Corruption in Equatorial Guinea

Corruption in Equatorial Guinea is high by world standards and considered among the worst of any country on earth. It has been described as "an almost perfect kleptocracy" in which the scale of systemic corruption and the rulers' indifference towards the people's welfare place it at the bottom of every major governance indicator or ranking, below nations with similar per capita GDPs.

"Few countries symbolize oil-fuelled corruption and nepotism more than Equatorial Guinea," wrote Jan Mouawad in the New York Times in July 2009. Its corruption system, according to the Open Society Foundations (OSF), is "unparalleled in its brazenness." This government is controlled by a limited group of powerful individuals who divert most of the country's revenues into their own clandestine bank accounts in other nations. Equatorial Guinea’s corruption is so entrenched, scholar Geoffrey Wood has claimed, that it can be classified as a criminal state.

This situation is especially dramatic due in large part to the massive scale of the country's revenues from oil and other natural resources. The Guardian stated the "country is enormously wealthy, thanks to its vast oil reserves, but that wealth is concentrated in the hands of a tiny elite." Despite its GDP per capita of US$32,026 – which makes it richer than any other African country and places it above Spain, Portugal, and Russia – Equatorial Guinea is ranked 136 out of 187 countries in the Human Development Index measure of quality of life. While the people of Equatorial Guinea "should have the per capita wealth of Spain or Italy...they live in poverty worse than in Afghanistan or Chad," said Arvind Ganesan of Human Rights Watch in 2009, attributing this disparity to the government’s corruption, incompetence, and disregard of its own people's well-being. Indeed, most people in Equatorial Guinea remain in abject poverty, with no access to healthcare or education. Meanwhile, any criticism of the ruling class is non-existent due to the government's use of force and intimidation to silence opposition.

Sasha Lezhnev of Global Witness noted in 2008 that the government earns oil revenues in the billions yearly, while the population lives on less than US$1 a day. President Teodoro Obiang is said to have control over the oil reserves and the government, Ganesan claimd, and consequentially the country's immensely rich treasury is "a private cash machine for a few" rather than used for any public benefit. According to the Financial Times, "Foreign diplomats joke that Equatorial Guinea is no more than a secretive family business but one which, as a sovereign country, enjoys a seat at the UN." The nation is known among foreign businessmen as a poor environment for business and investments. The individual who has become most associated in the international media with the corruption of Equatorial Guinea's leaders is Teodorin Obiang, a son of the president whose lavish lifestyle in southern California, Paris, and elsewhere has made headlines and been the target of investigations by American and French authorities, among others.

Because of the staggeringly high levels of corruption, the country always ranks near the bottom of Transparency International’s (TI) Corruption Perception Index. In 2009, only seven countries were lower. It is the only nation in the world since 2008 to receive a score of 'zero' for budget transparency. In 2008, a U.S. State Department report indicated that officials in Equatorial Guinea "frequently engaged in corrupt practices with impunity." In 2014, the country received a score of zero on TI's "Open Budget Index." From 1996 to 2013, the Economic Intelligence Unit gave the country a score of 0.0 for "Control of Corruption." On the National Resource Governance Institute's Resource Governance Index, Equatorial Guinea received a "failing" score of 13/100, ranking 56th out of 58 countries. On Reporting Practices, it received a score of 14/100, for a rank of 55th.

In 2011, Freedom House put Equatorial Guinea in its "worst of the worst" category for governments that violate human rights and civil liberties, which also includes North Korea, Sudan, and Turkmenistan. In its 2014 world report, Human Rights Watch (HRW) stated: "Corruption, poverty, and repression continue to plague Equatorial Guinea.....Vast oil revenues fund lavish lifestyles for the small elite surrounding the president, while a large proportion of the population continues to live in poverty. Mismanagement of public funds and credible allegations of high-level corruption persist, as do other serious abuses, including arbitrary detention, secret detention, and unfair trials."

Corruption system

This corruption system has existed in more or less its present form since the early 1980s, when the government seized farmland on Bioko Island belonging mostly to Spanish and Portuguese owners and redistributed it to members of the Nguema/Mongomo group.

The Nguema/Mongomo group

Corruption in Equatorial Guinea is carried out via an elaborate system that is the exclusive province of President Obiang and his circle, known collectively as “the Nguema/Mongomo group.” The members of this group divert revenue from Equatorial Guinea's natural resources, including land and hydrocarbon, to their own private accounts.

Equatorial Guinea's corruption system has been called “a seamless and self-reinforcing web of political, economic, and legal power,” whereby the members of the Nguema/Mongomo group employ the power of the government to enrich themselves. Their increasing wealth enables them, in turn, to finance ever more efficiently “the machinery of political control that eliminates effective opposition through repression and/or bribery.” Meanwhile, the group's domination of the legal system enables them to make their misappropriate of wealth appear lawful.

Several sources indicate that there are serious tensions within the group, with considerable competition for power and favors.

Foreign bank accounts and shell companies

Between 1995 and 2004, much of the money extorted from the people of Equatorial Guinea by the Nguema/Mongomo group was deposited in Riggs Bank in Washington, D.C. According to Human Rights Watch, Riggs had been aware of the level of corruption and human rights concerns in the country.\

A 2004 U.S. Senate probe determined that Equatorial Guinea's oil-revenues account at Riggs Bank was controlled by three persons: President Obiang, Africa's longest-serving dictator; his son Gabriel Mbega Obiang Lima (who is Minister of Mines); and his nephew, Melchor Esono Edjo (who is Secretary of State for Treasury and Budget). Two signatures, the President's and that of either his son or nephew, were required to remove funds from the account. From 2000 to 2003, about $34 million was transferred from that account into foreign bank accounts held by shell corporations – for example, an account at Spain's Banco Santander owned by Kalunga S.A., a firm registered in Panama, and an account at HSBC Luxembourg owned by Apexside Trading Ltd. Probes by a Spanish NGO and by the Open Society Justice Initiative showed that millions of dollars from the Kalunga account were spent on properties in Spain purchased in the names of President Obiang and other high officials, former high officials, and Obianga relatives.

Later expropriations

Since then, the government has expropriated other valuable land, mostly the homes of poor or middle-class Equatoguineans. Thousands of people have been the victims of these seizures, for which very few of them are compensated and in response to which they have no legal recourse. Many of those who have protested these expropriations have been abused and intimidated by soldiers or police. Officially, these lands are seized for public purposes, but in fact they have ended up in the hands of members of the Nguema/Mongomo group, who have built homes or businesses on the properties. In 2003, for example, Le Temps (Geneva) reported on a village in which 75 people lived in “pathetic poverty,” having been uprooted by the regime from their homes, which had been used to construct a a methanol factory without compensation or apology. A 2013 Amnesty report stated that over 1,000 families in the country had been “forcibly evicted from their homes to make room for roads, up-market housing and hotels and shopping centers since 2003....Many of the houses demolished were solid structures in well-established neighborhoods and the vast majority of the occupants had title to the land. Despite promises of relocation for some of the victims, to date no one has been re-housed or compensated.”

Exploitation of natural resources

The 1990s saw the discovery of petroleum and gas in the waters off Equatorial Guinea. The “oil rush” began in 1995 when ExxonMobil began working the Zafiro field; shortly after, Hess and Marathon also began exploiting the nation's natural-gas reserves. By 2005, Equatorial Guinea was sub-Saharan Africa's third-largest oil producer, after Nigeria and Angola. Even as the oil and gas business has thrived, however, most Equatoguineans have continued to support themselves through subsistence farming and to live “almost entirely outside the monetary economy.” This is because government authorities have used their political power to limit participation in the exploitation of the country's natural resources to themselves and other members of the Nguema/Mongomo group, granting “licenses and other business opportunities” only to the chosen few. Agencies that provide jobs in these businesses are also owned by members of the group, and the granting of such jobs is also limited in a similar way.

Other forms of corruption

Other means by which members of Nguema/Mongomo group enrich themselves include “[s]ham or sweetheart 'co-investment'” deals with foreign companies; rigged government contracts; under-the-table “contributions” by foreign companies to top Nguema/Mongomo figures; and monopoly arrangements for Nguema/Mongomo enterprises involved in all aspects of the petroleum and gas business.

For example, a U.S. Senate probe noted that Mobil, in 1998-99, had sold a 15% stake in a joint business, Mobil Oil Guinea Ecuatorial (MOGE), to the Obiang-owned company Socio Abayak, S.A., for $2,300. By 2004, Abayak’s MOGE holdings were worth $645,000. ExxonMobil could not explain the sale to Senate investigators. Another firm, Marathon, has paid Obiang over $2 million for land. Amerada Hess paid government officials and their relatives nearly $1 million for building leases. Of 28 properties Hess leased in Equatorial Guinea, 18 were owned by Obiang family members and persons connected to the family. Representatives for both Hess and ExxonMobil told U.S. Senate investigators that they had purchased their security services in Equatorial Guinea, at non-negotiable prices, from Sociedad Nacional de Vigilancia (Sonavi), which is owned by Obiang's brother, Armengol Ondo Nguema, and which has a monopoly on security services in the country.

As of 2009, according to the U.S. State Department, most ministers in Equatorial Guinea “continued to moonlight and conduct businesses they conflated with their government responsibilities. For example, the minister of justice had his own private law firm, and the minister of transport and communications was director of the board and owned shares in the parastatal airline and the national telephone company….In October 2008 the government began disbursing funds for social projects under the social development fund (SDF), a mechanism developed jointly with a foreign donor designed to enhance the transparency of social spending in line with international development norms….One minister reportedly ignored the bids of companies responding to an open solicitation and selected a company he owned, although his company had not submitted a bid; the minister claimed his company was eligible to accept SDF money from the account he controlled.”

Members of the Nguema/Mongomo group

President Obiang

The President has been criticized as living a life of “[w]aste and ostentation.” He has six personal aircraft, homes in Cape Town, Paris, Madrid, Las Palmas and Maryland, bank accounts in umerous countries, including France and Switzerland. He bought a $2.6 million residence in Potomac, Maryland in 1999. A 2001 memorandum noted the sale by Obiang of two properties in Spain for $5 million, which was deposited in Riggs Bank.

Constancia Mangue

Obiang's “senior wife,” Constancia Mangue (he has five wives), who is considered First Lady, is Minister of Health and Social Action. Se bought her own $1.15 million residence in Potomac, Maryland, not to be confused with her husband's home in the same city. At one point, five accounts and three certificates of deposit at Riggs Bank were held in Constancia's name, and ExxonMobil made several payments into these accounts. Andrew P. Swiger of ExxonMobil told investigators that his firm co-owned the Obiang energy firm Abayak with Constancia, who, he said, received 15 percent of all revenue from Abayak.

A company called Nusiteles, G.E., founded in 2000 to provide domestic telephone and computer services, is partly owned by the Obiangs through Abayak, and partly owned by other high Equatoguinean officials. As of 2004, Abayak is the only construction company in all of Equatorial Guinea.

The President and First Lady also own two clinics called Virgen de Guadalupe, as came to light in January 2009 when a Paraguayan couple who had worked at the clinics were arrested in January 2009 for stealing 6.1 million euros in cash, jewelry, and other valuables.

In October 2013, according to a Spanish news source, Contancia Mangue and Cristina Lima, another of Obiang's wives, got into a heated argument over dinner with Obiang. Mangue accused Lima, who was described as the country's Second Lady, of doing nothing to help the country's women. In return Lima accused Mangue of looting the nation's wealth. Obiang reportedly intervened several times and told his wives to go to their own hometowns.

Gabriel Mbaga Obiang Lima

Another Obiang son, Gabriel (Gabi) Mbaga Obiang Lima, is the Minister of Mines, Industry, and Energy, and has the power to arrange oil concessions. Lima, whose mother is Obiang's second wife, Celestine Lima, has been called the “lord and master of Equatorial Guinea oil.” He controls the production of half a million barrels of oil per day and travels frequently to such countries as Angola, Malaysia, France, China, the United States, Canada, Brazil, Britain, Switzerland, and Trinidad and Tobago, where he has lucrative business partners and, in some cases, numbered bank accounts and/or safe-deposit boxes. A 2012 article in a Spanish news source lamented that the extensive media attention accorded to Teodorin's corruption had overshadowed the investigation by Spanish authorities of Gabi's money-laundering in Spain and his purchase of various properties in that country.

Candido Nsue Okomo

Until early 2015, Candido Nsue Okomo, the First Lady's brother, served as head of the state-owned oil company, GEPetrol. Foreign oil executives complained that Okomo made “outrageous demands” of them and hindered investments. The Netherlands-based Centre for Research on Multinational Corporations noted that “the president or his relatives have personal interests” in GEPetrol and that “Transparency International (TI) considers GEPetrol to be a highly intransparent company, giving GEPetrol a low score on its revenue transparency in a 2008 report.” Okomo is now Minister of Youth and Sports.

Ruslan Obiang

Ruslan Obiang, a son of the president, is Equatorial Guinea’s sports minister and president of a top soccer club, The Panthers. He has lived in Spain, where he encouraged firms to do business in his country. Several Spanish businessmen have complained about the consequences of these deals. One Spaniard who had paid $200,000 to secure a contract to build soccer stadiums described a system that involved bribes at every turn. After paying bribes for years, however, his deal eventually fell apart “because we didn’t want to pay any more money to Ruslan’s people. They just strangle you financially, and then when you’re finished, they look for somebody else. And they keep everything, all the money you have put into the country. In the end, when we stood up to them, they threatened to accuse us of rape and to send us to jail. They threatened us on several occasions, and we were genuinely afraid....The corruption is absolute and endemic; there is nobody you can turn to.” After the deal collapsed, one of his business partners was visited at his Portugal home “by two men in dark suits who sat outside his house in a car for several days, and then visited him at his offices to warn him against telling his story to the media or the authorities.” He concluded: “You sign a contract with the son of the president and you believe it is worth something. You have no idea what is going to happen to you. We had to flee the country. We were afraid for our lives.”

Ricardo Mangue Obama Nfubea

Ricardo Mangue Obama Nfubea became prime minister in 2006 and promised to fight corruption. But his purported efforts “had little discernible impact on government corruption.”

Emilio Oñebula

A foreign businessman complained that his difficulties with doing business in Equatorial Guinea only become worse when he was required to deal with Emilio Oñebula, a senior official in the Sports Ministry: “Everything is so easy that you fall for it. As long as you are paying them, they do not leave you alone for a moment. Initially I thought that this was just the way they did things, but I later realized that they are simply keeping an eye on you. If you went out alone, they got angry. We were watched the whole time.”

Teodorin Obiang

Teodoro Nguema Obiang, known as Teodorin, is the President's oldest son and was for many years the country's Minister of Forestry. He has been called “the world's richest minister of agriculture and forestry.” Through his solely owned firm Grupo Sofana and its affiliate Somagui Forestal, Teodorin owned, and may still own, “exclusive rights of exploiting and exporting timber in Equatorial Guinea.” Teodorin also owns the nation’s only TV station, as well as Radio Asonga, the nation’s main radio station. In May 2012, he was removed from the Ministry and given the title of second vice president, a position that is not mentioned in the nation's Contitution, and placed in charge of state security.

The heir apparent to the presidency, Teodorin has been described as “fantastically corrupt” and has been called “an unstable, reckless idiot” by a former U.S. intelligence official. His lifestyle, which has been characterized by Foreign Policy as a “surreal playboy life,” has been the focus of media attention around the world, making him the personification of the Obiang regime's corruption.

A 2009 New York Times article stated that U.S. officials believed that “most if not all” of Teodorin's assets derived “from corruption related to the extensive oil and gas reserves discovered more than a decade and a half ago off the coast of his tiny West African country.” Another source of Teodorin's wealth, according to the article, was a tax on timber, the payments of which were made directly to him. The Justice Department also suggested that Teodorin might be taking bribes or extortion payments from oil companies. Later investigations by the U.S. Senate and other bodies (see below) established many of the sources of his wealth and uncovered details of his personal expenditures.

Teodorin “shamelessly looted his government and shook down businesses in his country to support his lavish lifestyle, while many of his fellow citizens lived in extreme poverty,” said U.S. Assistant Attorney General Leslie Caldwell in 2014. Although Teodorin's annual salary was about $100,000, he had managed “through bribes, kickbacks, embezzlement, and extortion” to accumulate a fortune of over $300 million, including major U.S. assets owned and acquired through shell companies and third parties.

The U.S. Department of Justice has accused Teodorin of carrying out “corruption schemes” and charging businesses illegal commissions. It has further charged him with extorting France's Isoroy, Spain’s ABM, and Italy's Agroforestal. “He threatened timber companies, among them Isoroy and ABM, that refused to meet his payment demands,” according to the charge. One Spanish businessmen told El Pais in 2013 that he and his business partners had run several firms in Malabo and Bata between 2009 and 2011, and simply to meet with Teodorín at his house in Paris to make necessary arrangements required payment of a so-called “intentions royalty” of 40,000 to 100,000 euros. Also, the government compelled foreign businessmen to leave machinery behind when they were done with it so that the government could keep it. “If you don’t accept,” said the businessman, “you know that you will end up in the Black Beach prison.”

Another Spanish businessman, who supervised ABM’s operations in Equatorial Guinea from 1995 to 1997, said Teodorín “would call us to come to his office, which meant wearing a suit and tie. He would keep you waiting for five hours and then appear wearing shorts. He would then tell you how much he wanted you to pay him, and that you had a week to do so, saying: ‘If you don’t pay, we will confiscate the machinery and give your concession to the Chinese.’ We had to flee the country. He was demanding millions. The only ones who stayed were those who paid him.” Yet another Spanish firm, which was forced to work with a local company on whose board of directors Teodorin sat, “had to pay commissions at every stage of the way” and was confronted “with permits and other obstacles”; after the firm had filled a warehouse with timber, one member of the firm was arrested and imprisoned on trumped-up charges of rape, apparently a standard way of treating foreign businesspeople. “He caught malaria and had a fever....In return for being allowed to leave, he had to agree to leave all his money and the timber warehouse behind.”

As of March 2014, Roberto Berardi, an Italian businessman who partnered with Teodorin in a construction company, was serving a 28-month sentence in Bata prison after being found guilty on charges of misappropriation brought by Teodorin; Bernardi has said “he was unjustly jailed after he demanded explanations from Teodorin for their company, Eloba Construccion S.A., being named in the U.S. investigation against the vice-president.”

Activities in U.S.

In 1991, Teodorin, then 22, enrolled in an English language course at Pepperdine University in Malibu. Walter International, a U.S. energy firm with a stake in Equatorial Guinea’s offshore fields, agreed to pay his $3400 tuition and his living expenses. Teodorin rejected the dormitory and instead “shuttled between two off-campus residences: a rental home in Malibu and a suite at the Beverly Wilshire hotel. He rarely attended class, instead spending much of his time shopping in Beverly Hills. Teodorin dropped out of the program after five months; Walter International’s tab came to about $50,000.”