Securities and Exchange Commission probes dealings in Africa

Dec 18, 2004 01:00 AM

by Ken Silverstein

Six years ago, the president of Equatorial Guinea was invited to invest in a promising venture with one of the US oil giants tapping his tiny nation's reserves.
Mobil Oil offered the West African leader a stake in an oil trading business for $ 2,300, according to documents the company filed with a Senate subcommittee that were released in November. Now, the company says, that stake is valued at about $ 645,000.

Mobil, now part of ExxonMobil, was not alone in sharing the wealth with President Teodoro Obiang Nguema Mbasogo, whose regime has been accused of massive corruption and human rights abuses.
Business ties between Obiang and seven US oil companies, including real estate leases and investment in energy production facilities, are the subject of a probe by the Securities and Exchange Commission, according to the companies and lawyers familiar with the investigation.

Attorneys familiar with the Foreign Corrupt Practices Act say the investigation involves the broadest examination of the oil industry's overseas practices since the law was passed in 1977.
Under the Foreign Corrupt Practices Act, American companies can do business with government officials but are not allowed to provide anything of value to anyone who can misuse a position of power to help them obtain or retain business.

ExxonMobil, Amerada Hess, Marathon Oil and ChevronTexaco said their activities in Equatorial Guinea complied with the Foreign Corrupt Practices Act.
Three other companies under investigation, CMS Energy, Noble Energy and Devon Energy, declined to comment, as did Equatorial Guinea's embassy in Washington and Riggs Bank.

Source: Los Angeles Times
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