11 Jan 2021
By Delfin Mocache Massoko, Antonio Baquero, Micael Pereira, Flora Alexandrou, Linda van der Pol, Mark Anderson and Stelios Orphanides, OCCRP, 8 January 2021
OCCRP — For years, Juan Tomás Ávila Laurel was known as an outspoken critic of Equatorial Guinea’s government, despite decades of brutal repression and staggering corruption.
By 2011, the award-winning writer had finally had enough. With the Arab Spring toppling autocratic regimes across the Middle East and North Africa, he launched a hunger strike, hoping to trigger a wave of reform in his own country.
It didn’t work. Equatorial Guinea’s ruler, Teodoro Obiang, 78, and his family have used the profits from a decades-long boom in the country’s oil industry to secure an almost unshakeable hold on power in Africa’s longest-running dictatorship.
“Oil money has served for some or many to get rich … but personal wealth does not contribute to the development of any community,” Ávila Laurel said in a recent interview in Spain, where he fled after being “harassed” for his hunger strike.
“The most probable thing is that the oil money will run out without the Guineans ever benefiting.”
Now, journalists have uncovered a new vein of corruption in Equatorial Guinea’s kleptocracy through an international web of firms and assets linked to Obiang’s son, the country’s Minister of Mines and Hydrocarbons, Gabriel Mbega Obiang Lima.
Reporters uncovered evidence that the 48-year-old has used his powerful position to allegedly extort bribes from businessmen and siphon off millions of euros of state money from a construction project. A criminal complaint filed by someone with knowledge of Armando Cunha, a company involved in the alleged scheme, and obtained by OCCRP’s partner Expresso, claims the funds ended up in offshore companies and accounts controlled by Obiang Lima’s associates.
Multiple sources told Expresso that police raided Armando Cunha’s headquarters in Lisbon on December 17. Police did not reply to a request for comment about the raids.
Armado Cunha said via its law firm that the company conducted its operations abroad “in a regular and lawful manner,” and denied all allegations of corruption. The company did not respond to follow-up questions about the police raid.
Oil could have been a boon rather than a curse for Equatorial Guinea, which consists of a jungle-clad island in the Gulf of Guinea and a sliver of West African coast. Major foreign firms rushed to exploit deposits discovered in its territorial waters in the late 1990s, generating billions of dollars of revenue every year for the government.
But little of that money has trickled down to the population. Instead, much has been channeled into vanity projects, such as hosting the 2015 Africa Cup in the midst of West Africa’s Ebola epidemic and building a complex for an African Union summit featuring a villa for each head of state.
Today, Equatorial Guinea has one of the highest GDPs per capita in Africa, but few people have access to proper education or healthcare, and many houses in the capital still lack drinking water.
“When the oil came, we had this influx of millions and millions of dollars and influx of oil companies, gas companies that were willing to bribe government officials to get access to the production capacities,” said Tutu Alicante, a human rights lawyer and founder of Equatorial Guinea-focused NGO EG Justice.
“So we went from being a small corrupt country to becoming a very, very corrupt nation, a country that’s now defined by how corrupt we are,” he added.
Ávila Laurel told OCCRP he has little hope conditions will improve in his native country any time soon.
“Oil has served Obiang to reward Guineans who are loyal to him. Obiang knows that those around him are thieves,” he said of the dictator’s son. “Oil allows you to buy people, or make people feel bought.”
Obiang Lima did not respond to requests for comment sent by reporters.
Welcome to the Grand Hotel Malabo
In 2010, as Equatorial Guinea’s oil production was growing, Obiang Lima signed a contract to create a facility for the National Technological Institute of Hydrocarbons of Equatorial Guinea to train students from across Africa for jobs in the oil industry.
The planned facility would cost more than 57 million euros (just over $81 million) to build, and it would be based in Malabo, the country’s capital, according to a document obtained by Expresso.
But by 2012, the institute’s planned location had shifted to Mongomo — a town on the mainland where Obiang Lima’s father was born — and the cost to the state had risen to almost 107 million euros ($139.5 million). As a point of comparison, Equatorial Guinea’s entire education budget for 2020 was a little over 91 million euros (around $102 million).
Today, the institute boasts a modern building with open spaces, classrooms, an auditorium, tennis courts, and housing for teachers and students.
But documents obtained by OCCRP and its partners suggest part of the budget increase went into lining Obiang Lima’s pockets.
The criminal complaint filed in Portugal says Armando Cunha paid more than 10 million euros to seven companies that appear to be controlled by the minister and his associates, including Cyprus-based Gabangare Holdings Limited and several of its subsidiaries.
The complaint alleges the cash, described as payment for consulting services, was then funneled to accounts in Cyprus, the Netherlands, Spain, and elsewhere.
“These funds, regardless of the description on the invoices, are nothing more than the payment of fees/bribes,” it said.
Invoices, bank records, and contracts analyzed by OCCRP and partners confirmed Armando Cunha paid out almost 7 million euros to these companies out of the 10 million they invoiced for. The documents do not show whether the Portuguese construction company paid the more than 3.4 million euros that Gabangare invoiced for over several years.
Armando Cunha also agreed to carry out more than 23 million euros of works on various properties around Equatorial Guinea as part of the deal. Notably, they included 11.3 million euros of free renovation and construction work on the Grand Hotel Malabo — also known as the Cotton Tree and Eureka, or Ureka, Hotel — which has various ties to Obiang Lima.
ACSA, a subsidiary of Burilda Consultancy Limited, Armando Cunha’s joint venture partner with Gabangare, said in a financial statement it had carried out more than 9 million euros of works on the hotel between 2011 and 2013.
A lawyer for Armando Cunha denied the company was involved in any corrupt practices and blamed any claims otherwise on a disgruntled partner with which it is having a legal dispute.
“Because there are pending court cases no statements will be made, but we underline the fact that all the company’s activity has been carried out in a regular and lawful manner and its accounts have been repeatedly approved and audited by an external entity,” said the statement sent by the lawyer.
Anti-corruption expert Lucas Oló said Grupo Molsa and other companies linked to Obiang Lima often make money by renting out residences to foreign oil companies or even the government.
“At the end of the day, they get the money back either way,” Oló said. “Usually they charge a lot of money, beyond market rents for houses. Some companies do not worry that much about the cost because they may charge back the ministry.”
Reporters have identified several important players in Obiang Lima’s network.
They include NJ Ayuk, CEO of the law firm Centurion Law Group; Nicolaos Neocleous, director of Gabangare; and a Dutchman named Donald Frank van der Horn van den Bos, who appeared as the director or owner of a number of firms involved in the hydrocarbon institute deal.
It’s unclear how Van der Horn van den Bos, a 60-year-old tax consultant, met the son of Equatorial Guinea’s president, though the two appear to share many interests, as well as lucrative business ties.
Two people with knowledge of Gabangare, who both asked not to be named, described the Dutchman as Obiang Lima’s “right-hand man,” conveying the minister’s instructions to the directors and management of the company.
“At the top was Donald [Van der Horn van den Bos],” one told OCCRP, “meaning that [it] was Donald who was in contact with Gabriel [Obiang Lima].”
Van der Horn van den Bos lives in Son Gual, Mallorca, where his company Patapouf S.L. is also registered.
Patapouf and Bellezzavecchio S.A, a real estate company where he served as a director, together were paid 4.65 million euros by Armando Cunha, mainly described as for consulting, between 2013 and 2016. Another of his companies, Flojust Holding B.V., also invoiced the Portuguese construction firm for more than 400,000 euros between 2011 and 2013.
Van der Horn van den Bos did not respond to a request for comment.
Read more at OCCRP
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