The Obiang Trial

KleptoCast: Listen to Casey Michel’s interview with Zorka Milin, Senior Legal Advisor at Global Witness, about the trial of Teodoro Nguema Obiang Mangue.

Thanks to Teodoro Nguema Obiang Mangue, the United States is missing Michael Jackson’s crystal-studded glove.

The glove, according to a recent article from The New York Times, “was spirited out of the United States, in defiance of an American court order” – one of the more curious developments surrounding the ongoing saga of Obiang, who, as the son Equatorial Guinea’s long-standing president, is both the glove’s owner and one of the most notorious alleged kleptocrats extant. The glove seems to have slipped through the cracks during a 2014 agreement Obiang reached with the U.S.’s Department of Justice. Via its Kleptocrat Asset Recovery Initiative, the DOJ managed to force Obiang to forfeit some $30 million worth of assets in 2014, including a Malibu mansion Obiang purchased via a U.S.-based shell company. As a statement from the DOJ noted, Obiang gained his assets – including some $315 million the DOJ estimated Obiang spent on properties and luxury items from 2004-11 – through “relentless embezzlement and extortion,” said then-assistant attorney general Leslie Caldwell.

But Obiang’s struggles didn’t end with a smuggled glove and a mansion foregone. Earlier this month, Obiang – currently Equatorial Guinea’s vice president – went on trial in Paris on counts of corruption and laundering over $100 million of state money. The trial presents an unparalleled opportunity to pull back the curtain on not only Equatorial Guinea’s domestic corruption, but how kleptocrats manipulate Western financial and legal systems to protect their own ill-gotten gains. While the trial has only just begun, it is already, as Transparency International wrote, “a historic event: the first time an accused kleptocrat who is still in power is being held accountable for his actions.”

Gutting Equatorial Guinea

 Prior to Obiang’s alleged pilfering, Equatorial Guinea had already suffered some of the most notorious leadership in sub-Saharan Africa over the past half-century. As a 2009 report from Global Witness related, the country’s first post-colonial leader, Francisco Macias Nguema – the self-tabbed “Sole Miracle of Equatorial Guinea” – oversaw a regime that led to the deaths of some 10 percent of the country’s total population. With Macias Nguema overthrown in 1979 by Teodoro Obiang, Teodorin’s father, the country lurched that much further into personalized dictatorship. If anything, Obiang’s reign quickly challenged Macias’s travesties; not only did the French Observatoire Geopolitique des Drogues categorize Equatorial Guinea as a “drug trafficking state,” but state radio claimed that President Obiang “can decide to kill without anyone calling him to account and without going to hell” because “he is in permanent contact with the Almighty.” Per Spain’s La Vanguardia newspaper, “Only someone suicidal would set up a business in Equatorial Guinea today, unless it was a funeral parlor.” Added Global Witness, “Some academics have even described the country as one of the few ‘criminal states’ in Africa.”

Equatorial Guinea’s isolationism gave way in the mid-1990s, with the discovery of massive oil wealth off the country’s coast. Over the next dozen years, Malabo’s hydrocarbon revenues grew by multiple orders of magnitude, with Equatorial Guinea soon boasting the highest GDP per capita in Africa.

However, as the younger Obiang’s proclivities would later illustrate, little of that wealth found its way toward the majority of the population. Despite a 2003 pledge from Obiang père – who is now the longest-serving president in the world – that Equatorial Guinea had “no poverty,” most Equatoguineans continue to subsist on less than a dollar per day. The country now boasts one of the lowest life expectancies in the world.

Despite the clear concerns about corruption, some U.S. banks proved more than willing to work with the Obiang family. These banks notably included Riggs Bank, which, as Global Witness detailed, collapsed in 2004 after a U.S. Senate investigation found the bank had “been holding accounts and facilitating money laundering” for the Obiang family. All told, the investigation found President Obiang controlled some $700 million, “deposited by American oil companies active in Equatorial Guinea, at Riggs Bank in Washington D.C.” Elsewhere, President Obiang had claimed that the state’s oil resources are a “state secret.”

Prodigal Son, Profligate Spending

 Where President Obiang’s estimated wealth remains astounding – he is wealthier than Queen Elizabeth II, for instance – his son’s outsized spending has been far more profligate, and far more noteworthy. Despite working with a salary topping out at $5,000 per year in the mid-2000s, Obiang fils managed to purchase the most luxuriant mansion in a Malibu neighborhood shared with Britney Spears and Mel Gibson, worth some $35 million. Obiang also purchased a private jet, and reportedly began construction on a 200-foot yacht, including a shark tank. All told, French prosecutors allege that Obiang pilfered some $115 million between 2004-11. A 2007 DOJ document also attached millions of dollars’ worth of sports cars to Obiang. As the document read, “[I]t is suspected that a large portion of Teodoro Nguema OBIANG’s assets have originated from extortion, theft of public funds, or other corrupt.”

In 2007, however, a pair of NGOs, as well as a number of Congolese citizens, filed a suit in France against President Obiang, alongside Gabonese and Congolese officials, for embezzlement of state funds. A few years later, in relation to the suit, French officials seized some $2 million of wine owned by the younger Obiang, as well as 11 of his luxury cars. In 2012, French judges formally issued an arrest warrant for the younger Obiang, “accusing him of misuse of public money and company assets, breach of trust and money laundering, the proceeds of which were used to buy French property,” reported The New York Times. Meanwhile, the younger Obiang was forced to reach a settlement with the U.S.’s DOJ, which assessed his wealth at over $300 million, including $70 million in American assets. In addition to forfeiting his Malibu mansion, Obiang lost six life-sized statues of Michael Jackson – and was forced to keep his jet from landing in any jurisdictions from which Washington might seize the aircraft. The U.S. will steward $10 million from the sale of Obiang’s assets, with $20 million allocated for a forthcoming charitable enterprise.

Trial Balloon

Now, Obiang’s trial in France now stands as a potential precedent for the global anti-kleptocracy regime. As Transparency International summed, “the French trial will provide the first official, public record of the full extent of grand corruption in Equatorial Guinea.” Not only has Obiang seen attempts at diplomatic immunity falter – providing kleptocrats elsewhere any kind of pause moving forward – but the trial, which brings criminal charges against Obiang, will provide that much further insight into Obiang’s methods for stashing his estimated wealth abroad.

Such methods include, of course, Western recognition, from both public and private sectors, of the massed corruption allegations swirling the entire Obiang family. Despite these allegations, the family still accessed numerous Western banks, and American oil majors paid little mind to corruption concerns around their investments in Equatorial Guinea. The U.S. federal government also continued to allow Obiang travel to the U.S. proper. (As one attorney specializing in money laundering and foreign corruption said in 2009 about Obiang’s travels to the U.S., “Where the hell is the U.S. government?”) Likewise, at least one U.S.-based shell company provided Obiang the tools necessary to purchase his Malibu mansion – roping in not only ongoing concerns about money laundering related to American real estate, but the U.S.’s burgeoning company formation industry.

Indeed, few actors involved the ongoing saga surrounding Obiang come out for the better. Aside from the U.S.’s Kleptocracy Asset Recovery Initiative and the French judicial system, Obiang has helped highlight the myriad shortcomings surrounding Western anti-kleptocracy efforts, from multiple failures of due diligence in the banking sector to the continued allowance of shell company formation in the U.S. to anyone who can provide funds.

Still, such failings should not obscure the importance of his ongoing trial. Wrote The Guardian’s Nick Cohen, “This is the first time the serving minister of a tyrant has been arraigned on corruption charges.” Finally, the Equatoguineans sloughing under the Obiang family’s rule may find some form of justice – or at least further insight into where the country’s oil wealth has gone. Regardless of the trial’s outcome, the allegations against, and methods utilized by, Obiang will be formally entered into the record. As Transparency International concluded, “This is a milestone in the history of the anti-corruption movement.”

Casey Michel is a researcher and journalist who has worked in the United States and former Soviet Union.