US Senate Hearing Highlights Corruption in Equatorial Guinea

US Senate Hearing Highlights Corruption in Equatorial Guinea

February 5, 2010
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EG Justice welcomes the findings of the US Senate Permanent Subcommittee on Investigations' hearing on foreign corruption in finance in the United States.

(WASHINGTON, DC, Feb. 5, 2010)—EG Justice welcomes the findings of the US Senate Permanent Subcommittee on Investigations' hearing on foreign corruption in finance in the United States. The subcommittee’s 330-page bipartisan report documents damning evidence against corrupt foreign officials and the US real estate, legal, and financial professionals who have aided them in funneling millions of dollars in ill-gotten funds into US financial institutions.

In the case of Equatorial Guinea, the president’s son, Teodoro Nguema Obiang (Teodorin), moved more than $110 million dollars of suspect funds into US bank accounts with the aid and negligence of US legal and real estate professionals; including:

•    how an escrow agent completed the purchase of a $38.5 million Gulfstream jet without verifying the source of the funds; and,
•    how a real estate agent facilitated the purchase of a $30 million house, without undertaking any due diligence to verify that the funding was legitimate.

“There is no doubt that corruption by high-ranking government officials, as identified in the subcommittee report, undermines rule of law, democracy, and the fight against poverty, as has been demonstrated time and again in Equatorial Guinea,” said Tutu Alicante, executive director of EG Justice. “If the US government truly wants to promote good governance and rule of law in Africa, as President Obama stated this summer in Accra, it is critical that his administration eliminates the loopholes and mechanisms that facilitate foreign corruption within the US.”

“Keeping Foreign Corruption out of the United States: Four Case Histories”, released by chairman Sen. Carl Levin and ranking member Sen. Tom Coburn, identifies how foreign officials in Gabon, Nigeria, Angola, and Equatorial Guinea, skirted US anti-money laundering controls through a network of US lawyers, realtors, shell companies, and banking institutions, laundering millions of dollars into the United States:

This hearing by the US Senate is a step in the right direction, and EG Justice calls on the US government to adopt the subcommittee’s recommendations, which include implementing stronger controls on the accounts of “politically exposed persons,” requiring US corporations to identify their beneficiary owners, and better enforcing Presidential Proclamation 7750 which prohibits corrupt foreign officials from obtaining visas.

Equatorial Guinea has the highest GDP per capita in Africa, yet poverty and human development indicators remain abysmally low. Nearly 77 percent of the population lives below the poverty line, and infant and child mortality have in fact worsened since the discovery of oil in the mid 1990’s. Meanwhile, Teodorin Obiang spent nearly double the country’s 2007 education budget on mansions, exotic cars, and other luxury items between 2004 and 2007.

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