The Crude Politics of Trading Oil

Strange things happen around here when a country discovers oil.

For most of its 34 years of independence, Equatorial Guinea was best known for the outlandish brutality of its rulers, which left the tiny West African country isolated on the international stage.

Then in the mid-1990s, American oil companies found vast oil reserves there and Washington quickly took notice. Two years ago, Rep. William J. Jefferson (D-La.) led the first congressional delegation there. The Bush administration, faced with heavy lobbying from the oil industry and eager to reduce U.S. dependence on Middle East oil, reopened the U.S. Embassy in Equatorial Guinea, which was shuttered in 1995.

Now, the U.S. is Equatorial Guinea’s major trading partner and the country will soon become sub-Saharan Africa’s third-largest oil producer behind Nigeria and Angola. African countries already provide the United States with about 15% of its oil, nearly as much as Saudi Arabia, and that figure could grow to 25% by 2015, according to the National Intelligence Council, a panel of intelligence officials and outside experts that studies global trends and reports to the director of the CIA..

It all sounds like a successful case study of how Washington and U.S. corporations, faced with turmoil in the Mideast and a potential war in Iraq, have been aggressively seeking out new suppliers of oil.

There’s just one problem: Equatorial Guinea is headed by an embarrassingly corrupt government with a notorious human rights record.

That’s made it difficult for the Bush administration to openly embrace its president, Brig. Gen. Teodoro Obiang Nguema Mbasogo, so he and his oil industry supporters have lined up Beltway lobbyists and assorted hangers-on to press Washington for improved ties. Equatorial Guinea doesn’t need foreign aid -- thanks to oil, the long-impoverished nation could become the world’s richest country in per capita terms within the decade -- but it does want to be treated with respect by the U.S. and shed its pariah status.

Meanwhile, the regime’s opponents, some with political handlers of their own, have been parading through town to offer themselves to the State Department and other agencies as more palatable alternatives to Obiang. “There’s a recognition on the part of opposition leaders that Washington is now paying much closer attention to Equatorial Guinea and it will serve them well if they keep people here informed,” said Christopher Fomunyoh of the National Democratic Institute, the foreign policy arm of the Democratic Party.

The backdrop for all this maneuvering is Equatorial Guinea’s Dec. 15 presidential election. It’s pretty much a foregone conclusion that Obiang, who took power in a 1979 coup against his uncle, will rack up an overwhelming if questionable victory at the polls. In 1996, the only time he faced voters, Obiang won with 99.2% of the vote in this country of 500,000 people.

U.S. relations with Equatorial Guinea have long ranged from cool to outright chilly. In 1993, U.S. Ambassador John Bennett received a death threat in an anonymous note sent, he believed, by a high-ranking official in Obiang’s government. Two years later the Clinton administration closed the U.S. Embassy in Malabo, the capital.

There has been little ground for improved ties since then. The country’s human rights record is still considered abysmal and much of Equatorial Guinea’s new oil wealth appears to be finding its way into the pockets of the president and his cronies. In 2000, Obiang bought two mansions in the Maryland suburbs outside of Washington. The bigger estate cost $2.6 million and has 10 bathrooms, seven fireplaces and a 3,500-square-foot club room.

But by last year U.S. firms -- led by Exxon Mobil Corp., ChevronTexaco Corp. and Triton Energy -- had a substantial stake in Equatorial Guinea. They have invested a collective $5 billion in the country and have been lobbying for strengthened relations with the United States.

That effort was coordinated by Dallas-based Triton, a firm with close ties to the Bush administration. When Triton’s chairman, Tom Hicks, bought the Texas Rangers from George W. Bush in 1998 when the latter was Texas governor, Bush made a substantial profit. Federal Election Commission records show that Hicks has personally contributed more than $125,000 to Bush and the Republican Party’s national committees during the last three years.

In mid-2001, a Triton lobbyist sent a memo to President Bush urging the administration to take a new look at Equatorial Guinea. “It is important to underscore that most of the oil and gas concessions awarded in Equatorial Guinea to date, have been awarded to U.S. firms,” the memo said. “This is in stark contrast to neighboring countries in the region, where the United States has consistently lost out to French and other European and Asian competitors.”

A few months later, the administration quietly decided to reopen the American Embassy. A U.S. official, speaking on the condition of anonymity, said it had been closed in 1995 because of human rights and budget concerns. But since the discovery of oil, U.S. investment and the number of U.S. citizens living and working there have increased steadily.

“There are over 1,500 Americans there and that number is expected to increase as the oil companies increase their involvement,” the official said. The U.S. government continues to have human rights concerns, and given the growing American presence it was deemed prudent to reopen the embassy, the official said.

Even as Triton was heading the lobbying campaign, company officials were negotiating the firm’s sale to Amerada Hess for $2.7 billion. The new owner’s bottom line is closely tied to its operations in Equatorial Guinea.

Amerada Hess produces 39,000 barrels a day there, more than it does anywhere else except for the U.S. and Britain. Chief Executive John Hess recently said that a majority of the company’s production growth over the next three years will come from Equatorial Guinea.

Not surprisingly, Amerada Hess continues to be at the forefront of the corporate lobbying for Obiang. To handle that task, the company retains Washington lobbyist Riva Levinson of BKSH & Associates, whose clients have ranged from an Angolan rebel group and Iraqi opponents of Saddam Hussein to an association of medical colleges and PBS.

Obiang’s regime has its own hired help as well. For several years, it has paid for the services of Bruce McColm, head of a nonprofit group called the Institute for Democratic Strategies. According to its nonprofit tax filings, the Institute received $212,442 from the Obiang government in 2000.

McColm, a former director of Freedom House, denied being an advocate for the Obiang government, saying he is simply helping the country build its democratic institutions. But two years ago, McColm sent a team of observers to monitor Equatorial Guinea’s municipal elections, reporting them to be basically free and fair. A United Nations report, on the other hand, found that the campaign “was characterized by the omnipresence of the [ruling] party, voting in public and the intimidating presence of the armed forces.”

Charles Lewis, director of the Center for Public Integrity, a Washington watchdog group, said oil is driving U.S. policy. “That’s the only reason that this obscure country has come on the administration’s radar screen,” he said. “The U.S. gets a new source of oil and some of the president’s friends get rich.”

Still, the administration has been reluctant to become too cozy with Obiang. Because of his government’s poor record on political rights, Equatorial Guinea remains barred from receiving special trade benefits offered to most African states under a bill passed by Congress in 2000. So are 12 of the 48 other sub-Saharan African nations that would be theoretically eligible for the trade benefits

The State Department’s most recent report on worldwide human rights said the country’s security forces “committed numerous, serious human rights abuses,” including torture and beatings, and that citizens “do not have the ability to change their government peacefully” in fair elections. “We are concerned about the human rights situation in Equatorial Guinea,” said Pamela Bellamy, the State Department’s desk officer for the country. “It is a real issue for us.”

Despite requests from Obiang, he has never met with Bush or Secretary of State Colin L. Powell. “Any foreign leader wants to be able to see the president when he comes to Washington,” said one former State Department official, who asked not to be identified. “We’re managing the relationship with Equatorial Guinea at the assistant secretary level, which is a real insult.”

That distance has encouraged four would-be Guinean presidents to come to Washington to press their respective cases with the Bush administration. Among them is Gustavo Envela, whose family fled into exile in 1970 and settled in Oregon.

Envela now lives in Los Angeles and doesn’t have much of a political history. His resume boasts cameo roles in movies such as “Sgt. Bilko” and an appearance on the TV game show “Wheel of Fortune.” Envela has only been back to Equatorial Guinea twice, for a total of less than two weeks, most recently in 1990.

Envela got help scheduling his Washington agenda from Robert Kelley, a lobbyist and onetime deputy Senate legal counsel. He has also been seeking advice from ex-Clinton advisor James Carville and has been working with Warren Weinstein, formerly of the U.S. Agency for International Development and now at AfricaGlobal, a Washington organization whose past clients include Obiang.

Adolfo Obiang Biko, who lives part-time in Virginia has also been in to see the State Department. A leader of the national movement that won independence from Spain, Biko quickly ran afoul of the new government and has lived abroad for more than three decades.

Biko was accompanied in the capital by his friend Frank Ruddy, who served as U.S. ambassador to Equatorial Guinea under President Reagan. “Obiang is an absolute thief and he heads a government of thieves,” said Ruddy, who said he was not paid for his help. “I’d like to see something good happen over there and Adolfo is someone who is worth listening to.”

In early November, a third man was making the rounds, Celestino Bacale of the Convergence for Social Democracy (CPDS), the country’s only genuine opposition party (and the only one of the four who lives in Equatorial Guinea). Its leader, Placido Miko, was one of dozens of people sentenced to prison earlier this year on charges of coup plotting.

Amnesty International described the court proceedings against Miko and others as “an unfair trial where no evidence was presented against any defendant, many of whom have been tortured to extract confessions.”

Bacale, his party’s presidential candidate, said he had productive meetings here, but suspects that the Bush administration cares more about Equatorial Guinea’s oil than it does about human rights. “None of the oil money is getting to the people,” he said. “It just allows the government to live well and to repress the people.”

The latest would-be Guinean president to come to town, arriving in late November, was Severo Moto, a Madrid-based exile. He retained Victoria Butler, an independent consultant, to help him navigate the capital.

In 1996, Moto tried to organize a coup against Obiang from Angola. Authorities there learned of the plan and detained Moto and a small group of Guineans, Spaniards and Russians. They also seized a ship donated to the group, Moto said, by an Italian businessman who had a business deal with Obiang turn sour.

Moto spent a month in jail in Angola and then was allowed to return to Spain. “I went to Angola to seek liberty for my people,” said Moto. “I came to believe that the only way that Obiang would leave office was by force.”

Now, Moto is pushing for free and fair elections in Equatorial Guinea, although he is dubious about that possibility.

The State Department’s Bellamy said there is nothing unusual about all the meetings with Guinean oppositionists. “It’s a country where there is a considerable amount of U.S. investment and where many U.S. citizens work, so it’s logical that we would be seeing them [opposition figures],” she said. “They’re talking to us about what they think about the situation there and what they have to offer.”

J. Stephen Morrison, who formerly was responsible for African affairs on the State Department’s Policy Planning Staff, said talking with the opposition also serves to put Obiang on notice. “It’s a pretty unsavory regime and no one has any illusions about that,” he said. “That sort of rule tends to be unstable and you spread your risks around by talking to different types of people.”

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Times staff writers Sonni Efron and Mark Fineman contributed to this report.