Private Empire: ExxonMobil and American Power (70 page)

W
ayne Clark, an ebullient Texan, served as ExxonMobil’s country representative in Malabo as the Obama administration took office. ExxonMobil country managers typically rotated every few years; Clark’s predecessor in Equatorial Guinea, Jim Spears, had recently moved on to Angola. The corporation’s production from its offshore Zafiro field had leveled out to about 200,000 barrels per day, but at $80 per barrel, that still amounted to a business with about $5.8 billion in annual revenue. ExxonMobil maintained its low profile in Malabo; its elevated compound along the airport road had undergone none of the expensive renovations visible elsewhere in the capital after 2007. Oil workers shuttled to and from the corporation’s offshore platforms by helicopter and they moved in and out of Equatorial Guinea while interacting only minimally with local citizens.

ExxonMobil’s policy about working in Equatorial Guinea, approved by headquarters in Irving and distributed as talking points to public affairs officers worldwide, echoed the arguments that Anton Smith made in his cables to the incoming Obama administration. The policy was reflected in 2009 talking points on human rights that were issued for use when uncomfortable questions arose. The talking points reflected the evolution of ExxonMobil’s attitudes toward human rights matters since the days of the Aceh civil war, but also the continuity of its commitment to work with any government that would agree to acceptable legal contract terms, and that was not subject to prohibitive sanctions under American or international law. “We publicly condemn the violation of human rights in any form and actively express our views to governments around the world,” the prepared talking points said. “We have been dealing with these issues for many years and believe that our efforts improve the quality of life in communities where we operate. ExxonMobil is very concerned about human rights. However, we also believe that engagement enhances the cause of human rights far more than political isolation. Our practices are designed to ensure respect for human rights in our sphere of influence, which may by example have its effect on others.”
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It was in ExxonMobil’s interest for Obiang’s government to be able to defend itself from invaders. It was also in ExxonMobil’s interest for Equatorial Guinea to improve its reputation.

Simeon Moats, the former State Department official who worked on Africa policy in ExxonMobil’s Washington office, developed a PowerPoint presentation entitled “Business Practices & Transparency,” which described, in simple and graphic form, the corporation’s philosophy about the allocation of responsibilities in poor and troubled countries. ExxonMobil would contribute “taxes and royalties” as well as “transparency” to the host African government. The government would in turn take responsibility for the “rule of law, health, education” and the “business environment.” ExxonMobil’s disciplined, modern “business practices” could also strengthen the national economy. “What’s missing?” Moats’s slide presentation asked. One slide offered a troubling list in answer: rule of law, predictable regulations, the sanctity of contracts, transparency of transactions, an educated and healthy workforce, and basic infrastructure. This was the gap African governments would have to fill while ExxonMobil carried out its profit-making role and provided taxes and royalties in support.
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ExxonMobil had enough trouble trying to educate the African despots it worked with about the basic functioning of the global oil industry—persuading these leaders to emulate Singapore seemed unrealistic. When oil prices fell sharply after the global financial crisis of 2008, for example, ldris Déby, in Chad, accused ExxonMobil of deliberately holding down oil production to ride out the low prices. The charge lacked logic—ExxonMobil was suffering financially, too—but Déby was deeply suspicious of Stephane de Mahieu, Ron Royal’s successor as ExxonMobil lead country manager in N’djamena. Déby implied that ExxonMobil might be coming under pressure from “third parties” to hold down production so as to weaken Déby’s regime and aid the president’s enemies. ExxonMobil arranged a meeting between Déby and some of the corporation’s Africa hands in Washington. The ExxonMobil team “told Déby that it was firmly committed to maximizing its own profits, which implied maximization of production, and that ExxonMobil would not permit any pressure by any third party to change that policy,” according to an account provided later by De Mahieu. The team noted that ExxonMobil “had never abandoned operations despite Chad’s past political instability,” including multiple rebel invasions. Déby gradually backed off.

Nonetheless, as Moats’s PowerPoint suggested, there was one element of anti-oil campaigning after 2000 that aligned somewhat with ExxonMobil’s philosophy. This was the campaign for transparency about the management of oil revenues by governments. The underlying idea was that if citizens in poor countries had more information about how oil money flowed to their governments, they could improve governance and check corruption. The movement gained visibility as an initiative of George Soros’s Open Society programs under the rubric of “Publish What You Pay.” Later, with support from British Prime Minister Tony Blair and the government of Norway, it had evolved into a formal voluntary compact among governments, corporations, and nonprofit campaigners: the Extractive Industries Transparency Initiative. Under the initiative’s complex and voluntary rules, countries and companies each pledged to disclose publicly data about oil revenues and royalties in particular countries, and to engage with civil society groups about how the revenue would be used to benefit the public. In theory, at least, such transparency would reduce the ability of corrupt politicians to steal oil proceeds.

Soros had written to Lee Raymond about his ideas in 2002. Raymond took the approach seriously. Raymond disagreed with Soros about some of the campaign’s principles—he thought the Open Society approach was discriminatory and too far-reaching, particularly because it sought compliance from corporations that traded on stock markets but had no means to enforce the same rules against competitors that were privately owned. But under Tillerson, ExxonMobil developed formal positions about the transparency campaign through its issues management process, and it assigned a public policy manager, John Kelly, a thirty-year veteran of the corporation, to lead the effort. Kelly joined the Extractive Industries Transparency Initiative’s board of directors in 2007.

“We think it [membership in E.I.T.I.] helps demonstrate that we are opposed to corruption in any form and committed to honest and ethical behavior wherever we do business,” an ExxonMobil executive involved in the effort said. (The executive acknowledged, “I guess that message hasn’t sunk in with everyone.”) Kelly and other executives devoted extensive time and travel to organize the Equatorial Guinea regime’s candidacy for membership, which, if achieved, would provide the country with a rare seal of international legitimacy. In general, the ExxonMobil executive said, “We try not to get out in front of countries” on public policy issues, “so we are not going to go and bang on their door and say, ‘Okay, it’s time.’” However, because ExxonMobil itself had made a formal decision to participate, “we are willing to . . . talk to them about why we support E.I.T.I. and why we think this would be a good idea—and we certainly have done that in lots of countries, including Equatorial Guinea.”
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There was self-interest in this altruism: “If you are helping to hold a government accountable for the use of revenues,” the ExxonMobil executive continued, “that’s just helping to enhance the business investment climate in there, because you don’t have a lot of dissatisfied citizens that can find other ways of expressing their opinion about what’s going on in the government,” such as by joining insurgencies or coup plots. “And if in fact the government is using the money to benefit the citizens, that’s got to be for poverty reduction, for infrastructure, for lots of other things that help improve the investment climate.”
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Early in 2009, Equatorial Guinea’s prime minister, Ignacio Milam Tang, flew to Doha, Qatar, to attend the Extractive Industries Transparency Initiative’s annual conference and deliver a speech at the Ritz-Carlton hotel. He spoke in a plush, wood-paneled conference room, at a lectern embossed with the luxury hotel’s emblem. Transparency activists; government officials from Europe, Africa, and Central Asia; and oil and mining company executives made up the audience. Tang wore a dark suit and put on reading glasses to see his text. “I have come here to assert the commitment of our president and our people to abide by the commitments” made to the Transparency Initiative regarding Equatorial Guinea’s disclosure of oil revenues. He described his country’s history and the impact of the oil boom on national life and wealth. “A lot of work needs to be done,” he said. “But we are confident we will meet a fruitful success.”

The political scientist Benedict Anderson compared nation-states to “imagined communities.” In the case of Equatorial Guinea, by 2009, there were several. There was the country that seemed normal and functional enough to dispatch a prime minister to a conference in Qatar to read a speech that pledged adherence to international treaty norms. This was the Equatorial Guinea preferred by—needed by—ExxonMobil and other hopeful supporters of the Obiang regime. The country they imagined had a difficult past but was gradually mustering the will to improve and normalize. There was also the Equatorial Guinea imagined by the British mercenary coup leader Simon Mann, his coconspirators, and the security consultants from Israel and M.P.R.I.—a place that resembled less a nation-state than a museum housing crown jewels, but one lacking robust fencing, alarms, and armed guards.

There was also the Equatorial Guinea known by most of its citizens and internal political contestants: a family-run enterprise dominated by a particular mainland clan of the Fang ethnic group and presided over by an aging godfather who ruthlessly punished usurpers. The norms of this Equatorial Guinea—the family business—did not conform to the norms of the Transparency Initiative. As Anton Smith wrote in one of his cables to Washington, “Among the Fang, family comes first.”

P
resident Obiang acknowledged fathering forty-two children. Of these, two sons, Teodorin (“Little Theodore”) and Gabriel, wielded the most influence by 2009. They had different mothers. Teodorin’s, who was referred to as Obiang’s “church” or formal wife, belonged to an Equato-Guinean family that had risen alongside the president during the early oil era, grabbing up land and businesses. Gabriel’s mother came from the tiny neighboring island nation of São Tomé; she suffered from the lack of prestige that arose from being a foreigner. By kinship and political tradition, Teodorin, therefore, was the son who had the most natural claim to succeed his father as president, should his father’s health ever falter. The heir showed little interest in education or government work, however. Gabriel, on the other hand, had returned from college in the United States as a well-spoken, serious young man adept at PowerPoint presentations and the vernacular of international oil and gas deals. He told oil industry representatives that he had been influenced, in thinking about Equatorial Guinea’s future, by the American film
Field of Dreams
and its spiritual catchphrase “If you build it, he will come.” Gabriel hoped to construct an oil-led development strategy that would help the country develop a technically competent middle class and a more diverse economy akin to Singapore’s. ExxonMobil’s, Marathon’s, and Hess’s representatives fantasized that Gabriel might emerge as Obiang’s successor as president and lead a final drive toward modernization, protecting their investments along the way. But Gabriel lacked the Fang clan base necessary to secure his rise in politics. As one student of the country and the region put it coldly: After President Obiang’s death, Gabriel was more likely to be assassinated than promoted.
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That left Teodorin, the first son, who had been born on June 26, 1969. As he entered middle age, he was a broad-shouldered man with dark chocolate skin and puffy cheeks, who had developed a taste for luxury goods and properties. Before oil, Equatorial Guinea’s most lucrative resource was the lumber in its jungle forests. Teodorin’s mother secured an appointment for her son as minister of agriculture and forestry; in that capacity, he told American officials, he was “granted” a concession to sell timber. During the 1990s, a Malaysian contractor retained by Teodorin brought in forty teams of lumberjacks who clear-cut and shipped out whole logs to Asian markets, leaving the minister with a multimillion-dollar grubstake while he was still in his twenties. Later, his family’s access to Equatorial Guinea’s oil wealth evidently enriched him further, although despite the Transparency Initiative, Obiang never made clear exactly how he allocated “national” revenues to Teodorin or other family members. What seemed plain was that as he neared middle age, Teodorin had easy access to many tens of millions of dollars. He began to travel and to spend.

By 2007, according to investigations by the U.S. Immigration and Customs Enforcement division and French police, Teodorin’s international property holdings included two luxury speedboats; a Gulfstream V private jet valued at $38.5 million; and a collection of almost three dozen luxury cars, including two $1.5 million Bugatti Veyrons, a $990,000 Maserati MC12, a $530,000 Rolls-Royce Phantom, a $256,000 Ferrari 512M, a $213,000 Ferrari 550 Maranello, and a $115,000 Maserati Coupe F1.

When American investigators came into possession of a check register from one of Teodorin’s California companies, Beautiful Vision Inc., they encountered the following list of expenditures for a single month: $82,900 to Naurelle for furniture; $137,313 to Ferrari of Beverly Hills; $63,326 to the Soofer Gallery for a carpet; another $332,243 to Ferrari of Beverly Hills; $51,288 to Dolce & Gabbana; $121,977 to Fields Piano; another $50,000 to Ferrari of Beverly Hills; another $59,850 to the Soofer Gallery; $280,409 to Autostar Signature for another Ferrari; $338,523 to Lamborghini Beverly Hills; and $181,265 to GlobalJet Corp.
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