Private Empire: ExxonMobil and American Power

by Steve Coll

  At least one of Obiang’s Washington advisers believed that the Bush administration must have been involved, but the adviser could not turn up proof. Obiang was not entirely sure what to believe, but he could not in the end bring himself to conclude that the Americans had joined Spain in the conspiracy to oust him. About Spain’s culpability, he had no doubt. Bush, Blair, and Aznar “discussed the need to get rid of dictators,” he reflected later. “When you talk about something like dictators, you have to do an analysis: Which governments are dictators and which are not? Aznar took advantage of this . . . to advance the concept of bringing down the ‘dictatorship’ of Equatorial Guinea.” Obiang doubted that the Bush administration knew about the plot in advance because “the American companies are the ones with the primary investments here.” Spain was “jealous of American success here. . . . The mercenaries and Spanish companies were going to take over. For that reason, I can’t say the Americans were involved. They would lose business to the Spanish and the British.”18

  The Bush administration’s attitude toward Obiang’s government nonetheless mystified him. More than $5 billion of investments by American oil companies were at risk in his country. The Mann coup made clear just how diverse, creative, and determined were the potential jackals circling tiny Equatorial Guinea, waiting for a chance to snatch its riches. Yet Obiang had been asking for security assistance from the United States, to protect the wealth of its oil corporations, and all he had been given was an M.P.R.I. license to train a coast guard. What good would a coast guard do if mercenaries or a neighboring military invaded Malabo and voided ExxonMobil’s contracts? The oil-endowed autocracies of Saudi Arabia, Kuwait, and the United Arab Emirates had poor human rights records and hardly a whiff of democracy, yet they were treated in Washington as important strategic partners and received billions of dollars’ worth of sophisticated defense systems—jet fighters, missile interceptors, the works. Why not Equatorial Guinea?

  Obiang paid a handful of lobbyists to represent him in Washington. They advised him about political reforms and image management, but they had not resolved the basic problem, as he saw it, that he lacked sufficient access to the Bush administration. The oil companies operating in Equatorial Guinea told Obiang that he needed to upgrade his Washington presence. They could support his cause, but they could not conduct his lobbying for him. If ExxonMobil’s Washington office, or those of Hess and Marathon, “oiled” Obiang’s efforts to win favor from the Bush administration by becoming too directly involved in Malabo’s rehabilitation, it would only discredit Equatorial Guinea further. Obiang reached out to two of the most successful lobbying firms in Bush’s Washington: Barbour Griffith & Rogers and Cassidy & Associates.

  Richard Burt, a former New York Times reporter who had served as the American ambassador to West Germany during the Reagan administration, helped to manage the Obiang account under contract for Barbour Griffith. At Cassidy, one of Obiang’s aides called Amos Hochstein, a young former Capitol Hill aide. Intrigued, Hochstein used Google to research Equatorial Guinea; the search returns were not particularly encouraging.

  He traveled to New York to meet with Obiang’s prime minister, Miguel Borico, at The Pierre hotel. The president was in a mood for fresh thinking, the prime minister reported. Obiang had been “embarking on an American strategy,” as his oil wealth grew, to protect and align himself with the world’s most formidable oil-consuming superpower, and yet “he wasn’t getting anywhere,” one of Obiang’s advisers recalled.

  “You’re in deep trouble,” the Cassidy lobbyist told them. Hochstein was a liberal Democrat. He was uncomfortable with the account, but his firm had decided to go forward. “I’m not going to lobby for you. What I can do is help you understand what you need to do to change your relationship with the United States government. I’ll try to be the translator between you and the American government.” Cassidy accepted Obiang as its client for a retainer of more than $1 million a year, a handsome sum in the Washington lobbying arena.19

  The question of whether the Bush administration had winked in advance at the Mann-led coup plot lingered, sowing distrust and uncertainty in the U.S.-Equato-Guinean oil partnership on which ExxonMobil depended. At an African counterterrorism conference for regional intelligence leaders held in Libya around this time, Obiang’s director of internal security approached Mel Gamble, the Africa division chief of the C.I.A., and accused him outright of sponsoring the Simon Mann–led coup plot against Obiang.

  “It was a U.S. aircraft,” Obiang’s spy chief pointed out.

  “Look, you can buy a lot of things in the United States,” Gamble answered. He denied that the United States had any involvement. “You can buy weapons from the U.S., too,” he said, but that didn’t mean that the Bush administration was involved or even aware.

  Senior intelligence officers from Angola and Algeria overheard Gamble’s pleading. They joined the discussion and backed their American colleague: Just because African coup plotters bought equipment in the United States did not mean that the Bush administration knew what was going on. They knew this from their own experiences, they affirmed.

  The Central Intelligence Agency had no station in Equatorial Guinea at the time of the Mann-led coup attempt. The agency covered the country out of a base in Lagos, Nigeria; operations officers there might make one or two trips to Malabo each year, to make contacts and survey the political landscape. Reporting on economic issues such as oil production had been cut back during the late 1990s. After September 11, terrorism became the C.I.A.’s overriding focus, and by 2003, the Africa division was doing all it could to stave off the transfer of its personnel to Iraq and Afghanistan. Even at the Pentagon, which was developing new military-to-military and counterterrorism contacts in Africa’s oil-producing regions, Equatorial Guinea “just wasn’t up there” as a priority for American intelligence collection, said Theresa Whelan. “We had no access.”20

  Was it credible to think that neither the Central Intelligence Agency nor the Pentagon knew about the coup in advance? South Africa’s intelligence service plainly did, and Britain’s picked up advance word as well. Either the United States was so obsessed with terrorism and Iraq that it did not have the capacity to pick up not-so-top-secret reporting by allies, or it did know, and successfully buried its awareness after the coup failed.

  The evidence from the plotters’ testimony, although tainted by the circumstances of their various incarcerations, does suggest that Prime Minister Aznar was involved, or at least was informed in advance. (Aznar, through his office, has denied that allegation.) If Aznar was involved, it is at least conceivable that he warned the Bush White House in advance about what to expect in Malabo, using a narrow, closely held intelligence or White House channel that did not reach the wider American security bureaucracy. Even that theoretical possibility seems doubtful, however. Tipping Bush in advance would risk soliciting the White House’s objection to the coup, not least because of American corporate oil investments in the targeted country.

  The coup attempt did catalyze the Bush administration to move closer to Teodoro Obiang Nguema. The exchange between the C.I.A.’s Gamble and his Equato-Guinean counterpart at the Libyan intelligence conference suggested the flavor of the administration’s dilemma. Obviously, Obiang now had reason to doubt the United States—the Riggs scandal and the purchase of the coup plane from Kansas would have made anyone in his position nervous. The policy of cautious ambivalence that the administration had pursued toward Obiang’s regime, notwithstanding the enormous investments in the country by American-headquartered corporations, now had to be reexamined. Among other things, if the Bush administration did not reach out quickly to Obiang, he might assume the worst about the events in March and reassess his commitment to ExxonMobil, Marathon, and Hess.

  On June 18, 2004, the administration delivered to Obiang what he had been seeking since Bush’s inauguration—a high-level meeting to discuss “in depth,” as Secretary of State Colin Powell put it, the enduring ties betw
een the United States and Equatorial Guinea. Obiang arrived at 2 p.m. at the State Department in Foggy Bottom. He ascended a special elevator and sat down with Powell in the secretary’s outer office. The White House’s senior director for African affairs, Cindy Courville, joined the meeting, along with several other senior American diplomats. Obiang was thrilled: “I feel as if I am meeting with President Bush himself,” he declared.21

  Obiang tried to explain to Powell and his aides the “complicated” situation his country faced because of its rough neighborhood and its distinctive status as the only Spanish-speaking country in Africa. He said Equatorial Guinea had been very poor in the past, but now enjoyed the benefits of being an oil producer. He wanted to move toward democracy, he explained. He also wanted the Bush administration’s help in “protecting U.S. investments in oil and natural gas” in his country. He pointed out that he had applied years earlier for a license to pay American trainers to increase the skills of Equatorial Guinea’s national police and armed forces, but so far he had been refused. He asked Powell to reconsider. He wanted to “modernize” his “military and security forces.” He wanted M.P.R.I., an American company, to take this mission on. Powell agreed to review the request.

  The secretary mentioned that he had “heard about” Equatorial Guinea’s “recent banking problems.”

  Obiang replied that the Riggs matter was “not very clear” to him. He explained the history of Equatorial Guinea’s deposits and dealings at the Washington bank. He had made these banking arrangements in part because “the U.S. oil companies stipulated they preferred to deposit oil payments into a U.S. bank.” Obiang said he had to personally approve every payment from the Equato-Guinean treasury, and therefore, he “did not understand the allegations that oil payments went to him personally.”

  The logic of the president’s explanation was not obvious. All Powell could think of to say was that the United States “supported” Equatorial Guinea in its “efforts to resolve these banking problems.” The secretary added that he hoped Obiang would use his country’s oil “windfall” to help his people, and that he would “get it right” and not repeat the mistakes of other African oil producers. Powell added, “We are here to be a friend and not to preach or lecture.”

  Amos Hochstein and his colleagues at the Cassidy lobbying firm saw the failed coup and the meeting with Powell as the opportunity their client needed to break out of Washington’s punishment box reserved for notorious African dictators. The American government coddled dictators in the Arab world, but authoritarians in Africa enjoyed less margin for error. The attitude of career foreign service officers at the State Department had long been, “This country doesn’t matter,” recalled one of Obiang’s advisers. “It’s a bunch of crooks running a dictatorship in the middle of nowhere.”

  Hochstein approached the White House. He proposed that the National Security Council come up with a “road map” of governance changes that, if implemented by Obiang, could create conditions for an expansion of American security assistance to the Malabo regime. Cindy Courville, at the National Security Council, was assigned to work on Cassidy’s proposal. The Bush aides laid out steps Equatorial Guinea would have to take to win American favor: prisoner releases, followed by substantial public investments in health care and education.

  The State Department prepared new “talking points” for meetings with Obiang’s ministers and representatives to outline concrete steps Equatorial Guinea could take on “human rights benchmarks” in order to win quick approval for the M.P.R.I. license to train the country’s still-notorious police and military. “As you know, this license was previously granted on a very limited basis, due largely to human rights concerns,” talking points written seven months after the coup attempt noted. “While we continue to have concerns, we recognize and applaud you for your leadership in making advances in this area. We are prepared to work with you and your Government to reach agreement on the conditions under which we could approve the license in its entirety.” The license would be “subject to a series of criteria and conditions” involving Equatorial Guinea’s human rights performance. State had already “discussed” the proposal with M.P.R.I., which had accepted it.22

  Separately, and even more quietly, the Bush administration encouraged Obiang to develop a commercial and security partnership with Israel, whose military and internal security specialists had developed a global business out of selling advisory, training, intelligence collection, electronic surveillance, and arms supplies to small, weak regimes in difficult places.

  As he processed these offers and developments in the coup attempt’s aftermath, Obiang “made an intellectual decision that the U.S. was not involved,” an adviser recalled. “He needed to believe that.” He was prepared by late 2004 to entrust his security to the United States and to Israel.23

  Cassidy scheduled a meeting between Obiang and Mel Gamble of the C.I.A. Obiang’s evolving plan was to have M.P.R.I. and Israeli forces work with his military and national police, but he also wanted to propose that the C.I.A. train Equatorial Guinea’s intelligence service to help protect against future coup attempts that might endanger American oil companies. The Bush administration, for its part, set aside its qualms: The administration approved the expanded M.P.R.I. license to provide internal security training to Obiang’s regime.

  Gamble met Obiang at The Pierre hotel in New York. Amos Hochstein, the Cassidy lobbyist, and an interpreter joined the meeting.

  “Yes, I think we can do this,” Gamble told Obiang, referring to the plans to strengthen Obiang’s security forces. “But you’ve got two issues. One is human rights. Two is, how are you going to pay for this?”

  Obiang answered that he understood the C.I.A. had enough money in its budget to pay for these sorts of intelligence training programs.

  Gamble was not about to recommend to his superiors at Langley that the C.I.A. divert budget funds from its global campaign against Al Qaeda to shore up the oil assets of a small-time dictator, even if ExxonMobil and other American companies might benefit. Gamble spoke some Spanish, but he turned now to the interpreter. “Tell the president that we’re just a small service with a small budget compared to the money that he has in his bank account.”

  “I’m not telling him that,” the interpreter said.

  “Look, tell him, or I’ll say it to him in my broken Spanish.”

  The interpreter started hesitantly. “My boss wants to say . . .”

  Obiang laughed. “Okay.” He understood, he said.

  “Mr. President,” Gamble said, “we’re in business.”24

  The next time coup makers cast eyes on Equatorial Guinea and the property of ExxonMobil, Marathon, and Hess—as they would, soon enough—they would reckon with new defenses. Other authoritarian leaders might have grown frustrated with all the human rights talk in Washington and moved on to a security and oil partnership with China or France by now. Obiang, however, believed that he would be more secure with the United States than with any other global power. Cassidy helped keep him tethered to Washington; Amos Hochstein resigned from the account, but others at the firm continued to work the White House and the State Department to deepen security and economic ties as much as possible. Instinctively, with the aid of his checkbook, and in spite of his prolonged resistance to American ideas about how he should organize his government and protect the rights of Equato-Guinean citizens, Obiang had found American assistance to change his regime—for the purpose of reinforcing it.

  Andrew Swiger had been rising rapidly through ExxonMobil’s management ranks when, soon after the coup attempt, he was selected by Lee Raymond and the Management Committee in Irving to explain the corporation’s dealings with Obiang to the United States Senate. Democratic staffers on the Senate’s Permanent Subcommittee on Investigations had been looking into Riggs for more than a year; they had scheduled a hearing to review and publicize their findings.

  Swiger had taken charge of Africa operations shortly after the Mobil merger. There was
almost nothing about ExxonMobil’s relationship with the Obiang regime that the corporation wished to discuss in public, other than its charitable campaign to fight malaria. Asked occasionally about its ties to a government with such a poor human rights record, ExxonMobil spokesmen repetitively and briefly stated that the company followed the law and condemned human rights violations “wherever they may occur.” The Riggs bank scandal had exposed many of the details of ExxonMobil’s financial ties to Obiang—its rental of land from regime officials, its investments in businesses controlled by Obiang relatives, and its funding of scholarships for elite Equato-Guinean children selected by the president. The Justice Department opened an inquiry into whether the corporation might be operating in violation of the Foreign Corrupt Practices Act (F.C.P.A.). Now Swiger would have to explain and defend ExxonMobil’s decisions.

  Early on the morning of July 15, 2004, he arrived on the third floor of the Dirksen Senate Office Building on Constitution Avenue, just to the north of the Capitol dome. Norm Coleman, a Republican from Minnesota who chaired the investigations subcommittee, gaveled the hearing to order at 9:06 a.m.

  Swiger read a prepared statement about ExxonMobil’s work in Equatorial Guinea. He explained why the corporation’s lawyers and executives had concluded after painstaking reviews that its investments in real estate and businesses in Malabo that were controlled by Obiang and his close relatives were legal under the Foreign Corrupt Practices Act and proper as a matter of corporate responsibility. Essentially, the corporation’s defense was that it was exempt from some of the normal F.C.P.A. requirements because in Equatorial Guinea, there was no market for local services other than that provided by the Obiang family. This was indeed an established defense to F.C.P.A. allegations in such circumstances. Equatorial Guinea “has no law limiting or even defining conflict of interest. Most ministers continue to moonlight and conduct businesses that often conflate their public and private interests,” a State Department cable from Malabo reported. “There are no arm’s-length transactions here.”25