Dirty Dictator Loot

By Shenon, Philip | Newsweek, March 21, 2011 | Go to article overview

Dirty Dictator Loot


Shenon, Philip, Newsweek


Byline: Philip Shenon

Obama talks tough, but the U.S. remains a haven for the ill-gotten gains of bloodthirsty despots.

He is the West African equivalent of one of Muammar Gaddafi's wayward, Lamborghini-loving sons.

Teodoro Obiang is a government minister in the tiny oil-rich African nation of Equatorial Guinea and son of the country's brutal dictator. The 41-year-old Teodoro has made the U.S. a second home, often jetting in on his $36 million U.S.-bought Gulfstream V, spending quality time at his $35 million oceanfront mansion in Malibu. He recently commissioned designs fora $380 million superyacht that could be docked along the California coast. Congressional investigators have determined that his lawyers easily established dummy companies in the U.S. to mask tens of millions of dollars that, according to a four-year-old Justice Department memo, the Obiang family mostly looted from the government, sharing none of its wealth with the 700,000 people they rule. Seventy percent of the population lives on less than $2 a day; most have no access to clean water.

The Obama administration has made a show of freezing the Gaddafi kids' assets. "There is a serious risk that Libyan state assets will be misappropriated by Gaddafi, members of his government, members of his family, or his close associates if those assets are not protected," the president announced last month--part of his bid to show that the U.S. is at the forefront of global efforts to track down and tie up the fortunes of kleptocrats worldwide.

But Teodoro is a stark reminder that Obama's crackdown on the dirty assets of dictators' families is a highly selective campaign. Much to Washington's embarrassment, the Guinean playboy, who denies all allegations of corruption, has plenty of company among the kin and cronies of the world's despots who are able to travel freely to the United States, to spend here lavishly, and to deposit billions of dollars of ill-gotten wealth in American banks and corporations. And the more the U.S. depends on a dictatorial nation's bounty--say, in the case of Equatorial Guinea, its oil--the more likely, it seems, America is to turn a blind eye.

Even the Libyan crackdown seems a bit suspect. After all, the United States has believed for years that Qaddafi and his family were misappropriating billions of dollars from the government and sending some of it off to the United States. Given reports of the tens of billions of dollars stashed abroad by Egypt's Hosni Mubarak and Tunisia's Zine Ben Ali, why hasn't the Obama administration followed the lead of Switzerland and frozen their assets as well? (The White House won't comment, but U.S. diplomats suggest it reflects the years of close ties to the regimes of Mubarak and Ben Ali.)

The uncomfortable, often overlooked fact is that the U.S. remains as much a haven for the loot of bloodthirsty foreign despots as Switzerland, Dubai, the Cayman Islands, and the other international banking centers that usually take blame for stashing autocrats' dirty money. The Obama administration is criticized by anticorruption activists for doing little to change that, despite the president's lofty pronouncements to the contrary over the past month.

"America is still very much a safe haven for dictators' money," says Robert Palmer, of the London-based the anticorruption group Global Witness. …

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