Financial Transparency Coalition

This week Transparency International (TI) released their corruption perceptions index, which measures the perceived level of public-sector corruption in 180 countries and territories around the world. TI notes that “the plundering of public resources feeds insecurity and impunity” and erodes “trust in the very institutions and nascent governments charged with ensuring survival and stability.”

We often think of corruption as “their” problem; “they” being the developing world and “us” being the rich.  We see chronic poverty as a choice; an exploitation of resources by corrupt leaders and dictators who rob their countries blind.  “Alas,” we say to ourselves, “that is certainly unfortunate, but we can’t help them if they aren’t willing to help themselves.”

Unfortunately for our nations—beacons of political rights and equality—it’s not so simple.

Let me tell you about a man named Teodoro Nguema Obiang.  Obiang has controlled Equatorial Guinea since he overthrew and executed his uncle in a bloody coup d’état in 1979. And he’s been quite a leader.  In July 2003, state-operated radio declared Obiang to be a God who is “in permanent contact with the Almighty” and “can decide to kill without anyone calling him to account and without going to hell.”   Obiang rules Equatorial Guinea with an iron hand and has been called Africa’s “worst dictator.” Obiang also presides over one of the largest oil reserves in Africa and 75% of his population lives below $2 per day.

Enter Riggs.

In the mid-1990s Riggs National Bank opened and handled 60 accounts for Obiang and his family members.  The bank handled six cash deposits to the president’s account, totaling $11.5 million.  The senior Riggs official overseeing Obiang’s account even hauled suitcases stuffed with cash into the bank for deposit.  At no point did this bank file a Suspicious Activities Report, as required by law. Finally, in 2004, a Senate panel caught on and Riggs Bank was fined more than $25 million for its crimes and several of the bank’s directors were criminally prosecuted.

So we can absolve the U.S. of guilt, right? Our country cracked down on the crooked bank and did its part to fight corruption worldwide…right?  RIGHT?!?!

Sorry to say… not right.  Confidential U.S. government documents uncovered by campaign group Global Witness show that Obiang’s son recently purchased a $33 million private jet, a $35 million Malibu mansion, speedboats and a fleet of fast cars in the United States.  Given his salary of $4,000 – $5,000 a month as a minister, we must wonder where this grip of cash came from.  (Maybe he won the lottery?)   Global Witness also notes the U.S. government continues to allow Obiang into the country, despite the fact the State Department is legally obligated to deny visas to foreign officials for whom there is credible evidence of corruption.

We have an extensive network of laws against allowing the proceeds of corruption to enter our borders and against allowing those individuals from entering the country.  But yet for the last five years, even after a far-reaching investigation and the collapse of a major bank, the same corrupt family is hauling millions onto our shores and freely traveling to the homes they own here.  Which makes us all a little more complicit than we would like.

End note: Though U.S. laws prohibit the proceeds of corruption from being held in the United States, the proceeds from many other unlawful activities can be deposited within our borders, provided that the original activity took place in a foreign country.  These activities include (among many others): alien smuggling, espionage, racketeering, sex trafficking, and the sexual exploitation of children.   Raymond Baker, Director of Global Financial Integrity, has many times noted that this is “quite the loophole” in U.S. anti-money laundering laws.