Efforts against Equatorial Guinea official shows challenge of U.S. in foreign corruption cases

Equatorial Guinea President Teodoro Obiang Nguema Mbasogo stands during a wreath-laying ceremony at the Tomb of the Unknown Soldier in Moscow during his official visit to Russia. (NATALIA KOLESNIKOVA/AFP/GETTY IMAGES)

In the spring of 2001, Teodoro Nguema Obiang Mangue, at age 33, bought a $6.5 million house in the fashionable Los Angeles enclave of Bel Air.

About the same time, Nguema, the son of Equatorial Guinea dictator Teodoro Nguema Obiang Mbasogo, twice went to a Beverly Hills dealership and purchased two Bentley automobiles.

That was the beginning of a $10 million fleet of U.S. purchases that included eight Ferraris, seven Rolls-Royces, four Mercedes-Benzes, two Lamborghinis, a Porsche, an Aston Martin and a Maserati, the Justice Department said.

In 2005, he added two high-performance racing boats to his fleet for $2 million. In 2006, he bought a $38 million Gulfstream G-V jet and traded his Bel Air mansion for a luxurious villa overlooking the ocean in Malibu for $30 million. Last year, he decorated the mansion with fedoras, jewel-encrusted apparel and music-industry awards acquired during auctions of the belongings of the pop star Michael Jackson.

Nguema, the minister of forestry and agriculture of Equatorial Guinea, a poor African nation, made all of these purchases on an annual government salary of about $81,000.

This month — seven years after the Senate Permanent Subcommittee on Investigations exposed the Obiang family’s secret accounts at Riggs Bank in Washington and five years after nonprofit Global Witness discovered his Malibu mansion purchase — the Justice Department went to court to seize $70 million of Nguema’s assets.

U.S. government lawyers said his wealth was “inconsistent with his salary” and the purchases were the result of plundering the nation’s natural gas and oil reserves.

His spokesman, Greg Lagana of Qorvis Communications in Washington, said Nguema and Equatorial Guinea’s government “are deeply concerned” about the U.S. action. Nguema’s purchases, Lagana added, involved “no wrongdoing.”

The case has some anti-kleptocracy campaigners asking: If Nguema’s spree was so ostentatious and obviously based upon “extortion, misappropriation, embezzlement, or theft of public funds,” as the government alleges, then why did it take so long to file the case?

And what does it mean in the search for the assets of other dictators?

“This is positive, but is it going to take five years to recover any of the other dictators’ assets?” asked Robert Palmer, a campaigner for Global Witness, which lobbied for action against the Obiangs.

The United States has weathered criticism for the pace of its search for assets belonging to the families of the deposed dictators of the Arab Spring, such as Egypt’s Hosni Mubarak and Tunisia’s Zine el-Abidine Ben Ali.

In an interview in Cairo last month, Hasham Gaafar, a senior attorney in the Egyptian prosecutor’s office, said Swiss and British authorities have been more responsive to Egypt’s request to freeze and seize assets of former president Hosni Mubarak. Gaafar said U.S. officials “are not meeting our expectations.”

Justice Department officials are quick to note that Attorney General Eric H. Holder Jr. created the Kleptocracy Asset Recovery Initiative just this year, assigning about five full-time attorneys to manage cases.

Assistant Attorney General Lanny A. Breuer said that kleptocracy — the word for graft by government officials — is difficult and time-consuming to investigate because prosecutors must meet a high bar in showing that stolen assets were acquired through corruption. “We are by far the most robust and active law enforcement partner in the international community,” Breuer said. “That doesn’t mean it is going to happen overnight.”

The leader of the initiative, Jennifer Shasky Calvery, chief of the Justice Department’s Asset Forfeiture and Money Laundering Section, agreed.

“It is one thing to say someone has a lot of money and is a corrupt leader; it is another thing to prove that money resulted from the corruption,” said Calvery, a criminal division veteran who first gained fame as an All-American basketball star at George Washington University.

On the investigative side, the kleptocracy lawyers have access to one full-time staffer and about 10 investigators on the Department of Homeland Security’s eight-year-old foreign corrupt investigations group based in Miami, said John F. Tobon, chief of the illicit finance and proceeds-of-crime unit.

The workload is increasing.

Investigators are working about 80 foreign and domestic cases involving kleptocracy, Tobon said.

The new kleptocracy initiative “certainly helped our efforts,” Tobon said of the Obiang case, which began after the Senate subcommittee issued its Riggs Bank findings in 2004. (Riggs was acquired by PNC Financial in 2005.)

“These cases are not easy,” Tobin said. “There are diplomatic issues, legal issues and some are very complex. You need not just a dedicated prosecutor but the experience they gain from prosecuting one case to the next.”

Many investigations cannot get off the ground without a request for “mutual legal assistance” from the country where the graft originally occurred, said Emil van der Does de Willebois, senior financial specialist for the Stolen Foreign Asset Recovery initiative of the World Bank and the United Nations. In the case of Egypt and Tunisia, for example, the countries began searching for stolen assets only after the fall of their longtime leaders. For Equatorial Guinea, the investigation began in the United States, since Obiang has remained in power after more than three decades.

“For a country that has never dealt with this issue before to suddenly start building that investigative capacity from scratch, to start the whole mutual legal assistance process from hardly ever doing that before, and then the unbelievable political pressure to get other things settled, it is quite incredible,” Van der Does de Willebois said.

The Justice Department will seek to forfeit and recover stolen funds for the benefit of the people of the country from which it was taken — but it is unlikely to return the money to Equatorial Guinea until Obiang leaves power and a democratically elected leader takes office.

In a previous case regarding the Republic of Kazakhstan, the Justice Department gave the money to a respected nongovernmental organization to administer the funds in a way that benefited Kazakhstan’s citizens.

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