Insight: African leader's son tests U.S. anti-corruption push
WASHINGTON (Reuters) - The wealthy son of Equatorial Guinea's president squared off this week against the U.S. government in a legal battle over efforts to seize his $30 million California mansion, exotic cars, a private jet and an extensive collection of Michael Jackson memorabilia.
In a test of the Obama administration's campaign against bribery and corruption involving foreign countries, the case of Teodoro Nguema Obiang Mangue stands out not only as an example of the government's strategy, but for its sheer excess.
Obiang has an $81,600-a-year job as minister of forestry and agriculture for the impoverished nation that his father has led for 32 years. But Obiang owns a Malibu mansion, drives numerous luxury cars and flies around in a Gulfstream jet.
He also owns, as part of a expensive and expansive collection, one crystal encrusted glove once worn by Jackson and other signed memorabilia of the late pop star.
The U.S. Justice Department earlier this year accused Obiang of taking more than $100 million from Equatorial Guinea and sought to seize his assets in the United States.
But Obiang this week asserted his ownership rights in court, launching a fight to keep the Malibu estate, the plane, a 2011 Ferrari and $1.8 million worth of Jackson memorabilia.
A Washington, D.C.-based spokesman for Obiang was not immediately available for comment.
The United States geared up efforts to root out corruption in developing countries during the Bush administration and the Obama administration has carried on, winning multimillion
dollar settlements from companies that admitted paying bribes.
The Justice Department has in recent years expanded a drive to try to claw back assets bought with ill-gotten gains by foreign officials, sometimes called kleptocrats.
SEIZURE CASES GET BIGGER
Early seizure cases were small in dollar terms, but they have gotten bigger, with the Obiang case a prime example.
Seizing assets can take a long time. Developing evidence is often difficult. In a corruption case involving property owned by the family of the former leader of Taiwan, efforts to seize a posh Manhattan condominium and a Virginia home are still pending more than 16 months after they began.
"What they're prosecuting are definitely the egregious ones and they're prosecuting ones where they're able to get the evidence they need," said Heather Lowe, legal counsel at Washington, D.C.-based Global Financial Integrity, which focuses on efforts to curb illegal money flows.
She said the Obiang case was easier to pursue because much of the evidence was dug earlier up by a U.S. Senate committee.
The Justice Department reportedly has also been investigating Obiang and associates for corruption. An agency spokeswoman in Washington declined to comment.
Rich in oil, Equatorial Guinea ranks 11th among countries perceived as having the world's most corrupt public sectors, according to a list released on Thursday by Transparency International, a Berlin-based anti-corruption group.
Obiang's father became the longest-serving head of state in Africa after the death in October of Libya's Muammar Gaddafi.
"When a developing country's public officials routinely abuse their power for personal gain, its people suffer," said Lanny Breuer, head of the Justice department's criminal division, in a speech in November.
"Roads are not built, schools lie in ruin and basic public services go unprovided ... Political institutions lose legitimacy, and people lose hope that they will ever be able to improve their lot," he said.
TAKING FROM GOVERNMENT TILLS
Equatorial Guinea has a population of about 700,000, most of whom live in squalor and poverty despite billions of dollars in revenue coming into the country as a result of its large oil, timber and natural gas resources.
U.S. prosecutors say that Obiang and other government officials have used bribery and extortion schemes to fill government coffers and steal the money. They said the schemes have included requiring companies to pay so-called taxes and fees, as well to make donations to pet projects.
"When you don't have access to education, you don't have access to healthcare, you don't have access to water, it is apparent that this money is being diverted elsewhere," said Sarah Pray, a policy analyst on African affairs for the Open Society Foundations, a New York-based group.
While accusations of rampant corruption and bribery in Equatorial Guinea have swirled for years under the Obiang family's rule, U.S. authorities have only brought a handful of cases involving companies paying bribes there.
When officials siphon off funds, it "makes it very difficult behavior to go after," said Alexandra Wrage, a legal expert on bribery who is the president of the firm TRACE, which helps firms comply with anti-bribery law.
Known as the Foreign Corrupt Practices Act, the law bars any company listed on U.S. markets from paying a bribe - in money or gifts - to get favorable treatment for its business.
OIL COMPANY AND OBIANG
The Senate's Permanent Subcommittee on Investigations in 2004 found numerous payments by U.S. oil companies to Equatorial Guinea that may have constituted bribes, and the U.S. Securities and Exchange Commission launched a probe.
The SEC probed five oil companies: Exxon Mobil Corp, Chevron, Devon Energy, Amerada Hess and Marathon Oil. The last two of these five companies said the SEC decided against taking action in 2009, while the others did not discuss the probe in detail.
The SEC a year ago settled with GlobalSantaFe Corp, a firm later acquired by oil driller Transocean Ltd, over allegedly illegal payments made in Nigeria, Angola, Gabon and Equatorial Guinea from 2002-2007.
Wrage, of TRACE, said she is familiar with most of the U.S. companies operating in Equatorial Guinea and she said they have strong anti-bribery compliance and training programs.
"It just seems unlikely to me that they would have engaged in conduct that is, on its face, a violation of the FCPA. If they had, I think the Justice Department would be involved by now," she said.
In the Obiang case, a federal judge in Washington has given the Justice Department permission to seek foreign assistance to grab his Gulfstream jet if the opportunity arises. However, getting final court approval to seize it all could take years.
(Editing by Kevin Drawbaugh)
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