The Wonga Coup (8 page)

The country has a tiny population – at a squeeze you could fit everybody into a large football stadium – and lots of oil. Per person, Equatorial Guinea pumps more oil than Saudi Arabia. That should mean good times for all. In 2002 Obiang promised just that: ‘Like the Scriptures say when the Pharaoh of Egypt had a dream of lean cows and fat cows, we have passed the time of lean cows that represent hunger, and we are now in the time of fat cows which is prosperity.' Instead, a few at the top take most of the wealth, which – though bad news for most Equatorial Guineans – makes it all the more tempting for others to seize power.

To give an idea what sort of wealth is at stake, consider how Nigeria's leaders have prospered next door. Since 1965, when the black stuff began to flow seriously, Nigeria has earned over $350 billion. That should have helped develop the rest of the economy. Instead, much of the oil revenue has gone straight into the pockets and bank accounts of corrupt civilian and military leaders. Today Nigeria pumps nearly 2 million barrels of oil a day, and is the largest producer in sub Saharan Africa, though its booming population remains one
of the poorest anywhere. It is a similar story in Angola, the next largest producer, with roughly half that annual output. Angola's leaders long plundered at least a billion dollars a year from oil revenues, says the International Monetary Fund. Tiny Equatorial Guinea is a more recent player: the oil began to flow in serious quantities only at the end of the 1990s. But already it is the third largest exporter, pumping out nearly a barrel of oil for each of its citizens, every day. ‘Equatorial Guinea is run like a family business. It is a micro state, a flea in the armpit of Africa,' explains an African oil consultant. ‘But this flea is now getting dimensions. They are aiming for a small Emirates-style country, with a king and his family running it.'

It is astonishingly venal. Obiang is evidently corrupt. Fond of straw hats and playing billiards, his taste is otherwise for the excessively expensive. In 2004 he bought a Boeing 737-700, one of six personal planes, for $55 million. This one has a kingsize bed, a state-of-the-art satellite communication centre and – the classic despot touch – a large bathroom with gold-plated fittings and door handles.

Apologists cannot excuse Obiang as a poorly educated man, or as someone with dreadful experience of colonial rule. He studied in the United States at Cranbrook Academy of Art, Bloomfield Hills, Michigan (although Cranbrook would probably rather forget their notorious alumnus). Nor is there an excuse for his eldest son and likely successor, Teodorin. A playboy, Teodorin spent years dabbling as a rap music entrepreneur in California, and then became a government minister. He has a fleet of sports cars in Paris, where he lives in a luxury hotel for much of the year. He once invited French journalists to watch him buy thirty tailored suits and race around the French capital in one of his Lamborghinis.
In June 2005 Obiang blithely told an American journalist that ‘one hundred per cent of the oil revenues are being used for programs for the people'. The next month Teodorin bought three luxury cars – another Lamborghini and two Bentleys – to park at his $4-million holiday home in Cape Town. He spent roughly a third of Equatorial Guinea's $13-million-odd annual education budget on a holiday home and some cars.

The family also bought mansions in the United States and stocked other international bank accounts. Land and many businesses became the personal property of the ruling family: these were then leased out, or used to generate contracts, for suspiciously large private payments from American and other oil companies. Almost anybody who has spent time in the country has concluded that graft, from the president down, is deeply embedded. In 2005, Transparency International, the anti-corruption watchdog, said businessmen and other observers found only one African country, Chad, more corrupt.
Tropical Gangsters
– the title of an excellent book on the country by Robert Klitgaard – nicely describes Obiang's ruling clique. Aid groups like Médecins Sans Frontières, and donor organisations such as the World Bank, have long refused to work there because of graft.

Supply is assured. Nor is there any risk that demand will dry up. Chinese buyers are frantic in their search for African oil. They have secured long-term contracts for oil in Angola, Gabon, Sudan and elsewhere. They are buying a rapidly rising share of Equatorial Guinea's output, and the leaders of the two countries are close allies. (While few European countries have an embassy in Malabo, China has a large complex there.) As important, the United States, whose oil firms dominate production in Equatorial Guinea, is increasingly keen on African oil and gas. Whereas the United States was all but self-sufficient
in hydrocarbons half a century ago, it depends ever more on imports. But too much comes from the ever-troubled Middle East. Lessening dependence on one region by getting more oil from relatively nearby west Africa (and elsewhere) is a smart policy. It should mean a more secure supply of the black stuff. It also means no shortage of buyers for Equatorial Guinea's oil.

Thus, senior Africa officials in the United States administration talk of Africa, especially the Gulf of Guinea, providing as much as a quarter of all American oil imports within a couple of decades. African supplies of Liquefied Natural Gas will also help to meet rising American demand. Marathon Oil, an American firm in Equatorial Guinea, has invested billions of dollars developing an LNG plant to export 60 million tonnes of gas directly to the south of the United States. A British firm, BG, will ship the refrigerated gas over the Atlantic. That contract alone is thought to be worth $15 billion over some seventeen years. A Marathon executive told an oil conference in Cape Town in 2004 that Europe and North America are increasingly dependent on foreign supplies of gas. The two regions will soon need combined imports of 21 trillion cubic feet of gas a year. West Africa's proximity to both markets makes it an important supplier, and Equatorial Guinea is bidding to become a hub for the region's gas exporters.

Obiang might at least get credit for overseeing the oil boom in his country. For several years Equatorial Guinea's economy grew faster than any other country's – and much faster than the African average. But this hid a big problem. It only grew fast because it was so wretchedly poor in the first place. The oil industry developed twenty years later than in the rest of the region, largely because the government was incompetent. Worse, the terms struck with the oil firms were dreadfully
skewed against Equatorial Guinea. At the beginning of the new century Total, a French oil firm, paid Nigeria $8 for each barrel of oil pumped from a field straddling the sea border with Equatorial Guinea. Exxon, exploiting the same field but from the Equatorial Guinean side, paid a mere $3 a barrel. Unsurprisingly, Exxon said that field was one of the most profitable in the world. Exxon enjoyed terms of business, at least in the early years, that were exceedingly generous. Yet the oil firm says it took eight years to recover costs in Equatorial Guinea's large Zafira field, a timespan that looks suspiciously long to some oil experts, given a rising oil price and rapidly rising output.

Though the government had earlier gathered taxes and royalties on oil, it was only in 2004 that it began to get its own direct (and more valuable) share of production. The long delay while Exxon recovered its initial costs ended that year, marking a moment when oil funds would pour especially fast into government coffers. If Equatorial Guinea looked promising to a mercenary as the first oil flowed, by 2004 it seemed to burst with opportunity. You could almost hear exiled politicians and hired guns licking their lips.

‘A good and honest man.'

Simon Mann on Severo Moto

By 2003, ten years after the battles at Soyo and the birth of Executive Outcomes, Mann was restless. He was looking for the main chance. From South Africa he made contact with a suave property developer in London called Gary Hersham. Another old friend and businessman, Greg Wales, was also in touch. The three turned their attention to oil-rich west Africa, in particular to Gabon, a small and relatively wealthy country. In January they arranged to meet President Omar Bongo in Libreville, Gabon's capital. Hersham wanted contracts in construction, Wales offered financial services and Mann thought he might train and support Gabon's military. But Bongo turned them down. Frustrated, Mann flew to London, where Hersham suggested he meet another businessman, a man with excellent contacts in west Africa who could offer some advice. Mann agreed.

Mann met the tycoon Ely Calil roughly a week later. A recluse of Lebanese–Nigerian origin, who says that he has no connection to the coup plot, Calil rarely gives interviews, but an individual who talked to him briefly about the Wonga Coup described him as ‘small and quite worn … [with a]
Levantine look, but he's not a flamboyant character … He's very sophisticated and quietly spoken.' Born in northern Nigeria, Calil had flourished as a trader, supplying Nigeria's army with basic goods. He later invested in property and then traded oil. In 2004 the
Sunday Times
estimated that Calil had a fortune worth £100 million (roughly $180 million), including a mansion in Chelsea.

Calil's business life is not transparent. In June 2002 he was arrested in Paris while travelling on a Senegalese passport. Investigators were looking into a massive case of corruption that involved the French state oil company Elf-Acquitaine (now part of Total), as well as crooked French and African politicians. Eventually more than thirty people were convicted and jailed in France for using oil company slush funds worth $300 million to bribe African politicians. Calil was questioned about payments in the mid 1990s of millions of pounds from Elf-Acquitaine to the (then) dictator of Nigeria, Sani Abacha. He denied any wrongdoing or involvement in the scandal. The police released him without charge in the absence of any evidence against him.

His political connections are impressive. He is said to be close to one of the most powerful politicians in Nigeria, Ibrahim Babangida, who was president for eight years. And he has cultivated ties with the Senegalese president, Abdoulaye Wade. According to one intelligence source Calil once financed a house for Wade in Paris. He is also well known in London, where he befriended the scandal-prone British novelist, fantasist and lord, Jeffrey Archer, to whom he is said to have given investment advice. Calil also knows the scandal-prone Labour politician Peter Mandelson, now Europe's trade commissioner. In 1999 Mandelson rented a luxury apartment in Holland Park, London, from him and the
Observer
newspaper suggested the two men became friends and met several times.

According to one of the plotters of the Wonga Coup, Calil also discussed the affair in Equatorial Guinea with Mandelson while walking in South Kensington near Mandelson's home, in April 2004 – after the coup plot. The plotter says he has a recording of the conversation. The then opposition Conservative spokesman on foreign affairs, Michael Ancram, put down a question in Parliament asking if any ministers or officials had had any discussions with Mandelson about Equatorial Guinea in the previous twelve months. Mandelson repeatedly and vehemently denied any collaboration with Calil, stating that ‘I have consistently denied speaking to Mr Calil about this and he has also confirmed that there has not been any discussion between us.'

Mann first met Calil in London, probably late in January 2003. They were likeminded. Each had a long-held interest in Africa and they discussed the politics of the continent, especially wartorn Sudan. Calil, according to Mann, had done careful research and knew a great deal of Mann's background: he was aware of the partnership with Tony Buckingham and how Executive Outcomes was formed in Angola with South African partners; he also knew how it subsequently worked in Sierra Leone. At a second meeting some days later, said Mann, Calil mentioned Equatorial Guinea and Mann confessed he knew nothing of the place. Calil probably described one of his political connections, an exiled politician living in Madrid called Severo Moto Nsa. He knew Moto well: the two men employed the same public relations company in London and shared a fierce dislike of Obiang, the president, though it is not clear why Calil held such a grudge. Calil later told the respected journal
Africa Confidential
that he was giving Moto some ‘modest' financial support.

A couple of weeks later Mann and Calil met again, said Mann. At some point Mann gave Calil a nickname: ‘Smelly', to rhyme (according to British pronunciation) with Ely, presumably using it only when discussing him with friends. Mann also did his own research. Mann later said that he learned that ‘the situation in Equatorial Guinea was very bad' and that Obiang's family ran ‘a police state in which they are thought to indulge in cannibalism for medical reasons … murder and rape'. Mann also learned that Obiang was sick with cancer. It was agreed that they travel to Spain to meet the opposition figure Calil was supporting.

Mann learnt quite a lot about Moto, both from Calil and through his own research. Moto is a stolid man, no flash-inthe-pan opposition leader. Short and plump, he has a high brow, a round face and wears glasses. His eyebrows are expressive, each an upward-pointing arrowhead. He likes formal business suits and sharp ties. Born in 1943 in a village called Acock in the mainland part of the country, he studied first at a missionary school, then spent seven years training for the priesthood in Spain. He took Holy Orders in 1964. Back in Equatorial Guinea he trained as a teacher, took a degree, then worked as a journalist. For much of the 1970s, under Macias, he worked for a loyal radio station and edited a newspaper,
Ebano
. Eventually, like most educated men, he was thrown under house arrest. He was released in 1979 when Obiang ousted his uncle in the ‘freedom coup'.