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U.S. Oil Politics in the 'Kuwait of Africa' | The Nation

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U.S. Oil Politics in the 'Kuwait of Africa'

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It helps that the companies active in Equatorial Guinea have close ties to the Bush Administration. In addition to political heavyweights like ExxonMobil and Chevron, those firms include CMS Energy (which recently sold its holdings in Equatorial Guinea to Marathon). CMS's CEO, William McCormick, gave $100,000 to the Bush-Cheney 2001 Presidential Inaugural Committee. Ocean Energy's consultant on its Malabo operations is Chester Norris, a former ambassador to Equatorial Guinea under George Bush Sr. Perhaps best connected of all is Triton, whose chairman, Tom Hicks, made Bush a millionaire fifteen times over when he bought the Texas Rangers in 1998. Hicks's leveraged buyout firm, Hicks Muse, is Bush's fourth-largest career financial patron, according to the Center for Public Integrity.

This article was prepared with a grant from the Fund for Investigative Journalism, with additional support from the Investigative Fund of the Nation Institute.

About the Author

Ken Silverstein
Ken Silverstein is a Washington, DC–based investigative reporter.

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Bush's decision to reopen the US Embassy was taken soon after he received a plea to do so from the oil industry. "It is important to underscore that most of the oil and gas concessions awarded in Equatorial Guinea to date, have been awarded to US firms," said a memo drafted on behalf of the oil companies and sent to Bush last year. "This is in stark contrast to neighboring countries in the region, where the United States has consistently lost out to French and other European and Asian competitors." Sisinio Mbana, first secretary at Equatorial Guinea's embassy in Washington, told me that at least four Bush Administration officials have consulted with Guinean leaders, including two from the State Department who have met discreetly with Obiang. "The oil companies have done a lot for us," Mbana said. "The State Department gets its information about Equatorial Guinea from them."

In addition to direct lobbying, the oil industry sought to improve Obiang's image by hiring the services of Bruce McColm, a former head of Freedom House who now runs the Institute for Democratic Strategies (IDS), a Virginia-based nonprofit whose stated mission is "strengthening democratic institutions." The Obiang regime's most tireless champion, McColm works closely with the government, which now pays him directly. (According to its latest nonprofit tax form, the IDS spent $223,000 in 2000, of which all but $10,000 went toward its Equatorial Guinea work.) In 2000 McColm sent a team of observers to monitor Equatorial Guinea's municipal elections, which it reported to be basically free and fair. "Electoral officials should be recognized for discharging their responsibilities in an effective and transparent manner," said an IDS press release at the time. "Observers generally felt that the positives of this election far outweighed the negatives." This was in marked contrast to a UN report that said the electoral campaign "was characterized by the omnipresence of the [ruling] party, voting in public and the intimidating presence of the armed forces."

The oil companies have also worked through the Corporate Council on Africa, which represents companies with investments on the continent. Last year the council published a "Country Profile" of Equatorial Guinea, which was paid for by six oil companies and AfricaGlobal, a DC lobby shop that at the time represented Obiang. The guidebook not only promotes the country as a new investment hot spot but also claims that the Obiang regime "has taken significant measures to encourage political diversity and address human and worker rights issues." On February 8, the council sponsored a private luncheon for Obiang, who was visiting Washington with a small entourage. The event was held in the chandeliered dining room of downtown Washington's Army-Navy Club, and each of the roughly fifty guests in attendance received a biography of Obiang, prepared by McColm's IDS, that describes him as the country's "first democratically elected president" and a man who has "embarked on the total physical reconstruction of his country and the improvement of the welfare of all its citizens."

Sporting gold-rimmed glasses and dressed in a blue suit with American and Guinean flag pins on the lapels, Obiang sat at the head table, where he was dwarfed by oilmen and State Department officials. During a lunch of fish stuffed with crabmeat and a custard tart with raspberry syrup, a procession of five corporate executives sought to outdo each other in heaping praise on Obiang and his nation. "It will be the Kuwait of Africa," gushed one of the speakers, Gene Van Dyke of Vanco. "It's a fabulous country." After presenting Obiang with a gift of a wood letterbox, Musselman of Triton thanked several members of the State Department for successfully pressing for the reopening of the US Embassy, including Robert Perry, Deputy Assistant Secretary for African Affairs, who nodded gratefully from the head table, and Assistant Secretary Kansteiner, whom Triton's CEO said "has been a bulldog on this."

When it came time for him to speak, the guest of honor--who looked vigorous despite suffering from cancer, for which he is periodically treated at the Mayo Clinic--spoke of his nation's growing ties to the United States. He urged firms from outside the oil industry to invest in Equatorial Guinea, saying emphatically, "We can promise American companies that their investments are guaranteed." Obiang also congratulated the American people for the great faith they displayed in the aftermath of September 11, and said that he too knew the importance of faith. "There was a time when we thought we didn't have oil," he said. "There was oil to the north, oil to the south, but none here. But I had faith--faith that Equatorial Guinea had oil."

Family Business

From a certain distance, Malabo is breathtaking: This island capital city is cut out of tropical forest and surrounded by volcanic mountains, including one that rises to about 10,000 feet. Palm trees line the hills above its horseshoe bay, and there's a postcard-perfect square in the center of town that is bounded by a beautifully restored Spanish church with two bell towers and an orange and white three-story colonial building that serves as Obiang's office. Several guards sit in front of the building's arched wooden doors, which are engraved with two golden lions and the words "Unidad, Paz y Justicia." From up close, though, Malabo, which has about 50,000 residents, looks to have been in a state of decline ever since the Spanish withdrew more than thirty years ago. Most buildings, even government ministries, are crumbling and unpainted, there are only a few paved roads and the city has electricity only sporadically. Smoke rises from piles of burning trash, which is also strewn down hillsides, where people pick through it looking for scraps.

Foreign oil workers, of whom there are several thousand, mostly Americans, live in guarded corporate compounds with tennis courts, swimming pools and other amenities. Foreigners aren't seen much in Malabo other than at a handful of restaurants that are considered "safe," like the Pizza Place, where many customers wear green, blue or orange jumpsuits issued by their respective employers. Foreign workers also frequent bars like La Bamba, which is run by a Chinese family and blares 1970s rock by the likes of Peter Frampton, Lynyrd Skynyrd and Steely Dan. La Bamba and other bars that cater to the expat community also attract young prostitutes dressed in glittering miniskirts and high heels who are seeking a husband and a home abroad but are willing to settle for a good deal less.

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