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Harry Cassin
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Thomas Fox
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Bill Waite
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Shruti J. Shah
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Russell A. Stamets
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Eric Carlson
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From Ken’s Lips To The Senate’s Ears

Ken Silverstein’s report on this week’s Senate hearings about foreign rulers moving huge chunks of money to the U.S. is here.

For Silverstein, Harper’s Washington editor and writer of the online Washington Babylon, the Senate investigation is a personal triumph. With help from Global Witness, he exposed the financial maneuverings of African kleptocrats and their U.S. enablers. His story in November about Teodoro Nguema Obiang Mangue, son of the dictator of oil-rich Equatorial Guinea, was a breakthrough.

We mentioned Silverstein’s story in a post here, noting it was the first time a mainstream publication had ever talked about Presidential Proclamation 7750 —  the 2004 American law that allows the State Department to deny visas to foreign kleptocrats and their families.

Silverstein wondered then why Obiang — “a notoriously crooked official” — was allowed to enter the U.S. and stash millions in cash and assets there. Did the lack of action against Obiang, Silverstein asked, stem from political pressure to ignore the crimes and corruption of a possible future president of an oil-friendly ally?

In Washington, Senator Carl Levin, chairman of the Permanent Subcommittee on Investigations, used Silverstein’s reporting to launch an investigation into Obiang and others, culminating in this week’s hearings. At a press briefing Tuesday, Silverstein asked Senator Levin why Obiang isn’t on a list of corrupt foreign officials barred from the U.S. under Proclamation 7750. “That’s the right question,” Levin replied.

This week, Levin’s committee released a 330-page report. Some “findings of fact” were:

Lawyers. Two U.S. lawyers helped Teodoro Obiang circumvent anti-money laundering and PEP (politically exposed person) controls at U.S. banks by allowing him to secretly use a series of attorney-client, law office, and shell company accounts as conduits for his funds.

Realtors. Two realtors helped Obiang buy and sell multi-million-dollar residences in California, and a real estate escrow agent facilitated his purchase of a $30 million property by handling millions of dollars wire transferred from Equatorial Guinea, without verifying the source of the funds, since they had no legal obligation to do so.

Escrow Agents. After one U.S. escrow agent, as an AML precaution, refused to complete the purchase of a Gulfstream jet for Obiang without obtaining information on the source of $38.5 million to be paid for the aircraft, another U.S. escrow agent stepped in and completed the transaction with no questions asked. The escrow agents had no legal obligation under current law to inquire about the source of the funds.

Lobbyist. A U.S. lobbyist helped President Omar Bongo of Gabon obtain six U.S.- built armored cars and U.S. government permission to buy six U.S.-built military cargo aircraft from Saudi Arabia to support his regime, while allowing his U.S. bank accounts to be used as a conduit for $18 million in suspect funds in connection with those transactions, with no questions asked.

Offshore Corporations. Jennifer Douglas, a PEP through her marriage to Atiku Abubakar, former vice president of Nigeria, used a series of U.S. bank accounts to bring over $25 million in suspect funds into the United States via wire transfers from offshore corporations. Douglas was later named in the bribery prosecution of ex-U.S. Congressman William Jefferson and has been linked to corruption admitted by Siemens.

University. A U.S. university accepted over $14 million in wire transfers from unfamiliar offshore shell corporations to pay for consulting services related to development of a university in Nigeria founded by Mr. Abubakar.

Personal Accounts. Pierre Falcone, a PEP through his close association with the President of Angola and appointment as an Angolan Ambassador, was able to use personal, family, and U.S. shell company accounts at a U.S. bank in Arizona to bring millions of dollars in suspect funds into the United States and move those funds among a worldwide network of Falcone accounts, despite his status as an arms dealer and a long history of involvement in criminal proceedings in France. Falcone is now in jail in France.

Silverstein’s latest story added these weird details:

Two American attorneys set up shell accounts for Obiang to help him buy a $30 million home in Malibu and a $38.5 million jet. All told, Obiang moved more than more than $110 million into the U.S. from 2004 to 2008. One of the shell companies was called Sweet Pink, named after the rapper Eve Jeffers, who was then Obiang’s girlfriend and the president of Sweet Pink. (Eve later dumped Obiang, reportedly after hearing rumors that his dictator father was a cannibal who ate his political opponents. The senate report neither confirms nor denies that Obiang Sr. is a flesh eater.)

A copy of the proceedings of the Senate Permanent Subcommittee on Investigations — Keeping Foreign Corruption Out of the United States: Four Case Histories — along with the full staff report can be downloaded here.

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