000.6 The September 11 attacks the following year led national security planners to call for greater diversification of imports away from the Middle East, especially toward non-OPEC suppliers in Africa and Central Asia.
This was also a theme emphasized by the industry itself in seeking to build support for new alliances with dodgy regimes like Equatorial Guinea. “This is one of the hottest spots in the world right now,” Jim Musselman, the head of Triton Energy, told me when I met him in Malabo in 2002. He was comfortably ensconced in one of the many government villas that the the government, already flush with oil revenues, had built for visiting foreign dignitaries and businessmen.
An affable, balding man who wore a blue dress shirt and cowboy boots embossed with his initials, Musselman described himself as “an unabashed fan” of Equatorial Guinea. “There is plenty of instability in the world, and the more diverse supplies of oil we have, the better off things are,” he told me. “Knock on wood, this country is stable and the president is sincerely trying to improve things. It’s not going to turn into suburban Washington, but it could be a model for this part of the world.”
In 2003, the oil industry and Obiang won their goal: The embassy in Malabo reopened—in a building owned by the minister of national security who is both a relative of Obiang’s and an accused torturer. Since then the US government has rarely criticized the Obiang regime other than for in the pro forma annual State Department human rights reports and milquetoast appeals for better behavior. In April 2006, then secretary of state Condoleezza Rice met with Obiang in Washington and called him a “good friend” of the United States. Three years later, a smiling President Obama posed for a photo with Obiang during a reception at the Metropolitan Museum of Art in New York, marking a minor PR coup for the regime. (This was just two months after Obiang had again won reelection via sham balloting.) “With the increased US investment presence, relations between the US and the Government of Equatorial Guinea have been characterized as positive and constructive,” the State Department says of ties between the two countries.
In the mid-1990s, President Obiang opened accounts at Riggs Bank in Washington DC. He claimed in documents filed with the bank that cocoa farming was the source of wealth. Riggs didn’t bother checking that assertion carefully, though it was supposed to do serious due diligence before opening an account for a politically exposed person, the term for a foreign national who holds a senior office.
In fact, there is no known record of Obiang having been a farmer or owning much land or wealth before he seized power. He simply swiped prime state cocoa farms—which Macías had nationalized after stealing them from Spanish landholders who fled following independence—and appropriated them for himself and his cronies.
In his book Tropical Gangsters, Robert Klitgaard—who lived in Equatorial Guinea in the 1980s as a World Bank official charged with reforming the economy—described a confidential trip report written by two members of an English cocoa firm that did extensive business in the country:
The document was amazing in frankness and detail. It referred to price fixing and other scams between exporters and importers, such as pretending that so much cocoa of such-and-such quality was shipped when actually the quality and quantity were much higher. It described bribes to several Equatoguinean ministers. Most remarkably, it detailed the company’s corrupt deals with President Obiang and his lawyer. Reading the document was like a kick in the gut. Even though I had written a book about Third World corruption, seldom had I seen such blatant, almost casual evidence of graft.
Klitgaard said that after the World Bank had approved a big cocoa project in late 1983, “top government officials had foreseen a gold mine.” Knowing that the bank would be giving credit to those with cocoa farms, they all rushed out—with a helping hand from the president—to obtain land. And so in 1984 the choicest cocoa farms were simply taken over by government ministers. Klitgaard wrote:
The Prime Minister had a beauty near Luba, and the President himself seized nearly four thousand acres near the Malabo airport. These new “farmers” went to [state banks] and demanded loans, and got them. Often the money they received was squandered on cars and video recorders, not on lime and copper sulfate for the cocoa trees. Inevitably, yields plummeted; when the ministers couldn’t repay their loans they simply defaulted.
Former ambassador Bennett told me that during his time in the country Obiang and family members “took a cut” on every import into and export out of the port, which the president ran as a private commercial enterprise. Still, during the early years of his rule, the national economy simply didn’t generate enough revenue to allow the Obiang clan to reach the big leagues of corruption.
The situation began to change in the early 1990s when Walter International, an independent Texas-based firm, began operating a small natural gas field in the country. Its entry into Equatorial Guinea was negotiated by then US ambassador Chester Norris, who maintained a friendly relationship with the Obiang regime. After retiring in 1991 he took a job as the personal representative of Walter International’s president. The Obiang government was so fond of Norris that it named a street for him in an exclusive suburb for foreign oil executives.
By the early 2000s, oil production was beginning to ramp up, and Equatorial Guinea had hundreds of millions of dollars, all of it deposited by American oil companies in an account at Riggs. Though a state account, it was effectively controlled by President Obiang. Riggs also opened up dozens of personal accounts for the president and his relatives, some of them offshore. These include a money market account that was set up for the president in the name of a Bahamas-registered corporation that received deposits of $11.5 million in cash between 2000 and 2002. Some of the deposits into the Riggs accounts were made by Equatoguinean officials walking in with as much as $1 million in shrink-wrapped bills. “Riggs … turned a blind eye to evidence suggesting the bank was handling the proceeds of foreign corruption, and allowed numerous suspicious transactions to take place without notifying law enforcement,” concluded a 2004 Senate investigation.7
Riggs assigned senior vice president Simon Kareri to the Obiang family as its private banker. As part of his duties, Kareri (now deceased) in 2000 assisted Obiang’s brother, Armengol Ondo Nguema, in buying a Virginia townhouse for $349,000 in cash. (Nguema still owns the townhouse, which is currently assessed at $608,000.) A State Department report on human rights violations in Equatorial Guinea the previous year said that Ondo Nguema, who at the time headed the country’s security apparatus, had directed his men to urinate on prisoners and slice their ears with knives and smear oil over their naked bodies to attract stinging ants. “Mr. Armengol Ondo Nguema is a valued customer of Riggs Bank,” Kareri wrote to the seller’s agent in the townhouse deal, in a letter that guaranteed that the security chieftain had sufficient funds to pay for the property. After he bought it, Riggs set up an account to pay the bills and taxes for his house. His four children, who attended schools in Virginia, lived at the property.
The Obiangs were demanding clients. “Teodorin called Simon all the time to say pay this or pay that,” said a source who knew Kareri well. “Once he was on a cruise ship with his latest girlfriend and called and said, ‘I’m tired of this bitch, send a helicopter and get her’.”
One Riggs document uncovered by the Senate identified a giant holding company owned by the president called Abayak, whose interests included real estate, cement, construction, oil and gas, and banking. The company was made a partner in various business projects set up by American energy firms and was “a significant earner of income for the president,” the document said.
Journalist Peter Maass asked a logical question when reporting a story for Mother Jones magazine: “What did Abayak offer its American partners other than the name and blessing of the president?” To find out he visited Abayak’s seven-story building, which he described as the biggest building in the country. When Maass got there he discovered that Abayak was no bustling enterprise but operated out of two rooms on the top floor. “If these were Abayak’s headquarters, they seemed unfathomably modest for a firm that had been selected as a partner by the largest oil companies in the world,” he wrote. A source told him that Abayak “functioned mainly as a vehicle through which payments were made in exchange for the president’s approval of business projects.”
The 2004 Senate report found that American oil companies were deeply in bed with the Obiang clan. Both ExxonMobil and Amerada Hess hired Sonavi, a private security firm headed by Ondo Nguema, the torturer. ExxonMobil leased land from Abayak, and Marathon Oil bought 625 acres of land from the president’s company. Amerada Hess paid government officials and their relatives more than $2 million to lease properties in Equatorial Guinea, of which about one-quarter went to a fourteen-year-old boy, a relative of Obiang’s.
Even worse were sweetheart business deals the oil companies handed to the dictator. ExxonMobil gave President Obiang a 15 percent stake in an oil trading business for a mere $2,300. Within six years his holding had increased in value by 280 times. Abayak received a combined stake, worth as much as $29 million, 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 received more than $1 million in dividend payments from the two ventures between 2002 and 2003 alone.8
To any lucid observer the oil companies had found creative if obvious means of bribing Obiang. But while the US government opened a Foreign Corrupt Practices Act investigation of five major companies doing business in Equatorial Guinea, it never brought charges against any of them.
The Senate report proved to be highly embarrassing to Equatorial Guinea and its American friends. At a hearing to which oil company executives were called to testify about the report, Senator Carl Levin told them, “I don’t see any fundamental difference between dealing with an Obiang and dealing with a Saddam Hussein.”
None of this altered the behavior of the Obiang regime. As more and more oil revenues flowed into the state treasury, the clan designed and refined a modus operandi that ensured that most of the money ended up directly in its pockets. For example, the president or his family is reliably reported to demand a stake in virtually any significant foreign investment project, generally through one of the corporate vehicles they control. “Obiang’s approval always incurs an equity holding in whatever company comes in,” a businessman who lived in Equatorial Guinea for ten years explained. “Say I bring company X to Equatorial Guinea and we get a road contract. We have to open a local operating company, called, say, XCO-EG. Then Abayak or another Obiang company takes a stake in that company.”
This person said that it was understood by all parties that “the president had to be a shareholder” in any large investment, and that there was not “a single major operation that Obiang is not involved in.”
Teodorin has freely admitted that as a cabinet minister he takes a significant cut of government contracts, an arrangement that is another core component of the clan MO. In a sworn affidavit filed with a court in South Africa, he stated:
Cabinet Ministers and public servants in Equatorial Guinea are by law allowed to own companies that, in consortium with a foreign company, can bid for government Contracts and should the company be successful, then what percentage of the total cost of the Contract the company gets, will depend on the terms negotiated between the parties. But, in any event, it means that a cabinet minister ends up with a sizeable part of the Contract price in his bank account.
For the Obiang regime, the state budget is essentially a funnel to move money into the hands of clan members, as seen in federal construction contracts. Cabinet officials who own private companies “divert government funds for their personal use by submitting inflated bids for government contracts,” the Justice Department reported. “Those companies are able to charge … fees that bear little, if any, rational relationship to the actual economic value of the services or products tendered.” Markups on such deals ranged as high as 500 percent.
Teodorin was appointed as minister in 1998, at the ripe old age of thirty. Five years later, his father awarded him a twenty-year concession to harvest timber from twenty-five thousand hectares of rain forest. (A Malaysian company did the actual logging.) The following year, Teodorin created a forestry company called Sofona, to which his father granted a five-year concession to harvest timber from an additional eleven thousand hectares. He soon created a second forestry company called Somagui Forestal, with this entire arrangment being roughly equivalent to the US defense secretary owning Lockheed Martin and Boeing.
Teodorin has claimed that his current wealth does not stem from corrupt activities but accrues from the profitable logging companies he operates in Equatorial Guinea. However, a local timber firm operator told the Justice Department that his companies “had no function other than to open bank accounts and receive illegal payments.”
Teodorin’s stewardship of his ministry has been disastrous for the country, both financially and environmentally. Logging in Equatorial Guinea has declined in recent years, which the government attributes to its conservation efforts. More impartial observers say this decline stems from the fact that there are simply not that many trees left: Teodorin’s ministry has facilitated the rapid depletion of forest resources in the country.
The Justice Department alleges that companies that bribed Teodorin—the precise sums required were “calculated by technicians” on his staff—could log wherever they liked, including in reserves allegedly protected under the country’s laws. Companies that refused to pay bribes got kicked out of the country and had their property and equipment stolen.
Teodorin told one senior executive of a foreign firm that he would “suffer” because of his refusal to make payoffs, according to the Justice Department. The unnamed executive was later arrested and jailed. When he was freed he left the country upon the advice of “an E.G. national familiar with [Teodorin]” who told him he should flee immediately “if he did not want his children in Europe to become orphans.”
According to a foreign timber executive who lived in Equatorial Guinea in the 1990s, Teodorin had acquired a notorious reputation among the country’s logging companies even before officially taking over as minister. He quickly earned the nickname “El Niño” from foreign timber executives, due to the storms that he would kick up when he flew back to Equatorial Guinea from lengthy vacations abroad. “He would call emergency meetings of all the logging company heads in which he would announce some new tax on logging operations,” the source said.
Teodorin slapped an extra “tax”—payable directly to him—on wood harvested from Equatorial Guinea. “Each company paid a royalty to the state treasury for each cubic meter of log shipped,” this person said. “This might be a hundred dollars per cubic meter. Above that, each company also had to pay an amount per cubic meter directly to Teodorin.”
The head of one Asia-based logging firm complained to this source that “keeping Teodorin happy” was costing serious amounts of money. Teodorin would allegedly contact the firm from Paris or the United States “and demand they immediately wire him fifty or a hundred thousand dollars.” A Spanish logging firm that had long operated in Equatorial Guinea got so fed up with paying bribes that it sold out. Even then the buyer of its concession was required to pay several million dollars to Teodorin to approve the transfer.
Teodorin maintains revenues collected by the forestry ministry at a private commercial bank in an account over which he has sole signatory power and exclusive control. No other government official, including the Parliament or ministry of finance, “possesses the authority or ability to supervise, regulate or inspect how funds in the account are used,” the Justice Department complaint says.
The Obiang clan’s extravagances are all the more galling because Equatorial Guinea’s natural resource wealth has led to few improvements for the country’s people. In fact, numerous social welfare indicators have gotten worse, not better, since oil money started flowing in. The infant mortality rate climbed from 103 per 1,000 live births in 1990 to 124 in 2007 while the under-five mortality rate climbed during the same period from 170 to 206 per 1,000 births. The proportion of one-year-old children immunized against measles declined from 88 percent in 1990 to 51 percent in 2007. Net enrollment in primary education fell from 96.7 percent in 1991 to 69.4 percent in 2007.
And yet even money specifically earmarked for social programs has been stolen. The Justice Department complaint says:
The Inner Circle routinely demands that companies operating in E.G. contribute money to what are disguised as public service campaigns [to build housing and other social programs. However] the contributions are not used for their alleged purpose, but instead are largely taken by members of the Inner Circle … for their personal benefit.
As recently as July 2011, Teodorin raised funds from foreign companies for a program to improve housing for the poor by changing palm roofs to zinc tile roofs. Coincidentally, he
possesses a substantial financial interest in the company that is responsible for distributing and supplying these zinc tiles…[and] donor contributions are not used for their alleged purpose, but instead are largely misappropriated by [Teodorin] for his personal benefit.
* * *
The Obiang MO has allowed for a staggering accumulation of wealth by the ruling family and party members. The president owns multiple homes around the world, including two mansions in Potomac, Maryland, which he bought for about $4 million in cash in 2000 and two properties in Las Palmas in the Canary Islands.
In 2011, Obiang added to his real estate collection by buying a $10 million beachfront apartment in Rio de Janeiro. That same year he attended the city’s famous Carnival celebration. According to an account in the local press, Obiang rented two floors at the Caesar Park Hotel in Ipanema and put up fifty guests. He also reportedly rented a double luxury suite to watch Rio’s samba schools parade during the celebration. The suite was covered in red silk and featured a giant portrait of the president. He and his wife watched the parade on a white leather couch while serving guests champagne in crystal glasses.
First Lady Constancia, who has financial interests in everything from construction to oil to forestry, is also a big spender. Back in 2001 Kareri of Riggs Bank raised the daily limit on her debit card to ten thousand dollars to accommodate her shopping plans when visiting the US. “The twenty-five-hundred-dollar limit is insufficient for her needs,” the banker wrote in a memo.
When it comes to Obiang family sleaze and corruption, though, Teodorin is indisputably Exhibit A. If by the standards of The Godfather films, President Obiang is Don Corleone, Teodorin is a combination of the brutal, violent Sonny and the drunken, skirt-chasing Fredo.
Despite his modest ministerial salary, the Justice Department found that Teodorin “spent more than $300 million acquiring assets and property on four continents between 2000 and 2011—North America, South America, Europe and Africa.” His holdings included his not only his Malibu and Paris estates and a $15 million property in São Paulo but millions of dollars worth of wine and paintings by Degas, Renoir, and Gauguin.
Perhaps his worst excesses took place in the Los Angeles area, where he’s been a regular since 1991, when at the age of twenty-three he arrived at Pepperdine University in Malibu to attend an English as a Second Language course. I visited Pepperdine—home of the Waves and featuring the Sandbar Student Lounge and the Oasis Snack Bar—in the summer of 2011. Students in shorts and flip-flops strolled among palm trees and manicured lawns. They threw Frisbees across a small field, worked on their tennis games, and swam between orange and blue lane dividers, the school colors, at one of the campus pools.
Pepperdine’s relaxed atmosphere must have been the ideal setting for young Teodorin. Walter International, the Texas firm that was the first to gain a stake in Equatorial Guinea’s offshore fields, financed Teodorin’s studies. Walter also agreed to pick up his living expenses, which proved to be a costly mistake. Teodorin’s tuition for the nondegree course was a mere thirty-four hundred dollars, including boarding at Pepperdine. However, Teodorin deemed campus dormitories unsuitable and shuttled between two off-campus residences: a home he rented in Malibu and a suite at the Beverly Wilshire Hotel. He rarely attended class, instead spending his days shopping in Beverly Hills. On the few occasions when he did come to campus he’d arrive in sports cars or limousines. Elisa Wax, director of the ESL course during that time, recalled Teodorin arriving at campus “He was there to party.”
Wax received a steady stream of phone calls from the hotel, as well as from shops in Beverly Hills, trying to track down Teodorin to settle outstanding bills. She would direct these calls to a representative at Walter International. The woman assigned by Walter to handle these complaints was “pulling out her hair,” Wax said. “There were people trying to locate him from all directions.”
Teodorin dropped out of the program after five months; Walter International’s tab for his expenses during that brief stay came to about fifty thousand dollars, according to former ambassador Bennett.
Teodorin traveled the world in subsequent years but returned frequently to the Los Angeles area. In 2001, he bought a $6.5 million home on Antelo Road in Bel Air, across from actress Farrah Fawcett. He never moved in, however, lamenting to a real estate agent that in retrospect the house was too contemporary for his taste.
Teodorin dreamed of being a hip-hop mogul, and for a time owned and operated a label whose name was derived from his initials: TNO Entertainment. TNO’s most significant project appears to have been a flop titled No Better Than This by Won-G—a fitting collaboration given that the rapper, whose real name is Wondge Bruny, has described his father as a former military official under “Baby Doc” Duvalier, the Haitian dictator deposed in 1986. (The CD included a song called “I Love TNO.”)
Teodorin continued to burn through cash during these years. He lived for a time at a Paris hotel off the Champs-Elysées; a French TV crew captured him on a shopping spree during which, it reported, he bought more than thirty suits in a single day. In 2004 he bought two estates worth a combined $7 million in Cape Town. But he and his family generally stayed off the radar screen in the United States until the Riggs scandal broke in 2004 and it became apparent just how much state revenue the family was siphoning off into its private bank accounts.
The following year Teodorin sought to open an account at Pacific Mercantile Bank, which utilized an internal system to rate the risk of doing business with new clients. A rating below nine suggested low or moderate risk, while a rating of nine or above constituted high risk. Teodorin was evaluated twice, coming in with scores of twenty-five and thirty-four. Pacific Mercantile took his money anyway, but many banks didn’t want to touch Teodorin’s cash.
Lesser kleptocrats might have turned tail and fled, but not Teodorin. To ensure adequate cash flow, he employed Michael Berger, a small-fry bankruptcy lawyer, and George Nagler, an accountant, to set up shell companies and associated bank accounts that he controlled but in which his name was hidden. The companies did no business but were merely vehicles for him to receive and spend funds wired from abroad.
E-mails obtained by the Senate revealed Berger to be an egregious sycophant. Teodorin hosted an annual party at his estate that he called the Nguema Summer Bash, which Berger attended in 2007. In an e-mail to Teodorin the next day the attorney wrote:
Thank you very much for inviting me to your party and for being so nice to me. The food was great, the drinks were better than great, the house, the view, the DJ, the white tiger were all SO COOL!
The following month Teodorin arranged for Berger to attend the Kandy Halloween Bash at the Playboy Mansion, which advertised “Body-Painted Models,” “Go-Go Dancers,” and “1,000 hand-picked Kandy Girls in the sexiest costumes.” This prompted another fawning e-mail from Berger to Teodorin.
I had an awesome time. I met many beautiful women, and I have the photos, e-mail addresses and phone numbers to prove it. If the word gets out that you are looking for a bride, women all over the world will go even more crazy for you.
He attached a photo of himself with several Kandy Girls, and wrote:
Here’s a sample of what your future may hold.9
In 2006, Teodorin used one of his shell companies, Sweetwater Malibu LLC, to purchase the Malibu estate. It is among the largest homes in Serra Retreat, a private neighborhood in which guards are posted round-the-clock at two entrances to keep out celebrity watchers and other uninvited visitors. I arranged to get a visitor’s pass by contacting a real estate broker and feigning interest as a potential buyer of a home for sale not far from Teodorin’s, and was waved through the main checkpoint. The road was lined with eucalyptus, palms, cactus, and bushes bursting with yellow and pink flowers, and climbed steeply up the hillside after passing Cross Creek Lane (“No one but celebrities lives there,” a local realtor who accompanied me said). There were no residents along the road, but we passed numerous work crews doing landscaping work along the route. I drove just past Teodorin’s house, which sits behind a high wall lined with security cameras, and parked along the roadside. His mansion was barely visible from the road, but the view of the Pacific was spectacular. The house sits directly above the Malibu pier, and the ocean was filled with swimmers and surfers. Anchored a few hundred feet offshore was a submarine-shaped superyacht owned by Russian billionaire Andrey Melnichenko, which had turned up a few days earlier and been the talk of Malibu. I could see Santa Monica through the haze and, farther out, a strip of land called the Queen’s Necklace, the farthest point south on the Palos Verdes Peninsula.
Benito Giacalone, one of Teodorin’s former drivers, is a tall, handsome man with a neatly trimmed goatee. He met me at a Starbucks in Beverly Hills, where he recounted his hiring in early 2009. “An employment agency called and told me that there was an African prince who needed a driver,” said Giacalone, who wore a gray pinstriped suit, with a pair of sunglasses hooked through the top button of a white shirt. “That seemed strange; I’ve worked with Middle Eastern royalty, and I was pretty sure there weren’t many princes from Africa.”
He drove to the mansion, where about ten other applicants had arrived before him and were queued up outside the main gate. Some eight hours later, by which time most of the candidates had tired of waiting and left, Sula Symonds—a model and aspiring actress who doubled as Teodorin’s estate manager and periodic girlfriend—interviewed Giacalone. He was called the following day and told to come to work immediately; his first assignment was to drive Teodorin to the airport in Van Nuys, where his jet was waiting to fly him to Equatorial Guinea. It was pouring rain, and as Giacalone waited for Teodorin at the wheel of a Maybach, one of dozens of sports cars owned by his new boss, he opened the glove box and saw the name on the registration. “I still didn’t know who he was until then, only that he was supposed to be a prince,” he said. “I did a Google search on my BlackBerry and found out who he really was. I knew I was in for a ride, but I really needed the job.”
When it came to spending habits, Teodorin wasn’t to be outdone by his Hollywood-star neighbors. He owned at least three dozen luxury cars, including seven Ferraris, five Bentleys, four Rolls-Royces, two Lamborghinis, two Mercedes-Benzes, two Porsches, two Maybachs, and an Aston Martin, with a combined insured value of around $10 million, according to the Senate investigation. There were far too many cars to keep at the estate, so Teodorin rented storage space in the garage of the Petersen Automotive Museum on Wilshire Boulevard and had his drivers fetch the one he wanted for an outing, a choice that sometimes depended on his attire. “I’m wearing blue shoes, so get me the blue Rolls today,” he once told Giacalone.
His favorite was a Bugatti Veyron, a car that can reach speeds of more than 250 miles per hour and sells new for about $2 million. One night, Teodorin parked his toy near the entrance of L’Ermitage, a favorite hangout where he’d gone for drinks. When he saw gawkers stop to admire it, he sent Giacalone back to Malibu by cab so Giacalone could drive back his second Bugatti to park next to it.
Teodorin’s household staff included drivers, housekeepers, caretakers, estate managers, executive assistants, chefs, landscaping crews, and two security teams staffed with off-duty and retired cops and guards from Equatorial Guinea. One security unit was based at the estate while a second, called the “chase team,” tailed Teodorin on his late-night excursions into Malibu and beyond. The chauffeur Dragan Deletic recounted in his legal complaint that the chase team found it nearly impossible to tail Teodorin when he took the wheel of one of his cars, because he ’d speed through red lights and generally drive like a maniac. “One night I was required to follow him in the chase vehicle from the House of Blues, where he became extremely intoxicated,” reads the complaint. “When I suggested he be driven home he refused and I was required to follow him [as he] swerved home up the Pacific Coast Highway.” Deletic alleged that his duties included “cleaning bottles of urine left in the back of the car by Obiang.”
Legal filings depict the “prince” as a nocturnal creature who generally slumbered until afternoon and sometimes as late as 9:00 P.M. Despite his Dracula-like aversion to daylight, employees were required to arrive at the estate by 9:00 A.M. Housekeeper Lily Panayotti’s complaint said that while her boss slept she ’d perform duties such as “cleaning and polishing the Property’s enormous collection of silver and crystal.” But she was not allowed to depart until Teodorin awoke and she’d cleaned his room, closet, and bathroom, which routinely required her to work until midnight. Panayotti said that she was allowed to use only one of the estate’s sixteen bathrooms, and that she was fed only beans, corn, and a mixture of potatoes with sausage.
Upon rising and freshening up, he might watch movies or play video games, browse through magazines, or spend time on Facebook. Teodorin enjoyed outings to the Magic Mountain amusement park, especially riding the roller coaster, but rarely stirred in time to go. He dated a series of women, among them the rapper Eve, whom he designated as president, treasurer, and chief financial officer of Sweet Pink, one of his shell companies. In 2005, Teodorin threw a party for Eve aboard the Tatoosh, a 303-foot yacht that he rented from its owner, Microsoft cofounder Paul Allen. An account in the New York Daily News said Eve ultimately cooled on Teodorin after hearing of rumors that his father was an accused cannibal who had eaten his political rivals.
Other companions included Tamala Jones, who appeared in such movies as Booty Call and Confessions of a Call Girl and later “starred in the ABC series Castle, and Lindsey Evans, who was named Miss Louisiana Teen USA in 2008, when she was eighteen (though she was soon stripped of her crown after she ran out on a $46.07 bill at a restaurant in her hometown of Blanchard) and Playmate of the Month in October 2009. Teodorin would drop off and pick up Evans at the Playboy Mansion, where he was a regular and she had a job as eye candy at parties.
Teodorin’s friends included Janet Jackson, a frequent visitor to the estate and occasional traveling companion. Her brother Jermaine was also an acquaintance. One well-placed source told me he turned up at the estate the day after the death of his brother Michael to borrow a Rolls-Royce Phantom to drive to the funeral.10
The guest list at Teodorin’s mansion invariably included an assortment of high-heeled, miniskirt-clad women procured from escort agencies, according to my interviews with former employees. Veronique Guillem’s complaint alleged that she had to “babysit” Teodorin’s hired companions to minimize “damage [to] the property,” which required her to “remain until early in the morning when they would leave.” Former driver Giacalone said in this legal filing that he was required to be “on call 24/7 to fulfill any bizarre whim [of] the billionaire playboy” and that his job included managing Obiang’s “various romantic interests, including booking their flights, managing conflicts, [and] taking them on elaborate shopping sprees.”
Rae Cortina, a former executive assistant, said in her legal complaint that Teodorin once left behind at the mansion an escort who demanded cab fare to go home. Cortina called him and he gave the okay but subsequently refused to reimburse her, saying that she had not “submitted a check request” prior to giving the women money to pay the cab. Cortina’s October 2010 complaint also charged that Teodorin had once called her to the foot of a staircase and stood above her wearing nothing but an open robe, one leg draped atop the banister. This was one of two times that Teodorin displayed “full frontal nudity” in her presence, the former assistant charges, prompting her to seek damages for “Intentional Infliction of Emotional Stress” on top of unpaid wages.
Charles Hagins, another former employee, was hired as estate manager but treated like a butler and go-fer, he told me during a conversation at the black-and-white marbled bar of the Beverly Wilshire Hotel. Hagins, who was then sixty (and died soon afterwards), had deep, watery blue eyes. Teodorin, he said, would call him at home in the middle of the night and demand that he bring him a bottle of wine or a hamburger from In-N-Out. “When someone comes through these gates, they’re in Equatorial Guinea,” Teodorin told him when he complained about the way he treated employees.
Giacalone’s unofficial duties included accompanying his boss’s girlfriends on elaborate shopping sprees. He also said the Dolce & Gabbana store on Rodeo Drive periodically dispatched a sales associate and tailor to Teodorin’s estate in a van packed with racks of merchandise for his viewing, and would close off its second-floor showroom when his girlfriends came in to shop. Giacalone said he escorted one who racked up about eighty thousand dollars in purchases, including bronze and red dresses that cost nearly seven thousand dollars apiece. Giacalone paid the tab from a Nike shoebox filled with shrink-wrapped bills.
For nights on the town, Teodorin and his crew rarely strayed beyond Beverly Hills or Hollywood. His favorite spots were Crustacean, where he’d order piles of crab and garlic noodles; Katana, where he’d spend thousands of dollars for sushi; and Hop Li, a restaurant on Santa Monica Boulevard whose shark fin soup he swore by as the best cure after binging. At L’Ermitage, the boutique hotel in Beverly Hills, he’d rent a suite for a few hours of partying or get a table at the ground-floor patio.
As with Pippi Longstocking and her bottomless chest of gold coins, Teodorin never ran short of cash. Thanks to his diplomatic passport, Teodorin routinely carried as much as $1 million in cash into the country, the ICE documents allege. Several ex-employees said he had a bag the size of a small suitcase that was forever stuffed with stacks of fresh one-hundred-dollar bills.
Teodorin traveled on a Gulfstream V, which he bought in 2006 through a British Virgin Islands–registered shell called Ebony Shine International, Ltd. “He used it like a taxi,” Giacalone said. “He’d fly alone or use it to pick up one passenger. Once he sent it from Rio to Los Angeles to bring back his barber.” And Teodorin didn’t travel light. He bought a fifteen-seat cargo van and had the seats taken out to fit his collection of Louis Vuitton luggage.
Records compiled by FlightAware, a firm that tracks private and commercial air traffic, show that Teodorin’s ministerial duties took him to such vital destinations as Las Vegas, where a July 2009 bill for the presidential suite at the Four Seasons—made out to “Prince Teodoro Nguema Obiang”—showed a rate of five thousand dollars per night; to Miami, where he docked one of his two Nor-Tech 5000 speedboats. During a trip to the latter on New Year’s Eve 2006, Teodorin and a young female escort stayed at the Delano Hotel on South Beach, where the bill came to $250,000, according to a confidential source with direct knowledge of the vacation. That included the rental of three beachfront cabanas and expenses run up by the eight guests he flew in from Los Angeles, including his hairdresser. For three days, Teodorin and his companions ordered a steady supply of Johnny Walker Blue and completely depleted the hotel’s supply of Dom Perignon Rose.
Teodorin’s international destinations included Monaco, Bermuda, Nice, the Dominican Republic, and Brazil, where he has attended numerous Carnival celebrations. In 2010, according to a story in the Brazilian press, he rented the best suite at a luxury hotel in Copacabana. “He spent heavily on Brazilian women,” the story said. “He burned through more than $100,000 reais [the equivalent of about $60,000 at the time] on presents.” The previous year, Teodorin leased a yacht for Carnival and invited dozens of people to join him in Rio.
His fall 2009 month-long jaunt to Maui stands out for debauched luxury. Teodorin flew on the Gulfstream V and chartered a separate plane for household employees that included Giacalone, a security team, and a chef. (He brought in his French chef from Paris as well.) He shipped four cars to Maui—a Bugatti, a Lamborghini, a Rolls-Royce Phantom Coupé, and a Ferrari—three motorcycles, and one of the Nor-Techs.
Teodorin lodged at the Grand Wailea Resort, paying seven thousand dollars a night for a suite there, and rented a beachfront estate through a firm called Tropical Villa Vacations, where he put up a revolving cast of escorts. “Most of them stayed for a few days and were replaced,” recalled Giacalone, who picked the women up from the airport and generally coordinated their comings and goings. “He’d tell me to get rid of that one and bring this one. Take this one to Louis Vuitton, but don’t let her spend more than five thousand dollars.”
Teodorin would often schedule an early morning meeting with Giacalone and lay out grand plans for the day—a helicopter ride or a beach outing or touring—but then he ’d go back to bed and sleep most of the day. There was one memorable outing, however. The gaudy orange, purple, and yellow Nor-Tech was shipped via Honolulu, where it fell off of a trailer and required repairs. It finally arrived in Maui during the last week of the trip, but the leaded fuel it required wasn’t sold on the island, so Giacalone arranged to fly in fuel at a cost of six hundred dollars per barrel, which took two more days to arrive.
A local man was hired to pilot the Nor-Tech, his major qualification being that he was willing to work for only $150 for the day. Teodorin took a few girls with him on the ride, but there was only enough fuel for a fifteen-minute outing. Shortly after the “captain” dropped off the passengers and went to moor the boat, Giacalone received a frantic phone call. “He [the captain] was desperate,” Giacalone said. “The boat was sinking.” It turned out that the repair work in Honolulu had been done improperly and there was a small hole in the side of the boat that caused it to capsize.
The incident attracted quite a bit of attention and was commented on by several posters at an online boating forum, thehulltruth.com. One wrote:
I still have not be able to confirm where the guy is from, but money is not a problem. Yesterday, when it was time to drive the boat, the prince showed up at the ramp in his Bugatti … Between the car, the boat, the royal aides (including four absolutely stunning foxes) with him, they were quite an image at the tiny ramp.
A special team had to be flown in from Honolulu to salvage the boat, an operation that required a helicopter and several trucks.
Total charges at the Grand Wailea topped three hundred thousand dollars. The bill for the rental property to house the girls came in at more than sixty thousand dollars.
Of all of Teodorin’s mad extravagances, though, nothing compares to his plans to build the world’s second-largest superyacht. Tim Heywood, one of the world’s most renowned yacht designers, completed the drawings for Project Zen, as it was dubbed, in late 2008. Teodorin selected Kusch Yachts to oversee construction (motto: “We don’t just build yachts that you use, we create a dream that you live”), which builds at a shipyard on the Elbe River in northern Germany.
The vessel’s basic design was completed in December 2009, and the original delivery date was set for three years later. Kusch employees who spoke to a Global Witness investigator said that Teodorin’s yacht was slated for 387 feet and would house a cinema, a restaurant, a bar, a swimming pool, and a $1.3 million security system complete with floor-motion sensors, photoelectric barriers, and fingerprint door openers. Its total contract price was approximately $380 million, which would have made it the world’s second most expensive yacht, behind Russian oligarch Roman Abramovich’s $1.2 billion Eclipse.
Teodorin’s superyacht was never delivered, possibly because news leaked about his plans in 2011. At the time, the Information and Press Bureau for Equatorial Guinea’s government said that if the order had gone ahead Teodorin “would have bought it with income from his private business activities and he would not in any case have bought it with funds derived from sources of illegal financing or corruption.”
America has been one long party for Teodorin, but the Justice Department lawsuit seeking to seize his American assets suggest his day of wine and roses might finally be coming to an end. The lawsuit (whose outcome is still undecided as of this writing) is an important test case, because the US has shown it can take action when it wants to shut down terrorist financing or starve regimes, such as Iran, of investment and trade, but it has done little to stop sitting dictators—especially oil-rich dictators—and their families from using America to stash their assets. Washington generally avoids the potential foreign policy fallout that comes from pressuring friendly states to clean up their acts on human rights and corruption. Yet when the Obiang lawsuit was filed, a top Justice Department official declared that “the United States will not be a hiding place for the ill-gotten riches of the world’s corrupt leaders.”
The Justice Department’s complaint is also a crucial test, because if the United States government can’t win a case involving the Obiang clan, it might as well stop trying to hold corrupt dictators accountable. The message to tyrants and oligarchs will be “Come here and spend without fear that we’ll confiscate any of your ill-gotten gains.”
Yet even if the Justice Department wins its case, the same legal loopholes Teodorin used to accumulate his fortune here remain open. And hence despots and crooks will continue to bring their money to America, not only for prestige, but also because our corporate secrecy laws, like those of Switzerland and Luxembourg, make it almost impossible for law enforcement agencies to figure out who has money sheltered here.
The primary legal shortcoming is that many jurisdictions—from the Cayman Islands to the great majority of American states—don’t require companies to disclose their true beneficial owners (as opposed to their registered owners, who serve as fronts). Dictators and despots can therefore easily hide their assets: Instead of buying property in their names, the mansion they want will instead be bought and owned by, for example, a Panamanian trust controlled by a Bahamian corporation that’s run by a company registered in Liechtenstein.
For years Senator Levin of Michigan has advocated reforms that would require companies registered in the United States to reveal their beneficial owners. The World Bank, which found that America is the top destination for corrupt politicians trying to set up shell companies to access the financial system, supports the same goals.
Yet Levin’s bill has gone nowhere, thanks to opposition from the United States Chamber of Commerce, the American Bar Association, and the state of Delaware, America’s premier tax haven, where corporations outnumber people. “You can no longer open an account at a respectable bank merely with a suitcase of cash,” the Economist has written in an editorial. “Let the same apply to starting a limited company.” As long as those loopholes remain open there is nothing to prevent future Teodorins from laundering their money in the United States and using the country as their personal shopping mall just as he has.
Even more troubling is that the Washington–Malabo oil alliance is likely to survive the Justice Department lawsuit no matter the outcome. US oil companies remain the bulwark of Equatorial Guinea’s economy, and President Obiang, while having expressed his annoyance with the Justice Department, shows no lessening of affection for them.
That means the US government may soon find that it needs to deal far more directly with Teodorin in the future. In a clear sign of his political ascendancy, his doting father named him vice president of the ruling party in 2011. Given the size of his country’s oil reserves, he’s going to have leverage—and cash—for a long time to come.
To ensure that Equatorial Guinea stays within the reasonable limits of Washington’s good graces, Obiang has hired reams of American lobbyists and PR specialists, retaining at various times a dozen different firms, including some of the Beltway’s most prominent hired guns and media polishers. Millions more have been spent by international oil companies lobbying for the Obiang regime. ExxonMobil spent more than $6 million on that task in 2008 alone.
Lobbyists who have been on the Obiang dole include a former special counsel to Bill Clinton, Lanny Davis (who also represented the 2009 Honduran coup plotters and the human-rights-abusing leader of Ivory Coast Laurent Gbagbo, who triggered a civil war by refusing to step down after losing the 2010 election there). In exchange for $1 million per year, Davis promised to “improve perceptions” of Equatorial Guinea with the American media and government. In his pitch to the dictator, he blamed the country’s negative image on “actions of the old regime,” this presumably a reference to the Macías government, which Obiang had toppled more than three decades earlier. Davis’s contract said he could offer “international monitoring and validation” for the presidential election of 2009, though that would be at an additional cost. It’s not clear if Davis followed through on his offer of electoral “validation,” but he told the New York Times of Obiang, “I’ve kidded him he’d do better to win by 51 percent than 98 percent.”11
The government’s most recent lobbyists include Qorvis Communications, which for fifteen thousand dollars per month provided “message development and refinement” and a “proactive media relations engagement strategy.” Among other things, that paid for a steady stream of news releases highlighting all manner of heartwarming news about Equatorial Guinea, from the Obiang government’s alleged support for animal conservation to native daughter Matinga Ragatz being named Michigan’s teacher of the year. Teodorin separately paid the firm $55,000 per month to help polish his image, lobbying disclosure reports say.
One summer evening I met two of Teodorin’s PR handlers from Qorvis, Matt J. Lauer and Seth Pietras, at a bar in Washington. The two men unknotted their ties in unison after slipping onto a couch and ordering drinks. Allegations of human rights abuses in Equatorial Guinea are highly exaggerated, they said, citing as evidence their experience during a trip to the country. “We could walk around at night and talk with people and no one interfered with us,” said Lauer. “No one is saying there are no problems, but it’s not North Korea.” They were similarly miffed about Teodorin’s reputation as a high-rolling kleptocrat, saying that officials from a number of energy-rich countries also live lavishly while their client was unfairly singled out. Pietras noted that George W. Bush had reportedly been a drinker and partier as a younger man before becoming more serious. Teodorin, he offered, “is at the point where he’s thinking about his legacy.”
If so, some serious soul-searching is in order—and not just by Teodorin.