GANGSTERS & OUTLAWS > COPS & OTHER CHARACTERS

Mark Thatcher & Simon Mann's African coup

Bank Fallout in the United States

The coup drew international attention to Equatorial Guinea, President Obiang and the missing millions from the nation's oil windfall. American authorities were obliged to look into the country's myriad financial relationships with domestic corporations.

Ken Silverstein

It wasn't difficult to smoke out the rat: For the past two years, journalist Ken Silverstein has been producing detailed reports that all but spelled out the bribery and corruption, first in the Nation magazine and later in the Los Angeles Times.

Riggs bank logo

He reported, for example, that U.S. oil companies had made deposits at Riggs Bank in Washington, D.C., in an account established by President Obiang. Federal investigators discovered that Guinean officials sometimes made walk-in cash deposits at Riggs branches of as much as $1 million in shrink-wrapped bills.

Riggs, the oldest bank in Washington, calls itself, appropriately enough, "the bank of presidents."

The Treasury and Justice departments, as well as a U.S. Senate investigative subcommittee, had scrutinized Riggs' "embassy banking division" for years concerning allegations of money laundering on behalf of foreign leaders, including former Chilean dictator Augusto Pinochet.

The new federal investigation revealed that Equatorial Guinea was Riggs Bank's biggest customer, with more than 60 accounts and deposits of as much as $700 million.

The bank had allowed the Guineans to transfer money freely between accounts, some personal and some designated for official government business. Worse, Riggs had enabled wire transfers of more than $35 million from Equatorial Guinean accounts to the secret accounts of offshore corporations.

And they did it all happily. The bank's executives were more than happy to do business with the Guinean government, Obiang and his family.

"Where is this money coming from?" a Riggs executive vice president emailed to colleagues in 2001. "Oil - black gold - Texas tea!"

The bank was assessed a $25 million penalty for its "willful and systematic" enabling of money laundering. Simon Kareri, the senior manager who oversaw the Equatorial Guinea business, invoked his Fifth Amendment right against self-incrimination and refused to testify during a Senate investigative subcommittee hearing in 2004.

The Senate report released in July confirmed much of the reporting by Silverstein of the L.A. Times, saying the bank's actions prompted "concerns related to corruption and profiteering." It also suggested that federal regulators investigate the oil companies invested in the country.

The report concluded, "Oil companies operating in Equatorial Guinea may have contributed to corrupt practices in that country by making substantial payments to, or entering into business ventures with, individual Equatorial Guinea officials, their family members, or entities they control, with minimal public disclosure of their actions."