banking havens with strict secrecy laws.
Then there were the “investment accounts” of Obiang’s regime. In 2003, the value of these accounts fluctuated between $300 million and $500 million. In effect, these were Equatorial Guinea’s financial reserves—the money that was gained from oil sales. It is unusual for the bulk of a country’s financial reserves to be held in a private foreign bank, especially a relatively minor one like Riggs. And it is even more unusual for transfers or withdrawals from these accounts to require just the president’s signature. Obiang actually did relatively little with them, aside from occasional transfers to the accounts in banking havens. Instead of being invested in schools or hospitals or light bulbs for the minister of education’s office, and while his compatriots died of malaria and hunger-related diseases, most of the money stayed at Riggs.
On occasion, the situation resembled a Charlie Chaplin movie. The Riggs banker who oversaw the accounts, Simon Kareri, twice went to the Equatorial Guinean embassy, a mile from his office, to pick up suitcases that weighed sixty pounds and contained $3 million in plastic-wrapped stacks of hundred-dollar bills. He dragged them back to Riggs and deposited their contents unquestioningly into one of Obiang’s accounts. (“Sir,” Kareri wrote in a memo to his superior, “I wish in due course you will get to know the President of Equatorial Guinea and witness his simplicity first hand.”) The bank also received cash deposits of more than $1.4 million into accounts belonging to one of Obiang’s wives. In those cases—as with other large cash deposits—Riggs did not file timely or accurate “suspicious activity reports” to regulatory authorities, as required whenever a bank suspects or should suspect that a transaction might involve illicit activities. Riggs was caught up in an age-old fever. In an e-mail, a senior Riggs banker excitedly predicted more deposits from Equatorial Guinea and explained, “Where is this money coming from? Oil—black gold—Texas tea!” It was such a free-for-all that Kareri transferred more than $1 million into an offshore company he controlled. It appears the dictator who was siphoning money from his country was himself being pickpocketed by his banker.
It all came crashing to the ground when Senate investigators, reacting to stories about Obiang and Riggs by investigative journalist Ken Silverstein, launched their probe. In 2004 the Senate released a report entitled “Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act, Case Study Involving Riggs Bank.” A sexier but no less accurate title might have been “How a Despot Looted His Country with the Help of American Bankers and Oilmen.”
American oil companies were involved in far more than ordinary royalty payments to Obiang’s regime. They were also making a variety of payments that seemed geared toward rewarding important figures in Equatorial Guinea. The Senate report got straight to this point: “Oil companies operating in Equatorial Guinea may have contributed tocorrupt practices in that country by making substantial payments to, or entering into business ventures with, individual E.G. officials, their family members, or entities they control, with minimal public disclosure of their actions.” Among the payments were more than $4 million that various firms, including Exxon, Chevron, Marathon and Hess, provided for tuition and living expenses of Equatorial Guinean students abroad. These are the sorts of scholarship programs that companies like to portray as shining examples of their enlightened and generous charity. But according to the report, most of the students appeared to be “children or relatives of wealthy or powerful E.G. officials.” These are akin to bribes in kind; instead of slipping $50,000 to a government official, a company pays the college expenses of the official’s son.
Between 1995
Then there were the “investment accounts” of Obiang’s regime. In 2003, the value of these accounts fluctuated between $300 million and $500 million. In effect, these were Equatorial Guinea’s financial reserves—the money that was gained from oil sales. It is unusual for the bulk of a country’s financial reserves to be held in a private foreign bank, especially a relatively minor one like Riggs. And it is even more unusual for transfers or withdrawals from these accounts to require just the president’s signature. Obiang actually did relatively little with them, aside from occasional transfers to the accounts in banking havens. Instead of being invested in schools or hospitals or light bulbs for the minister of education’s office, and while his compatriots died of malaria and hunger-related diseases, most of the money stayed at Riggs.
On occasion, the situation resembled a Charlie Chaplin movie. The Riggs banker who oversaw the accounts, Simon Kareri, twice went to the Equatorial Guinean embassy, a mile from his office, to pick up suitcases that weighed sixty pounds and contained $3 million in plastic-wrapped stacks of hundred-dollar bills. He dragged them back to Riggs and deposited their contents unquestioningly into one of Obiang’s accounts. (“Sir,” Kareri wrote in a memo to his superior, “I wish in due course you will get to know the President of Equatorial Guinea and witness his simplicity first hand.”) The bank also received cash deposits of more than $1.4 million into accounts belonging to one of Obiang’s wives. In those cases—as with other large cash deposits—Riggs did not file timely or accurate “suspicious activity reports” to regulatory authorities, as required whenever a bank suspects or should suspect that a transaction might involve illicit activities. Riggs was caught up in an age-old fever. In an e-mail, a senior Riggs banker excitedly predicted more deposits from Equatorial Guinea and explained, “Where is this money coming from? Oil—black gold—Texas tea!” It was such a free-for-all that Kareri transferred more than $1 million into an offshore company he controlled. It appears the dictator who was siphoning money from his country was himself being pickpocketed by his banker.
It all came crashing to the ground when Senate investigators, reacting to stories about Obiang and Riggs by investigative journalist Ken Silverstein, launched their probe. In 2004 the Senate released a report entitled “Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act, Case Study Involving Riggs Bank.” A sexier but no less accurate title might have been “How a Despot Looted His Country with the Help of American Bankers and Oilmen.”
American oil companies were involved in far more than ordinary royalty payments to Obiang’s regime. They were also making a variety of payments that seemed geared toward rewarding important figures in Equatorial Guinea. The Senate report got straight to this point: “Oil companies operating in Equatorial Guinea may have contributed tocorrupt practices in that country by making substantial payments to, or entering into business ventures with, individual E.G. officials, their family members, or entities they control, with minimal public disclosure of their actions.” Among the payments were more than $4 million that various firms, including Exxon, Chevron, Marathon and Hess, provided for tuition and living expenses of Equatorial Guinean students abroad. These are the sorts of scholarship programs that companies like to portray as shining examples of their enlightened and generous charity. But according to the report, most of the students appeared to be “children or relatives of wealthy or powerful E.G. officials.” These are akin to bribes in kind; instead of slipping $50,000 to a government official, a company pays the college expenses of the official’s son.
Between 1995
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