LUANDA, Angola — Just past the misnamed Beautiful Rose Farm, a shantytown without running water or sewers, is a lush, gated compound with spacious houses, manicured gardens and tennis courts that ExxonMobil built for its employees.
Besides the foreigners, the development also has benefited a few well-connected Angolans: A local businessman close to President Jose Eduardo dos Santos was hired by the oil company to construct the complex, and a former army chief of staff collects rent on the land, according to an oil industry consultant's report and a source familiar with the arrangement.
Picking them as partners won ExxonMobil "brownie points" with the ruling regime, the report said.
Courting Dos Santos and other leaders of oil-rich African countries has become increasingly important as Western oil companies and U.S. officials seek to feed growing demand and reduce dependence on the Middle East. But in the process, Washington may be repeating what critics say is a mistake it has made for decades in other corners of the world: cementing the power of a local elite at the expense of an impoverished and resentful majority -- and ultimately, fomenting instability.
Oil companies have won favor with the Dos Santos regime by steering contracts to Angolan insiders and by giving millions of dollars to foundations controlled by the ruling family, internal oil company reports reviewed by The Times show.
The Bush administration has sought to strengthen ties to the Dos Santos regime despite allegations of widespread corruption. The two presidents met Wednesday in the Oval Office to discuss "issues of common interest." And the administration recently declared Angola's record on corruption and transparency sufficient to make it eligible for a trade program that eliminates duties on its oil and other exports.
Meanwhile, as much as $1 billion a year has disappeared from Angola's national treasury, according to reports by the International Monetary Fund and two watchdog groups. International Monetary Fund figures show that Angola could not account for 15% of government expenditures it reported from 1997 through 2002. European judicial authorities say they have traced tens of millions of dollars in Angolan government funds to private bank accounts in Luxembourg, the Cayman Islands and Switzerland.
