Teodoro Nguema Obiang: Coming To America (to launder his millions?)

Game may be up for high-rolling son of Equatorial Guinea's President who lived his California dream

Los Angeles

Question: how did an African politician, on an official salary of roughly $6,000 a month, manage to acquire the lifestyle of a Hollywood billionaire, partying at the Playboy mansion, travelling in private jets, and living at a $30m Malibu mansion filled with impressionist artwork, and surrounded by its own private golf course?

Answer: simple. First, that politician was lucky enough to be Teodoro Nguema Obiang, heir apparent to the autocratic dictator of Equatorial Guinea, a tiny country in West Africa which since discovering huge oil reserves in the mid 1990s has acquired the dubious distinction of having one of the world’s most spectacularly-corrupt governments.

Secondly, Obiang was able to find a pair of high-flying Beverly Hills lawyers who – in exchange for extravagant fees - were prepared to set up an opaque string of shell companies that allowed him to secretly control dozens of US bank accounts through which tens of millions of his ill-gotten dollars could be laundered.

That, at least, is the claim made in an extraordinary 118-page lawsuit filed this week by the US Department of Justice (DOJ), which is attempting to persuade a judge to confiscate some of Obiang’s most treasured possessions, including his Malibu Home, his Ferrari car, and his collection of Michael Jackson memorabilia, which includes seven life-sized statues of the singer, along with a white cotton glove worn on his 1987 “Bad” tour.

The document sheds unprecedented detail on the alleged schemes by which Obiang used his role as Forestry Minister in his father’s government for personal enrichment. And it unpicks the dubious steps his lawyers then took to, in the words of the DOJ, “defraud” a string of US banks into providing a safe haven for that illegally-acquired wealth.

It also provides a year-by-year rundown on the hundreds of millions of dollars that Obiang frittered away on yachts, jewellery, fast cars, and real estate, while citizens of his country lived in abject poverty, without proper roads, and with intermittent electricity and running water. His personal spending, since 2000, has ranged from $7m to $88 million a year.

As recently as last year, when the US government launched a very public bid to claw back money laundered through its financial system by crooks and corrupt foreign politicians, Obiang was able to spend some $7,620,452 on himself. Purchases chronicled by the lawsuit include a $1.2m Piaget watch, a $532k Ferrari, and $494k on dozens of items of Jackson’s former belongings, which were sold at auction in California.

Between 2004 and 2011, his combined expenditures totalled $314m, the lawsuit claims. That’s more than four thousand times his official salary. “This document is a potential smoking gun, which suggests that systemic corruption has been occurring for nearly two decades,” said Joseph Kraus of EG Justice, an international human rights group which campaigns for reform in Equatorial Guinea.

“It details the names of companies that were allegedly asked to pay bribes or other illegal 'fees' for the right to do business in the country. And it implicates Teodorin [Mr Obiang’s nickname], who many believe is being groomed to succeed his father as president, in brazen corruption and money laundering schemes designed to finance an extravagant lifestyle.”

The legal complaint tells how Obiang’s father appointed him to his cabinet in 1998. He swiftly began forcing large timber companies – including ABM, Agroforestal and Isoroy - wishing to exploit the country’s publicly-owned forests, to pay millions of dollars in bribes and kickbacks, it claims. They were allegedly told to stump up fees to access forestry, fees to operate there, and fees to export their product. He personally received roughly ten percent of the value of wood harvested.

At one point, Obiang announced an overnight export “tax” of $27 per log, to be applied on every timber shipment out of the country. The money was paid directly into a private commercial bank account in Equatorial Guinea, which he had personal control over, the lawsuit alleges.

“Companies that refused to pay [him] were prevented from exporting their timber from the Port of Bata, where nearly all of Equatorial Guinea’s timber originated, and incurred additional expenses of up to $5,000 per day for any delays,” it reads.

Obiang also required oil and gas companies wishing to exploit Equatorial Guinea’s huge reserves – which, despite the impoverished existence of most inhabitants, have given it a per-capita GDP similar to that of Spain – to lavish gifts upon him. And he deliberately inflated construction contracts for personal enrichment, prosecutors say, making tens of millions more dollars. Enormous wealth was apparently nothing to Obiang without a Hollywood lifestyle, though. The document tells how he decided to move to the US, taking a place at Pepperdine, a private, Christian university in Malibu where tuition alone costs $40,000 per year.

A Houston-based oil company called Ocean Energy, which at the time was operating in Equatorial Guinea, agreed to pay his fees and living expenses. Paying bribes to foreign officials is strictly prohibited under US law. The company did not respond to inquiries from The Independent this week regarding the arrangement.

Over subsequent years, Obiang and his relatives were clients of Riggs Bank, a once-venerable institution in Washington DC. But in 2004, amid reports that the family had been allowed to deposit suitcases full of banknotes and wire $700 million dollars into accounts there, without proper oversight, Riggs was fined $15m, and agreed to pay a $25m civil penalty. It collapsed the following year.

At that point, Obiang enlisted the help of two Beverly Hills lawyers, Michael J Berger and George Nagler. Because US banks were no longer willing to open accounts in his real name, the attorneys set up dozens of shell companies to, in the words of prosecutors: “defraud US financial institutions regarding [Obiang’s] relationship to accounts opened.”

The attorneys quickly began to enjoy the trappings of their despotic client’s lifestyle. In a private email, Berger, whose Twitter feed proclaims him a “specialist in bankruptcy law and marathon runner,” thanked Obiang for inviting him to private party at which a live, white tiger was produced to entertain guests. “SO COOL!” he said.

In another e-mail, the bespectacled, middle aged attorney thanked Obiang for taking him to a bash at the Playboy Mansion where he got the “VIP treatment” and “met many beautiful women.”

Neither Berger nor Nagler were willing to discuss the DOJ lawsuit, or their work for the African dictator’s son this week. In a recent appearance before the US Senate, Berger refused to talk, pleading “the fifth” – an amendment to the US constitution which protects citizens against self incrimination.

Obiang has in the past denied all allegations of corruption, claiming his wealth instead comes from a successful business career. Quovis, a lobbying firm which represent him in the US, said that lawyers were still digesting the DOJ lawsuit, and would not yet be commenting.

Activists meanwhile hope that the case will persuade the US to tighten its anti-corruption laws. “Information raising grave concerns about corruption and Obiang has been public for years, and yet it was relatively straightforward for him to move his money into America,” said Robert Palmer, of the pressure group Global Witness. “Imagine what sort of corruption other politicians, who are more devious and intelligent, are able to get away with.”

News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
peopleReports that Brand could stand for Mayor on an 'anti-politics' ticket
News
The clocks go forward an hour at 1am on Sunday 30 March
news
Arts and Entertainment
The Doctor finds himself in a forest version of London in Doctor Who episode 'In the Forest of the Night'
TVReview: Is the Doctor ever going stop frowning? Apparently not.
News
Voluminous silk drawers were worn by Queen Victoria
newsThe silk underwear is part of a growing trade in celebrity smalls
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
footballMatch report: Real fight back to ruin Argentinian's debut
News
Candidates with surnames that start with an A have an electoral advantage
newsVoters are biased towards names with letters near start of alphabet
Arts and Entertainment
Isis with Lord Grantham (Hugh Bonneville)
TV
Arts and Entertainment
Jay James
TVReview: Performances were stale and cheesier than a chunk of Blue Stilton left out for a month
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Business Analyst - Surrey - Permanent - Up to £50k DOE

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***ASP.NET Developer - Cheshire - £35k - Permanent***

£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***Solutions Architect*** - Brighton - £40k - Permanent

£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?