Consistency in Morals, Messaging, and Policy

October 25th, 2011

flickr / Axion23

Teodoro Nguema Obiang has controlled Equatorial Guinea since he executed his uncle in a bloody coup d’état in 1979. Equatorial Guinea is a country in Middle Africa on the coast.  It is one of the smallest and wealthiest countries in the continent, in large part because it holds Africa’s largest oil reserves.  Yet the wealth is extremely concentrated in the hands of the government and the ruling elite. As a result over 75% of the population lives below $2 per day, 35% of its citizens do not live past the age of 40, and nearly 60% do not have access to safe drinking water.

Over Obiang’s three decades as president, Equatorial Guinea has witnessed many disappointments. The IMF and World Bank have both withdrawn aid programs, citing massive government corruption and theft.  The International Red Cross has accused Obiang of human rights violations. The Alliance of Professional Africans in the Diaspora has called Obiang one of Africa’s “worst dictators,” along with Zimbabwe’s Robert Mugabe and Angola’s Jose Eduardo dos Santos.

In 2009 campaign group and Task Force member Global Witness uncovered documents showing Obiang’s son, Teodorin Obiang, purchased a $38 million Gulfstream private jet, a $35 million Malibu mansion, speedboats and a fleet of luxury cars in the United States. Then, earlier this year, Global Witness revealed that Teodorin Obiang, the son of the dictator, “commissioned plans to build a superyacht worth $380 million.” That’s nearly three times the amount Equatorial Guinea spends annually on both health and education programs.

Earlier this month, in a move that surprised many, French police entered Teodoro’s Paris mansion and seized eleven high-end cars, including a Ferrari 599 GTO, a Maserati MC12, and not one, but two Bugatti Veyrons, which are considered “the most powerful, most expensive, and fastest street-legal production car(s) in the world.” Then, today, the U.S. Department of Justice (DoJ) unsealed an asset forfeiture claim against some of those U.S. assets Global Witness discovered in 2009, including the home in Malibu and the jet. The claim attests the assets were bought with the proceeds of corruption. (Ya think?)

These moves are constructive, particularly after so many years of investigation. Global Witness has already welcomed the actions and I second their commendation. But there is still a fundamental problem here.

There is a disconnect between the U.S. personal relations campaign and U.S. actions. We claim to lead a global fight against tax evasion, but accept tax evading proceeds from abroad. As Raymond Baker has noted “it is not illegal in the United States for banks to receive tax evading proceeds so when Indian, Mexican, Nigerian or others nationals show up with money for deposit in U.S. accounts or wire transfer money to the U.S., even if it is tax evading money, we are perfectly prepared to take the deposits.” Likewise, the U.S. publicly unseals a forfeiture claim on Obiang’s assets, but still allow him to visit the United States at will, despite the fact, as Global Witness has pointed out “the State Department is legally obliged to keep a list of foreign officials against whom there is credible evidence of corruption, who should be denied visas.”

The truth is, as Raymond Baker has put it so succinctly: we like the money. And it’s fine to like money. Capitalism (and economics for that matter) is fundamentally all about liking money. That’s how we make the system work. But legal money. Illegal money is another story. Illegal money is an economic problem as it undermines trade and governance. Illegal money is a moral problem as it exacerbates poverty and crime. In order to truly promote the free market, good economics, and good governance abroad, the U.S. must drop this double identity. This U.S. stands against corruption and tax evasion—abroad and at home. This should be true in our messaging and our morals and our policies. No exceptions.

Image License: Attribution Some rights reserved by Axion23

Written by Ann Hollingshead

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