Visits to Malibu by Equatorial Guinea's dictator-in-waiting may be coming to an end. On Friday, a federal judge approved a settlement in the Justice Department's civil suit against assets belonging to Teodoro Nguema Obiang Mbasogo, the second vice president of Equatorial Guinea and the first son of the country's president, Teodoro Obiang Nguema Mangue. The settlement, under which Obiang will forfeit approximately $30 million in property held in the United States (including an estate on fifteen acres in Malibu, a Ferrari, and items from an extensive collection of Michael Jackson memorabilia), ends one of the more prominent--and challenging--cases filed by the Justice Department in recent years under its Kleptocracy Asset Recovery Initiative. As part of the settlement, the Justice Department dropped its efforts to seize additional property that is believed to be located in Equatorial Guinea, including a Gulfstream jet and the bulk of the memorabilia collection.
The Malibu home, purchased in February 2006 by a shell corporation controlled by Obiang, has been a primary focus of attention for journalists, human rights and anti-corruption organizations, and Justice Department attorneys. It was purportedly the scene of lavish parties when Obiang was in residence. It was also the home base for Obiang's American fleet of luxury automobiles. Obiang is said on occasion to have chosen which car to drive (from among Ferraris, Bentleys, and Bugatti Veyrons, among others) based on whether a particular car matched his wardrobe for the evening.
In its suit, the Justice Department alleged that Obiang purchased the Malibu estate, the cars, the jet, and the Michael Jackson memorabilia with the proceeds of corrupt business dealings in Equatorial Guinea. Obiang's father gave him control over the state's large timber holdings while also making him Minister of Forestry and Agriculture. Corporations doing business in Equatorial Guinea have long complained that they are forced to pay bribes or kickbacks to government officials and that none is worse than Vice President Obiang. President Obiang has also been accused of amassing a vast personal fortune by treating the proceeds of Equatorial Guinea's oil leases as his own personal income, but he has been somewhat more discreet in his overseas spending. This, at least, has been true since a congressional hearing in 2004 revealed that Obiang family accounts in the now-defunct Riggs National Bank in Washington, D.C. totaled over $700 million. Riggs was forced to merge with a rival bank after a record-setting fine was levied against by federal regulators for its failure to report the large cash deposits made by the Equatorial Guinean embassy on behalf of the Obiang family.
The settlement announced on Friday does not end Obiang's legal problems. He faces criminal charges in France in a case popularly called biens mal acquis, or ill-gotten goods.
For more on the settlement, see this story in the Los Angeles Times story or this piece on the CNBC website.