Oil company officials have said they are obliged to accept the terms set by the governments in the countries where they operate in order to obtain exploration permits.
Obiang has ruled Equatorial Guinea since 1979, when he took power in a coup against his uncle. On Dec. 15, Obiang won 97.1% of the votes in a presidential election that was widely viewed as fraudulent.
Until the mid-1990s, Equatorial Guinea's economy seemed to be on the verge of collapse. Since then, foreign companies -- led by American firms such as ExxonMobil, Marathon Oil Corp., Amerada Hess and ChevronTexaco Corp. -- have discovered huge reserves in the country and invested about $5 billion in its oil sector.
Equatorial Guinea's oil production has jumped from just 17,000 barrels per day in 1996 to a current rate of more than 220,000 barrels per day.
As a result, the Bush administration has initiated a political thaw with the Obiang regime. In late 2001, President Bush authorized the reopening of the U.S. Embassy in Equatorial Guinea, which had been closed six years earlier, in large part due to the country's horrific human rights record.
There's been little if any improvement since then on that issue. A recent State Department report said the country's security forces "committed numerous, serious human rights abuses," including torture and beatings, and that citizens "do not have the ability to change their government peacefully."
The World Bank has censured the regime for failing to account for oil revenue, which it says has had "no impact on Equatorial Guinea's dismal social indicators."
In 2001, Obiang asked for help from the International Monetary Fund in putting together an economic restructuring plan. Talks broke down, however, because his regime refused to provide detailed data about oil revenue.
An IMF report released in October 2001 said that Equatorial Guinea's management of oil contracts lacked transparency and that there was "no fiscal control over the payments due from, and paid by the oil companies."
The IMF urged the government to fully disclose its foreign bank holdings and to transfer the deposits back home.
In "My Life for My People," his autobiography, Obiang complained that the IMF had tried to force him to cede control over the country's budget. "If the people of Equatorial Guinea have deposited their faith in me, functionaries of the IMF can't take it away," he wrote.
A State Department official declined to comment except to say that the administration was aware of IMF and World Bank concerns.
Gavin Hayman, who tracks Equatorial Guinea for Global Witness, says Obiang "has taken advantage of a rash of secret deals with U.S. oil companies to privatize his country's oil wealth."
Oil and banking experts say Obiang's account with Riggs is uncommon, particularly if he exercises sole control over it. Standard practice for a national account would require dual control, typically exercised by the minister of finance and the head of the central bank.
"It is an unusual set of circumstances," said Larry Barcella, a Washington lawyer and money laundering expert. "The bank would have needed to ask additional questions to make sure that it was an appropriate account and that there was no need to file a Suspicious Activity Report."
U.S. banking rules call for financial institutions to closely monitor accounts set up by foreign political leaders, which the Federal Reserve classifies as a "high-risk" activity that calls for "enhanced scrutiny." If the source of income or spending from the account raises concerns about corrupt practices, banks are required to file a Suspicious Activity Report with the Treasury Department.
The Treasury Department will not disclose whether it has received such reports on the Guinean account and Riggs is prevented by the Bank Secrecy Act from saying whether it has filed one.
Founded in 1936, Riggs has long specialized in offering discreet services to foreign governments and wealthy individuals. The Web site for the bank -- which maintains offices in the Bahamas and the island of Jersey, two jurisdictions with strong bank secrecy protections -- promises its wealthy clients "the utmost discretion." The site boasts that Riggs has "repeatedly demonstrated the ability to work as a financial confidant to heads of state, diplomats, business leaders and prominent individuals and families."
Riggs' reputation for discretion has attracted controversial clients in the past. They have included CIA agent turned Russian spy Aldrich H. Ames, who moved some of his payments from Moscow through a Riggs account in the early 1990s.
Equatorial Guinea's account is managed by Simon Kareri, a senior vice president and senior international banking manager at Riggs' Dupont Circle branch in Washington. Kareri handles embassy banking for Africa and the Caribbean region and also offers private banking services for wealthy individuals with a minimum of $1 million to invest.
Kareri did not return phone calls.