Equatorial Guinea tests Obama vow to hold African leaders accountable

Unusual transfers of large sums of money tied to the Obiang family also led to a 2004 US Senate sub-committee investigation into the Washington-based Riggs Bank where the family had held balances of up to $500 million.

The investigation found that millions of dollars in cash had been brought into the bank in plastic wrap and suitcases to be deposited into the Obiang accounts with few questions asked, according to the Department of Justice records. Riggs pled guilty for failure to report suspicious transactions involving the government of Equatorial Guinea as well as former Chilean dictator Augusto Pinochet and was fined $16 million, the largest penalty ever levied under the Bank Secrecy Act.

Oil firms say they aren't responsible

Oil companies were also investigated in the Riggs Bank scandal and later in an SEC inquiry into their actions in Equatorial Guinea. One of only two companies to grant a phone interview for this report was Devon Energy Corporation, which suspended its operations in Equatorial Guinea in 2008.

"Devon complies with the US government's expectations in how we should conduct ourselves in foreign countries and with foreign governments," said Devon spokesman Chip Minty. "I don't believe US companies can be held responsible for the actions of foreign governments."

Richard Horstman, assistant general counsel for the Marathon Oil Corporation, which counts on Equatorial Guinea for about a quarter of its oil and gas production, says he is also not satisfied with how far the Equatorial Guinea government has come in terms of transparency. "It is our hope, as well as the hope of the world, that better transparency will result in better governance," Mr. Horstman said.

He says the company is trying to train more local people in hopes of developing a middle class and that it has been cooperative in all investigations.

Other US-based oil companies such as Exxon Mobil, Chevron, Vanco Energy, and Amerada Hess remain major investors in Equatorial Guinea, but refused comment.

A window of opportunity for the US?

Mr. Pham says that now is a ripe opportunity for the US government to wield its influence.

"The administration would do well to leverage opportunities like Equatorial Guinea's membership in the Extractive Industries Transparency Initiative and its desire for enhanced relationship with the US to help facilitate positive trends," Pham said.

The Extractive Industries Transparency Initiative is an international set of standards that the Equatorial Guinea government has signed but on which it has made "only modest progress," according to the International Monetary Fund.

Ganesan says he would like to see the US government draw up new laws and regulations that would require companies to disclose how much they are paying governments like Obiang's.

While the Bush administration sought to strengthen ties with Equatorial Guinea and then Secretary of State Condoleeza Rice called President Obiang "a good friend," it is not yet clear exactly what approach President Obama will take.

Ganesan says he remains hopeful.

"Equatorial Guinea was for many years flying under the radar. People didn't know how severe the problems were there, and by exposing them we hope that this will really create momentum for reform," Ganesan said, "We think that there is a real opportunity in Washington to do that."

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