On October 6th, 2011, the Justice Department filed a lis pendens suit seizing some assets belonging to Teodoro “Teodorin” Nguema Obiang Mangue, son of Teodoro Obiang Nguema Mbasogo, the current president of Equatorial Guinea.  The $70 million worth of possessions in the summons include the following: a white crystal-covered “Bad Tour” glove and other Michael Jackson memorabilia, a Gulfstream Jet, real property in Malibu, a Bentley, a Bugatti, a Lamborghini Murcielago, three Rolls Royces, and a Ferrari.  While such purchases may seem completely ordinary for a wealthy celebrity, Teodorin is the Minister of Forestry and Agriculture of Equatorial Guinea and earns an annual government salary of about $81,000.

So how does Teodorin finance his lifestyle?  Some look to the “tax” he added to each cubic meter of wood harvested from the country, payable directly to him.  Although his oversight of the logging industry has led to the “rapid depletion of forest resources,” Equatorial Guinea, sub-Saharan Africa’s third-largest producer of oil, pumps about 346,000 barrels of oil per day.  Therefore, Equatorial Guinea should still have a thriving national economy. However:

With a nominal per capita GDP of $36,600, according to U.S. government data, Equatorial Guinea’s 650,000 people could be enjoying living standards comparable to people in France (per capita GDP of $33,100) or Germany ($35,700). Instead, many Equatoguineans lack access to clean water or modern sanitation.

In a 2010 opening statement to the Permanent Subcommittee on Investigations Hearing on Keeping Foreign Corruption Out of the United States, Senator Carl Levin addressed the hypocrisy in trying to fight corruption abroad while ignoring the existence of domestic support for corrupt dictators.  He stated that after conducting “more than 100 interviews, view[ing] millions of pages of documents, and trac[ing] millions of dollars,” the Subcommittee found, among other things, that Teodorin used the help of two lawyers to create five shell companies, for which he opened accounts at multiple banks.  Of the money some U.S. banks would not accept, millions were wired into attorney-client accounts.  Two real estate agents helped Teodorin buy and sell his properties in California.  Levin pointed out that “U.S. regulations currently exempt both real estate and escrow agents from any requirement to establish anti-money laundering programs, a loophole through which Mr. Obiang poured millions of dollars in suspect money.”

Levin closed his statement with several recommendations for the United States government, including greater screening restrictions before allowing foreign officials to set up bank accounts and companies, strengthening bank oversight of foreign wire transfers, using visa and immigration policies as a basis for keeping corrupt foreign officials out of the United States, and working with the private sector to battle corruption.

Some of these suggestions aren’t so novel.  In 2004, former President George W. Bush issued Proclamation 7750, which bars corrupt foreign officials from obtaining visas to the United States.  In a 2009 speech to the Ghanaian Parliament, President Obama denounced corruption and promised to work to enforce Bush’s proclamation, stating “we have a responsibility to support those who act responsibly and to isolate those who don’t.”  In July of 2010, Attorney General Eric Holder introduced the Kleptocracy Asset Recovery Initiative, “aimed at combating large-scale foreign official corruption.”  A few months later, the White House released a G-20 fact sheet on a Shared Commitment to Fighting Corruption, detailing a comprehensive plan to combat corruption, including “denying safe haven to kleptocrats and proceeds of corruption.”

However, authors and journalists have been writing about Teodorin for years.  Frustrated, they point to evidence of decades of corruption in Equatorial Guinea, and even to Justice Department and Immigration and Customs Enforcement (ICE) documents from as early as 2007, detailing investigations that found the Obiang family had “engaged in transactions consistent with foreign official corruption.”  At least one American financial institution, Riggs Bank, faced criminal violations in 2004 for accounts it held for the Obiangs (and also for Chilean dictator Augusto Pinochet).  As a result of these investigations, the Obiangs’ accounts at Riggs were closed, and the bank was eventually sold off at a huge discount.  But the $700 million in the accounts were wired elsewhere.

So how did Teodorin obtain a visa into the United States, and why is he still here?  Former and current State Department officials identify oil-rich Equatorial Guinea’s importance to American companies like ExxonMobil, Hess, and Marathon in explaining the “lax enforcement” of the visa restrictions.  Others point to the difficult and time-consuming nature of investigating kleptocracy, especially for the overburdened federal investigators working on over 80 domestic and foreign cases currently assigned to the Kleptocracy Asset Recovery Initiative.  Furthermore, prosecutors must meet a high burden of proof in linking the stolen assets to corrupt behavior.

While the Obiang family represents the most glaring example of international failure to effectively address corruption, several more exist: Abdelaziz Bouteflika of Algeria, Ali Abdullah Saleh of Yemen, Ilham Aliyev of Azerbaijan, Islam Karimov of Uzbekistan, and Than Shwe of Burma, to name just a few, have all used other countries’ financial systems to support the diversion of illegally obtained funds.  Although the recent Swiss seizure of the accounts of Tunisian dictator Zine el-Abidine Ben Ali and Egyptian President Hosni Mubarak deserves recognition, a stronger promotion of democracy and transparency would result from a seizure of assets while these dictators still wield power, “when it might change their behavior.”  Corrupt leaders are able to remain in office due to the cooperation of domestic financial institutions, and the lack of regulation of this relationship until after deposal only incentivizes dictators to hold onto power and wealth more tightly.

In the meantime, Teodorin remains free to continue to make mass purchases, export assets that the Justice Department hasn’t yet seized, and exploit American workers.