Tales of Corruption

Chances are you’ve never heard of Equatorial Guinea (EG for short). And why would you? It’s never in the news, it’s a tiny country in the middle of Africa, barely the size of Maryland, and the name of the country sounds like a slur against Italians.

So why am I writing about EG? Because the devil is in the details, and sometimes you need to see how things work in places like EG to understand how things work in places like, well, the United States.

What makes EG different is that it has oil. This tiny country of barely 500,000 people produces about 500,000 barrels of oil per day. This is a barrel per day, per citizen. (To put this in perspective, Saudi Arabia produces about 1/3 barrel per day per resident.) As a result, the GNP of EG is a staggering $50,000 per capita, which puts in ahead of the United States and among world leaders such as the banking havens of Bermuda, Luxembourg and Liechtenstein.

Despite this staggering wealth, most citizens of EG live in abject poverty, getting by on about $1 per day. The capital city has no running water and parts of the city lack electricity. Raw sewage runs in the streets, there is no daily newspaper and the city lacks even a bookstore.

So where does the money go? Surprise, it seems that most of the money goes to President Obiang, the brutal dictator who took over the country when he murdered his uncle in 1979. It’s hard to overstate just how bad this guy is. His uncle, named Macias, EG’s first leader after it gained its independence from Spain, murdered 65,000 EG citizens, drove a third of the country into exile, and is probably best known for holding mass public executions in a stadium while his favorite song – Those were the days – was played over loudspeakers. Obiang ran Macias’ “Black Beach Prison,” known worldwide for the horrors of its torture chambers, and which continues to hold political prisoners to this day.

I’m not going to write at length about Obiang’s corruption. It has been adequately covered by others. You just can’t make stuff like this up, and it’s well worth your while to read up on this thug and his family. Caution, if you have an ounce of decency or humanity, it will turn your stomach.

http://www.spiegel.de/international/spiegel/0,1518,434691,00.html

http://www.harpers.org/archive/2006/04/sb-obiang-eg

http://www.timesonline.co.uk/tol/news/world/article626511.ece

http://www.motherjones.com/news/feature/2005/01/12_400.html

Now that you have a little background information about Obiang, you need to know what Condaleeza Rice had to say about him when he visited the White House last year. “Thank you very much for your presence here.” She cooed, adding: “You are a good friend, and we welcome you.”

Why was Obiang welcomed by “Dr.” Rice as a good friend? Obviously, it has to do with oil. But just saying “oil” doesn’t really explain why this mass murderer was so warmly greeted by our government. After all, oil is oil. We can buy oil from anybody, can’t we?

Here are a couple of clues.

EG’s oil is extracted by foreign oil companies. The royalties they pay EG are well below the royalties paid to other African oil producers.

In February, 2006, just before Obiang’s visit with Rice, EG entered into a production sharing joint venture with China’s leading oil and gas company. As noted in the article, “US companies have hitherto developed its oil resources.“

So we see two things going on here. First, US oil companies are paying below market rates for EG’s oil. A ten percent discount would translate to about a Billion dollars in free money to the oil companies per year. You can be sure that the Bush administration is not about to spoil that party. And was it just a coincidence that Obiang was invited to the White House just weeks after signing a deal with China? Obiang’s message to Washington was clear: “If you find my government too distasteful, we can find others willing to develop our oil.” And Washington’s response was loud and clear: “We can do business with you.”

Don’t expect the Bush administration to admonish Obiang for his dismal record on human rights, or demand that he share his country’s oil revenues with the citizens of his country, anytime soon.