If you fly into Miami International Airport and drive east toward the city and north on Interstate 95, you bypass South Beach and midtown and in about thirty minutes reach the 163rd Street exit. Heading east toward the ocean leads you past several miles of strip malls filled with convenience stores, pawn shops, bodegas, gas stations, chain restaurants, nail salons and an occasional yoga center. Then rising unexpectedly in the distance is a row of condominium skyscrapers so baroque and unattractive that they conjure up the name of only one man: Donald Trump.

You have arrived in the city of Sunny Isles Beach, or “Florida's Riviera,” as its political and business leaders have dubbed it. Massive skyscrapers along beachfront Collins Avenue include three Trump Towers and three other Trump-branded properties, including the Trump International Beach Resort, where I stayed — very comfortably, I confess — for eleven days in June.

Other luxury properties on the stretch include the gaudy Acqualina Resort & Spa, where the penthouse recently went on sale for $55 million, and the Jade Ocean, which offers “beach amenities thoughtfully conceived to continue attentive service and lavish appointments all the way to the water's edge” and a Children's Room featuring Philippe Starck furnishings and a baby grand piano. Meanwhile, ground was recently broken on the Porsche Design Tower, which its developers describe as “the world's first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.”

Until the late 1990s, this Miami neighborhood was populated by retirees and tourists and was dotted with dozens of theme motels, many of them named after Las Vegas properties: the Dunes, the Sands, the Desert Inn and the Aztec. Between the 1920s and '50s, Sunny Isles catered to visitors like Jack Dempsey, Babe Ruth, Grace Kelly, Burt Lancaster and Guy Lombardo, but later became a destination for tourists of modest means.

Everything changed in 1997, when real estate developers and other business groups succeeded in passing a referendum to incorporate Sunny Isles as a town. From that point on, building, planning and zoning decisions were stripped from the Miami-Dade County Commission and put in the hands of the industry-dominated Sunny Isles City Commission, whose current members consist of a real estate executive, a property lawyer and a former advertising executive. What happened next was the most spectacular neighborhood transformation seen in Miami since cocaine money rebuilt the city’s downtown area beginning in the late 1970s.

The first mayor was David Samson, a parking garage magnate from Chicago who retired to Sunny Isles and helped “remake a sleepy area of low-rise motels built along Collins Avenue in the 1950s into a sparking city of condominium towers,” according to his 2003 obituary. Norman Edelcup, a former banker and real estate executive, succeeded Samson upon the latter's death, and the city has been a property developer's wet dream ever since.

For all of its wealth, Sunny Isles, which spans just one square mile and has a population of 20,832, is as bland and boring as its political leadership. “Residents are as pampered as hotel guests,” says the glossy official guidebook, which features photos of the beach, shopping boutiques and, mostly, luxury condos. “World-class spas, unparalleled concierge service, beachside wait staff ready to serve, free city transportation, and dozens of cultural opportunities is why Sunny Isles Beach stands out amongst the rest.”

I interviewed a Siberian-born realtor in the lobby of Beach Club, a luxury condominium on South Ocean Drive in Hallandale, just north of Sunny Isles. “Miami is a brand,” she told me as we sat on a sofa in the building's huge foyer. “People from all over the world want property here.” Developers were only putting up luxury properties because they “know that the crisis has not affected people with money,” she added. By way of example she pointed to the Regalia, a new Sunny Isles condo with only thirty-nine units, one per floor, with prices starting at $6 million.

Most of her clients are Russian — there are now three direct flights per week between Moscow and Miami — and increasing numbers are moving to Florida after spending a few years in London first. “It's a money center, and it’s a lot easier to get your money there than directly to the US, because of laws and tax issues,” she said. “But after your money has been in London for a while, you can move it to other places more easily.”

Florida was at the epicenter of the housing bubble that collapsed the country's economy, and the state's overall foreclosure rate remained the highest in the country through the first half of 2013. But the luxury real estate market in Miami is flourishing. A March story in Property Week said the “dark age” of the 2009 crash was over: “Fewer than ten percent of downtown Miami units are left and they're going fast. Meanwhile, super-luxury penthouses at the exclusive southern tip of South Beach…are selling for $25 million.”

This remarkable boom in high-end real estate has been driven by foreign money, with “buyers coming from all over the world but with the highest concentration from Venezuela, Argentina, Brazil and Russia,” according to the website for Miami Condo Investments, which offers high-end properties for sale. Twenty-six percent of real estate sales to foreigners in the United States occur in Florida, more than anywhere else in the country and twice as high as second-place California, according to the National Association of Realtors. Seventy-six percent of condo buyers in Miami don't take out mortgages but pay cash, versus a national average of 32 percent for cash sales for all properties.

Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works. “It's a very local market,” he said. “It's for people who are used to paying cash for most of their second homes.”

Born in Argentina to Cuban parents, Pérez faced financial ruin during the last housing bubble. By 2010, his Related Group had lost four of its seven Florida developments to foreclosure and was desperately trying to reschedule $1.5 billion in debt. Now he is hawking a new slate of luxury projects, including One Ocean at the tip of South Beach and the SLS Hotel, a brand whose flagship property is in Beverly Hills.

Enticing foreign buyers may have saved the financial skins of Miami real estate investors like Pérez, but all that offshore money entails risks as well. Obviously not all of the money flowing into Miami from abroad is illegitimate. Yet there are abundant signs — beyond the city's traditional role as a repository for dirty cash and the fact that much of the inflow is from countries particularly rife with corruption — that significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.

Corruption and bribery cost developing countries up to $1 trillion per year — lost revenues they are increasingly serious about attempting to recapture. Some of the money ends up in traditional offshore havens like Nevis, Bermuda and the British Virgin Islands, and huge amounts also flow to Western financial centers like Geneva, London and New York. But Miami, and its real estate market in particular, is an especially popular haven for ill-gotten cash. “South Florida has always been a favorite destination for international visitors and political figures, whether it is for vacation or to purchase property along its sandy and sunny beaches,” said a May 2011 Treasury Department report. “As such, Miami finds itself in the distinct position of being a reoccurring hot spot for funds pilfered by politically exposed persons (PEPs) and other criminal proceeds.”

The combination of tax haven accessibility and weak banking secrecy and corporate registry rules — as in Wilmington, Delaware, where nearly 300,000 businesses are registered at a single address — has created a huge global problem. For the past year, the International Consortium of Investigative Journalists has been making public a vast trove of leaked offshore records that have revealed tax evasion by billionaires, oligarchs, emirs, princes and multinational corporations around the globe. A recent report by the Tax Justice Network described tax havens as “the economic equivalent of an astrophysical black hole” and estimated that they collectively held as much as $32 trillion — roughly double the annual GDP of the United States.

In February, a member of Russia's ruling party, Vladimir Pekhtin, was forced to resign from the Duma when a blogger published documents showing that he owned three Miami properties worth more than a combined $2 million. Pekhtin's holdings were especially embarrassing because he had not disclosed his overseas properties in his annual financial disclosure filing, as is legally required under a bill he had written as chairman of the Duma's ethics committee. In Russia, which saw illegal capital outflows of more than $200 billion from 1994 to 2011, charges of corruption and lavish spending overseas have become major political issues.

In September of 2012, the New York Times reported that wealthy Argentines had been pouring money into Miami real estate “by expensive and sometimes illegal means.” Hugo Chávez's presidency prompted massive illegal capital flight by wealthy Venezuelans, with vast sums pouring into Miami. His re-election in October 2012, five months before his death, prompted some local realtors to joke that Chávez should have been named condo “Salesman of the Year.” Alvaro Lopez Tardon, the alleged leader of a Spanish drug gang, is currently facing trial in Miami on charges that he bought fourteen condos and a fleet of luxury vehicles to launder $26.4 million in cocaine profits.

It's difficult to discover who specifically has been snapping up high-end properties, because many buyers are not individuals but Florida limited liability companies (LLCs). In August 2012, a 30,000-square-foot house on Indian Creek Island with thirteen bedrooms and fourteen bathrooms sold for $47 million, the most expensive home sale in Miami's history. Media accounts identified the anonymous buyer as a Russian, but the listed owner is AVK Land Holding, a Florida LLC, whose business address is a pay-by-the-day business center in midtown Manhattan and which was registered a few months before the sale by a Tallahassee company called Incorporating Services Ltd. AVK's annual report is signed by Andrey M. Kaydin, an attorney based in Coney Island who has also served as a beard for buyers of luxury properties in New York City.

Buying property through business entities set up in Delaware or offshore havens is also common. Condo owners at properties in Sunny Isles include companies that were established or have legal representatives in a multitude of locations, including Argentina, Belize, the Bahamas, the British Virgin Islands, Chile, Guatemala and Trinidad.

Trump's partner in Sunny Isles is Dezer Development, which began buying up property in 1995 and now owns twenty-seven acres of oceanfront. According to company president Gil Dezer, his firm handles the due diligence on condo buyers. “We do make sure we know our customer by asking for personal information at the time of signing the contract,” Dezer wrote in an e-mail. “We also make sure that anyone buying with an LLC proves to us that they are the rightful owner of that LLC and we check again at closing to make sure that we are still dealing with the same person at the time of delivering title.”

Offshore entities are an especially bright red flag, but domestic LLCs offer a simple means of obscuring property ownership from tax and law enforcement agencies or an aggrieved business partner or spouse. Peter Zalewski, a consultant to real estate developers, told me that Pekhtin “was either naïve or cheap. If he'd just hired a local attorney, he could have structured things in a way that he never would have been caught.”

Democratic Senator Carl Levin of Michigan has long tried to address rampant money laundering by passing a bill that would require companies registered in the United States to reveal their true owners, but it has been blocked by the US Chamber of Commerce, the American Bar Association, and lobbyists for states including Delaware and, notably, Florida. Meanwhile, Florida's political leaders have been spearheading the fight against a new Treasury Department rule mandating that foreign banks tell the IRS about accounts held by US taxpayers — and which would, reciprocally, require US banks to share the same information with foreign governments. Not surprisingly, Florida banks and realtors don’t like the idea of more sunlight on their lucrative dealings with foreigners. “There is a huge amount of dirty money flowing into Miami that's disguised as investment,” said Jack Blum, a former congressional investigator and Washington attorney specializing in money-laundering cases. “The local business community sees any threat to that as a threat to the city's lifeblood.”

I uncovered more than a score of notable foreign property holders in Miami, from a former senior Angolan official to various oligarchs, political cronies and controversial figures from Eastern Europe and Latin America (for summaries of their backgrounds and Miami holdings, see sidebars). That small window came after more than six months of research; dozens of interviews with money-laundering, banking and real estate experts; a visit to the city; and countless hours poring over Florida real estate and corporate records by myself and several research assistants.

I was especially interested in the growing presence of Russians and other Eastern Europeans, who began purchasing properties in Miami soon after the collapse of communism. Early arrivals included various Russian pop stars, among them Igor Nikolaev and Alla Pugacheva, but more than a few bad apples as well. Miami soon became a boomtown for former government officials and post-perestroika businessmen who looted the state during privatization and for mobsters who trafficked cocaine, bought strip clubs and set up offshore banks around the Caribbean. In his book Red Mafiya, Robert Friedman wrote that “Versace-clad” Russian gang leaders found Miami to be an ideal base for money laundering, “where each new day brought the potential for a multimillion-dollar score.” By 1996, according to a Miami Herald story that year, some 300 former Soviet citizens had bought properties in South Florida.

Isaac Feldman, who came to Miami after first emigrating to Israel, founded a real estate agency and became rich selling condos, mostly to Russians. Feldman didn't seem overly concerned about the source of his clients' money. “That some people [in the former Eastern bloc] operate by not paying taxes and duties and paying some bribes, yes, that could be,” he was quoted as saying in the Herald story.

Mayor Edelcup later appointed Feldman as a community adviser, and in 2010 he received 26 percent of the vote in a run for the Sunny Isles City Commission. Feldman vowed to mount another campaign, but his political career was cut short when he and two other Russians were indicted last December for conspiracy, wire fraud and money laundering. The trio had employed young Eastern European women to lure rich tourists to bars that bilked them — to the tune of $43,000 in the case of one customer — for overpriced caviar, vodka and champagne.

Thanks to its heavy Russian presence, Sunny Isles has acquired the nickname “Little Moscow.” Shops at a mall across the street from the Trump International Resort include a delicatessen offering blintzes and beef stroganoff, a furniture store with white leather sofas in the display window and restaurants serving an Eastern European clientele.

One night I had dinner at Lula Kebab House, where I felt like I'd been transported into a Russian version of Goodfellas. A Russian singer performed on a small stage with disco lights while customers ordered skewered sturgeon, eggplant salad and pierogis, and clinked forks on glasses to announce toasts before downing shots of vodka. At the table behind me, a man who looked to be almost 70 spoke in Russian to his wife, who appeared to be at least 40 years younger. At a table out front, a man of about the same age was seated with a young woman dressed in blue jean shorts, a halter top and cowboy boots.

Sunny Isles also has numerous real estate agencies owned by Russians that cater heavily to Eastern European clients, among them Exclusively Baranoff Realty, which operates from an office in the lobby of the Trump International Beach Resort and, according to an advertisement hanging near the elevator bank, represents “the most exclusive residences in Sunny Isles Beach, from $250,000 to more than $20 million.” A purple-and-gold advertising flier on a table out front of the agency that listed numerous properties for sale was in English on one side and Russian on the other.

I approached several realtors as a potential buyer. One agent I met with, a beautiful dark-haired Eastern European woman, told me that luxury properties in Sunny Isles were selling fast, mostly to foreigners and New York hedge funds. There were about 300 units in each of the Trump properties in Sunny Isles, but only ten were available in the $2-million-and-up range (which I had said I was looking for). If I was serious about buying, I’d have to move quickly and pay cash.

She took me to see a three-bedroom, three-bathroom unit on the thirty-eighth floor of Trump Palace, which looked out on the turquoise waters of the Atlantic and was on the market for $2.3 million. Building amenities included a bar, business center, cabanas, exercise room, indoor and outdoor pools, a spa and sauna, and tennis courts. “Living in a Trump property is like living in a hotel,” she told me, echoing the sales pitch in Sunny Isles' official guidebook, as we stood on a balcony and gazed out on the ocean. The unit was attractively priced, she said cheerfully, and all the more so as the owner, a Russian looking to buy a bigger condo elsewhere in the area, had spent at least $350,000 on improvements.

Later that day, I obtained the property records for the condo. The legal owner is a company registered in Belize, an offshore haven where, according to a government website, there “is no requirement to file annual returns or public disclosure of directors, shareholders, charges, loans or agreements.”

In other words, the true owner of the Trump Palace unit is untraceable. He may be a perfectly respectable businessman, but the arrangement was a typically murky Miami affair.

Miami is a relatively new city, having been incorporated in 1896, and its entire history is inextricably intertwined with the real estate industry and its regular cycle of booms and busts. Miamians chatter incessantly about real estate, in the same way that a certain subset of New Yorkers talks about the stock market, Washingtonians politics and Los Angelenos the movie industry.

One afternoon at a restaurant called Boteco, I sat next to a table of four Brazilians who were cooking up a property deal. When drinking a cup of coffee in front of a strip mall café, I overheard a woman on the phone saying, “I know, I know, but the question is, are you willing to go higher?” At Tatiana — a restaurant and nightclub just north of Sunny Isles that is a favorite of Russians and that, on the weekends, features a show with cabaret dancers, circus performers and an occasional tiger — I overheard half of another phone conversation in which a middle-aged American man talking excitedly about one deal said, “I'm not normally a pyramid-scheme type of guy, but this one I like.”

Tens of thousands of people moved to Miami during the city's original property rush of the 1920s. Many never intended to settle there but instead hoped to get rich speculating, and the enormous real estate bubble that ensued exploded in 1926. That was the same year as the Great Miami Hurricane, the most destructive ever to hit the United States at that time. It killed nearly 400 people and caused billions in property damage (in today’s dollars), blowing away thousands of unfinished houses that had been abandoned when the real estate market crashed. Next came a post–World War II rush fueled by people who came to stay. “That boom was more legitimate than the first one, and in a sense it has never ended,” says Paul George, a professor of history at Miami Dade College, adding that Dade County’s population has grown from 250,000 in 1940 to about 2.6 million today. “But ever since, we’ve had spikes of excessive speculation that ended badly.”

The wildest ride began in the 1970s, when Latin American drug lords turned Miami into a key hub of their operations and poured billions of dollars into the local economy, with much of it laundered into real estate. It also led to a crime wave — memorialized in Miami Vice and Brian De Palma’s Scarface — that gave Miami the nation’s highest murder rate. Drug money tainted everything from law enforcement to real estate to banking. “Miami's Federal Reserve branch has a currency surplus of $5 billion, mostly in drug-generated $50 and $100 bills, or more than the nation’s twelve Federal Reserve banks combined,” Time magazine reported.

The city's last real estate boom resulted from reckless lending by banks during the early 2000s. During the run-up, Miami's once sleepy downtown and city center were completely transformed by the frantic construction of high-rise residential buildings and office towers. Residents poured in, turning downtown into one of the fastest-growing areas in the entire state. Moscow-based Mirax Group, headed by Sergei Polonsky — who once ate part of his tie on live TV to settle a bet, and whom Forbes has rated one of Russia’s nine most bizarre oligarchs — announced a development project on a private island that the company marketed to Russian buyers, saying it would change “the expectations of elegant and sophisticated living on Miami Beach.” Pérez, the Condo King, announced plans for the Icon Brickell, a $1 billion project that included three towers with 1,640 units, a swimming pool the size of a football field and five restaurants. Marc Anthony told People magazine that he and Jennifer Lopez had bought a unit at the Icon Brickell, “and when we are through decorating the condo, it will be the sexiest place in town!”

Then, inevitably, came the crash. Miami real estate prices fell by 35.8 percent between late 2005 and the same period in 2009. Tens of thousands of downtown condos were unoccupied that year and, as a Property Week story recounted, at night dogs roamed deserted streets in once hot central neighborhoods. Mirax went bust and Polonsky has fled Russia, where he is wanted for real estate fraud. He is reportedly in Cambodia, where he spent jail time earlier this year for allegedly attacking six boatmen with a knife. In May 2010, HSBC Bank seized control of 1,276 condos at the Icon Brickell, and it turned out that Anthony and J. Lo had never purchased a unit there. Instead, they had, in a PR move engineered by developers, leased a condo cheaply.

Things were even grimmer elsewhere in the state. Trash piled up at vacant lots in abandoned ghost subdivisions. Construction came to a screeching halt on giant shopping malls and office buildings that went into foreclosure. In 2010, a real estate expert told NPR that there were enough housing lots in Charlotte County, in the southwestern part of the state, to last for more than a century.

Through boom and bust, one constant in Miami has been the political and business establishment’s embrace of offshore cash. Predictably, this has led to an assortment of foreign rogues regularly washing up in the city.

In 2003, US Immigration and Customs Enforcement (ICE) set up what became known as the Foreign Corruption Investigations Group in Miami to track down assets held by foreign officials and business executives in the United States. Within months, the group — which was based in Miami due to the large number of requests for assistance that the local office received from foreign governments — seized a $3.5 million Key Biscayne condo owned by Byron Jerez, former head of Nicaragua’s tax office. The following year, the United States returned to Nicaragua $2.7 million worth of assets that had been stolen by former President Arnoldo Alemán, who was sentenced in his home country to twenty years under house detention for embezzling $100 million from the state treasury. The assets included various Miami bank accounts, a cabana at the Key Biscayne Ocean Club, and a $150,000 deposit for the purchase of another Key Biscayne condominium.

In 2008, after Uruguayan authorities alerted ICE, the feds agreed to extradite Juan Peirano Basso, an international fugitive wanted for embezzling more than $800 million from financial institutions in Uruguay, Paraguay and Argentina, and who had been living comfortably in Miami. Basso's actions “are believed to have caused the collapse of the Uruguayan economy and to have caused the South American financial crisis of 2002,” said an ICE press release announcing his extradition. Since its inception, the Foreign Corruption Investigations Group has made eighty criminal arrests, secured 148 indictments and seized more than $131 million in assets, according to ICE.

Drug lords and other criminals and swindlers have no doubt been drawn to Miami for some of the same reasons that tourists and retirees flock there — the ocean, sun and natural beauty — but Florida's reputation for corruption and sleaze has surely been a lure as well. This is, after all, a city that is notorious for bizarre political and business scandals. Earlier this year, Miami-Dade Assistant State Attorney Ari Pregen was fired after he flashed his work badge to gain free admission to a strip club and pulled out his credentials again when the bill came, to avoid paying a 15 percent credit card surcharge.

Overall, Florida led the United States in federal convictions of public officials — 781 — between 2000 and 2010. Just this summer, three suburban Miami mayors were arrested on corruption charges within a month. “This is a place where it’s easy to lose your moral compass,” says Zalewski, the real estate consultant. “Everyone who moves to Miami wants to live in South Beach, which is fun, but the rule should always be to not renew your lease after the first year. If you do, it's pretty much guaranteed that you'll end up in rehab.”

Adding to the area's decadent appeal is that banks and real estate developers have frequently played fast and loose with the rules as well. Allen Stanford, now serving a 110-year prison sentence for running a massive Ponzi scheme, set up his bank in Florida in 1998 after the state's banking director authorized it to move huge amounts of money offshore without informing regulators.

Florida's rate of mortgage fraud was higher than anywhere else in the country between 2000 and 2008. In the latter year, Don Saxon, Florida's top mortgage industry regulator, was forced to resign after a Miami Herald investigation found that 10,000 criminals — including burglars, cocaine traffickers and identity thieves — had been approved to broker home loans in Florida and had committed at least $85 million in mortgage fraud.

Some flagrant abuses have been addressed, partly due to tighter rules imposed under the Patriot Act following the 9/11 attacks, but Florida banks still have a lot of room for improvement. In 2011, Miami-based Ocean Bank forfeited $11 million to the federal government for willfully failing to establish an anti–money laundering program for seven years. During that time, Ocean Bank took in large sums of cash from Colombia's Bernal-Palacios drug trafficking organization. Among the group's leaders was Ricardo Mauricio Bernal Palacios, whom the DEA once described as “one of the most wanted money laundering fugitives in the world.”

The real estate industry is more lightly regulated than financial institutions. Banks are required to file a Suspicious Activities Report (SAR) with the Treasury Department if they suspect a client is depositing or transferring corrupt money. Real estate agents and title insurers are exempt from that requirement—as are businesses that primarily sell luxury goods such as jewelry, yachts and private planes — which makes property an especially attractive vehicle to money launderers. Furthermore, bank tellers don’t receive a commission on the deposits they accept, so they are more likely to ask questions of a dubious customer than a real estate agent, who stands to make a huge commission on a multimillion-dollar luxury condo deal. “SARs are hugely important and often lead to exposure of major cases,” Stefan Cassella, an assistant US attorney based in Baltimore and the former deputy chief of the Justice Department's Asset Forfeiture and Money Laundering Section, told me. “Requiring a broader range of players to file them would be a big help to law enforcement in terms of keeping corrupt money out of the United States.”

In 2007, Bradley Birkenfeld, an American director of UBS's wealth management division in Geneva, approached the Justice Department and revealed disturbing information about his employer's business practices. In addition to disclosing that he had smuggled diamonds (in a toothpaste tube) across borders for a client, he told US authorities that UBS was helping thousands of rich Americans hide their assets offshore to avoid paying taxes.

The US government went after UBS, and in 2009 the bank settled the case and avoided criminal prosecution by paying a $780 million fine. More important, UBS turned over to the US government the names of more than 4,500 American account holders, and the case “put the first big cracks in Switzerland’s vaunted bank secrecy,” in the words of The Economist. At home, the IRS introduced amnesty programs that allowed Americans to pay a small penalty to repatriate undeclared offshore accounts, a move that has brought the Treasury an estimated $5 billion in back taxes and penalties.

Another result of the UBS affair was that in 2010 Congress enacted the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to notify the IRS about accounts held by US taxpayers or face stiff penalties.

One section of FATCA that has elicited particularly intense hostility is its provisions for reciprocity, meaning that American banks would have to provide foreign governments with the same information about their nationals who hold US accounts. FATCA was opposed by investment banks like JPMorgan and Bank of America and foreign financial institutions like the Zurich Insurance Group and the Hong Kong Securities Association. But no one fought harder against the rule than Florida bankers, real estate developers, politicians and regulators, who feared it would slow the flow of foreign money into the state’s economy, especially in Miami.

The Florida Bankers Association sued to block the measure for allegedly failing to comply with federal rule-making procedures. The lawsuit said that the measure would impose too high a regulatory burden on banks and that the federal tax code already had sufficient provisions in place to prevent tax evasion. Leading FATCA opponents also included the Florida International Bankers Association, a trade group representing foreign banks from eighteen countries, and the Florida Office of Financial Regulation, which said it would require the “blanket collection” of information on foreign account holders and that the IRS should instead negotiate with foreign governments for “the reciprocal exchange of information” as required in individual cases.

Florida Republican Congressman Bill Posey, a member of the House Financial Services Committee, wrote a letter to President Obama saying that FATCA would “result in the flight of hundreds of billions of dollars from US financial institutions” and the leaking of personal information that might lead to “kidnappings or other terrorist actions” against foreign account holders in their home countries. In reply, Treasury Department official Michael Mundaca said that the IRS does not share information with foreign governments “unless and until several conditions are met, including a review of the protections against the misuse of information.” He also denied the new rules would cause massive capital flight from American banks, and noted that US banks had made similar arguments in the mid-1990s when new regulations required the reporting of bank-deposit interest paid to Canadian account holders. In fact, the amount of money held by Canadians in American banks rose from $1.9 billion in March 1996, just before the final regulations were issued, to $4 billion one year later.

The anti-FATCA lobby was able to delay enactment of the rule and water down some of its provisions, but as of midyear the United States had signed reciprocal agreements under FATCA with nine countries and was negotiating with eighteen more. Charles Intriago, president of the Association of Certified Financial Crime Specialists in Miami, predicted that FATCA would “smoke out” the true owners of a lot of front companies for criminals, including politicians. “The IRS is going to get the names of their girlfriends and aunts and uncles who are serving as directors of companies set up offshore,” he said.

That remains to be seen, as opponents are already campaigning to repeal the rule and the IRS recently announced that it is giving foreign financial institutions an additional six months, until July of next year, to comply. Senator Rand Paul, the Kentucky Republican, has introduced a bill to repeal FATCA, saying it is a “violation of sovereign nations’ laws and privacy matters.” Congressman Posey is leading the repeal effort in the House. On July 1, he wrote a letter to Treasury Secretary Jack Lew saying that FATCA measures “themselves would not bring one penny into the US treasury, they would discourage investment in the United States.”

A number of conservative activists are also involved in the FATCA repeal campaign, including Grover Norquist of Americans for Tax Reform and Andrew Quinlan of the Center for Freedom and Prosperity (CF&P). A Washington Post story in April said that the latter group's “fundraising pleas have been circulated to offshore entities that make millions by providing anonymity for wealthy clients,” and that the director of a Hong Kong company that creates offshore trusts had sent a CF&P solicitation “to contacts in the Cook Islands, pointing out that CF&P was trying to raise $250,000 for a lobbying campaign to 'stop the bleeding, build allies and go on the offensive' against efforts in Washington to regulate the industry.”

No matter what happens with FATCA, cleaning up Florida financial institutions will not be easy, says Brian Kindle, who works for Intriago's association. “I read a lot of court records about financial crimes, and whether it's a Midwestern Ponzi scheme or a Caribbean bank fraud, at some point I always come across the phrase, 'The money moved through a bank in South Florida.' We have a big banking community, but New York and California are even bigger, and the money doesn't always move through their banks. Our banking and real estate industries grew up during the cocaine era, and the attitude here has always been to make a quick deal and don’t ask any questions. That's the whole culture, and it's pretty antithetical to a rules-and-regulation-based compliance system. Changing that is going to be hard.”

During my last few days in Miami, I visited a few more properties for sale in Sunny Isles and waded through real estate listings. There were dozens of oceanfront properties with all the trimmings: marble floors, custom white Italian doors, built-in bars, multimedia systems, ceiling windows with electric shades, his-and-hers baths and walk-in closets, Jacuzzis, swimming pools and beachfront cabanas. At Ocean Three, a condominium toward the northern end of Sunny Isles, an in-house restaurant, Bistro, delivers to the units, the pool and the beach and offers a seven-course tasting menu that includes options such as foie gras, oysters Rockefeller, lobster, black winter truffles and baby rack of lamb.

And so it goes in Miami, where the welcome mat for the globe's most pampered people is always out. Today, even as much of Florida has yet to pull out of the last real estate quagmire, at least 170 new condo towers are planned for Miami, many by the same developers behind projects that went bust during the last bubble. The Real Deal, a South Florida real estate publication, recently reported that a new influx of money from the Far East was further buoying the market and that the Ritz-Carlton Residences Palm Beach had already completed several deals with Chinese buyers.

Earlier this year, Flagstone Development announced it would build a mega-yacht resort called Island Garden that will feature high-rise towers, a hotel, shopping and a marina. The project was originally planned five years ago but fell apart when the real estate bubble brought down the global economy. Flagstone promises it will be open for business in 2019.

Jack Blum, the money-laundering investigator, recounted to me a work trip to Miami two years ago, when he was stunned to see condominiums going up in the poor Liberty City neighborhood. “I was in a cab and asked the driver what was going on,” he said. “He didn't miss a beat — he said, 'That's from money laundering.' When it's that obvious to cabdrivers, you know the situation is bad. But that's what the city's economy is built on, and it is a monumental challenge to fix it.”

This story was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations.

SIDEBAR: CITY OF ROGUES

The city's culture of conspicuous consumption and corruption has made it a hot destination for oligarchs, financial criminals and others who seek a tropical haven for their riches. Here are a few of the area’s property owners and residents, with their countries of origin.

Cristóbal López

Argentina

Bio: Casino and gambling hall magnate whose businesses have thrived under longtime allies President Cristina Fernández de Kirchner and her late husband and predecessor, Néstor Kirchner. Shortly before leaving office in 2007, the latter issued a decree extending for twenty-five years López's license to run slot machines at the Palermo racetrack.

Florida property: $1.6 million condo at Trump Tower, owned by an LLC called TT1-4301, of which he is the manager.

Felix Vulis

Kazakhstan

Bio: CEO of London-based ENRC, a mining firm owned by three oligarchs with close ties to Kazakh dictator Nursultan Nazarbayev and accused of corrupt dealings in the Democratic Republic of Congo. Named Britain's greediest CEO by the Daily Mirror.

Florida property: $4.6 million unit at a 51-story condo, Jade Beach, in Sunny Isles. Female companion has shipped 800 pounds of furniture from Kazakhstan to Miami.

Jorge Alberto Tito

Argentina

Bio: A former member of the Carapintadas, according to Tiempo—the group of Argentine army veterans who mutinied against the democratically elected government of Raúl Alfonsín in the 1980s to block the prosecution of officials charged with human rights violations during the military dictatorship’s Dirty War.

Florida property: $1.1 million condo at Trump Palace, owned by a Florida company called TS 5, of which he is a director.

José Luis Manzano

Argentina

Bio: Business magnate and former interior minister under Menem who famously declared, “I steal for the crown”—referring to the president.

Florida property: $1.0 million in two condos at Seacoast 5151, a few minutes drive from South Beach.

Michael Cherney

Ukraine

Bio: Reportedly blocked from receiving a US visa since 1999 due to alleged ties to organized crime (lives in Israel). A diplomatic cable released by WikiLeaks and written by the US ambassador to Uzbekistan, Jon Purnell, described Cherney as the head of a “Russian crime syndicate.”

Florida property: $7.0 million Boca Raton mansion, with six bedrooms, nine and a half bathrooms, a five-car garage, pool and dock, owned by his two daughters. Sold an $875,000 property at the Mizner Tower, on the grounds of the Boca Raton Resort and Beach Club, earlier this year.

Milan Popovic

Serbia

Bio: Industrialist and copper trader who once worked for Marc Rich, founder of Glencore, the gigantic, ethically challenged Swiss-based commodities firm. Reportedly bulldozed a multimillion-dollar estate in a Belgrade suburb on the advice of a psychic who told him it was haunted.

Florida property: $2.6 million condo on Fisher Island.

Milagros Brito

Argentina

Bio: At 35, she runs a luxury real estate firm owned by father Jorge's Banco Macro, which acquired other banks privatized during the Menem years. He is now known as the “Kirchners’ banker.”

Florida property: $650K condo in Trump Tower, owned through an LLC.

Zulemita Menem

Argentina

Bio: Daughter of former Argentine President Carlos Menem; filled the role of first lady to her father, who was divorced. During Menem’s reign (1989–99), Zulemita frequently turned up in Miami society-page photos wearing luxury jewelry and clothing, feeding suspicions that she was a beneficiary of her father’s spectacularly corrupt government.

Florida property: $1.2 million condo in Bal Harbor. The property, where she has resided, is owned by a banker who prospered under her father’s regime.

This story was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations.

The post Miami: Where Luxury Real Estate Meets Dirty Money appeared first on Type Investigations.

A sidebar to “Miami: Where Luxury Real Estate Meets Dirty Money.”

Jose Pedro de Morais Jr. has spent virtually his entire adult life in public service, holding various posts with the oil-rich Angolan regime of José Eduardo dos Santos, widely deemed one of the world's most corrupt rulers. Official salaries for Angolan government officials are quite low, yet after resigning from government Morais spent at least $10 million on real estate in the United States and Portugal, including a luxury property in Miami. For a time, he had a significant stake in a Coral Gables bank.

Morais held a series of senior economic posts in the civil service beginning in 1977, when he was 22, two years after Angola won independence from Portugal and the Popular Movement for the Liberation of Angola (MPLA) took power. In 1994, he became head of the Ministry of Planning and Economic Coordination and subsequently served in Washington as Angola's governor to the World Bank and alternate executive director to the International Monetary Fund. He returned to Angola in 2002 and was named minister of finance, holding the position until 2008.

In that role, Morais reduced inflation by slashing government spending, which made him the darling of the international financial community. “This powerful technocrat has won the confidence of the president to move Angola forward from decline and dissension to a point where local commentators and the International Monetary Fund alike express admiration, bordering on incredulity,” the Banker magazine said in naming Morais “Finance Minister of the Year” in 2008.

The facts are somewhat more complicated. The Angolan economy did rebound during Morais's years as finance minister, but that was largely because oil production soared, generating huge inflows of money for the government. Furthermore, during the same period the Angolan government arranged for vast “oil-backed loans” — so named because they are repaid with future shipments of crude oil — which typically carry high interest rates and route payments through offshore vehicles instead of state treasuries. With Angola flush with cash, it no longer needed loans from the IMF, and hence Morais halted negotiations to enter into a formal program with the organization, which would have required the government to be more transparent about how it spent its money.

After resigning his position as finance minister in 2008, Morais and his wife moved to Miami. In August of that year, he purchased a $5.4 million waterfront home in Miami Beach, paying cash. According to property records, Morais's property is located on a 12,000-square-foot lot and has five bedrooms and four bathrooms. In 2009, he redid the patio and replaced a dock, adding two new boat lifts, according to a permit application he filed with the county.

Morais bought the property in his own name; I found it only because he wrote a glowing testimonial for his real estate agent, who sells properties in Sunny Isles. “I would like to say that ever since I met John Gee, my dealings with him have been nothing but exceptionally good!” Morais said in a comment posted on the agency’s website.

Morais also became a major shareholder in Coral Gables–based EuroBank, which in 2011 had about $95 million in assets. In June of that year, the South Florida Business Journal reported that federal regulators planned to hit EuroBank “with a cease and desist order over its alleged violations of banking laws.” The feds said the bank has “engaged in lax loan administration and underwriting,” as well as “extended loans to borrowers without properly evaluating their global cash flow and ability to repay,” and “operated with insufficient capital” in relation to its asset quality.

Around the same time, Banco do Brasil submitted an application to EuroBank shareholders seeking to buy the bank, which it subsequently did. The application described Morais as the third-largest shareholder, holding a 9.8 percent stake.

Meanwhile, the highly regarded Angolan journalist Rafael Marques reported last year that Morais owned four apartments at a luxury housing complex in Estoril, a coastal suburb of Lisbon. “The complex contains some of Portugal’s most expensive apartments, priced at between one million and five million euros per unit,” Marques reported. He said the complex was well known as “the Angolans' building,” owing to the fact that so many government officials held properties there.

This is a sidebar to “Miami: Where Luxury Real Estate Meets Dirty Money,” a story that was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations.

The post How Jose Pedro de Morais Jr. Came to Miami appeared first on Type Investigations.

Last week, the London-based Bureau of Investigative Journalism published a story about a sting against Bell Pottinger, a major British public relations and lobbying firm. Journalists working for the Bureau approached the firm in the guise of seeking PR help for Uzbekistan, the torture-loving former Soviet republic that has been known to boil prisoners to death. A Bell Pottinger representative told the undercover journalists it could introduce Uzbek officials “into political and media circles,” and help them “get better known by a lot of the key decision makers.”

In the course of their research, the Bureau met with lobbyists and PR agents who boasted of their ability to get think tanks to publish sympathetic reports about clients. They also talked about winning favorable media attention by setting up supposedly independent public events and hyping business opportunities for domestic companies.

In the United Kingdom, such international lobbying is virtually invisible.

“In the U.S. there is a measure of statutory transparency: lobbyists working for foreign governments have to publicly disclose their client contracts and state when and why they've been in contact with politicians and the media,” the Bureau noted. “In the UK, there's no such obligation.”

While it's true that U.S. lobbying and PR firms here are subject to disclosure laws, they and their clients have been able to skirt or even evade them. As I reported here last week, foreign governments and interests seeking influence in Washington use a host of tactics — some identical to what Bell Pottinger was proposing for Uzbekistan — that are largely unregulated and free of disclosure requirements. These include making contributions to think tanks, universities and non-profit groups, and setting up business associations that advocate for better political ties with the U.S. but aren't legally defined as lobbying organizations.

The Uzbek regime of Islam Karimov, a Soviet-era hack in power since 1991 is a classic example. Uzbekistan does not have official lobbying representation in Washington, yet it has many American friends advocating on its behalf — and because they don't register as lobbyists it's hard to know exactly what they're up to.

Chief among them is the American-Uzbekistan Chamber of Commerce (AUCC), whose board is made up of executives from U.S. companies with interests in Uzbekistan, such as Boeing, Honeywell and General Electric. The group's stated purpose it to “promote trade and investment,” but it also pushes for “strong ties” between the two governments on the basis of its “excellent working relations” with both.

The AUCC is chaired by attorney Carolyn Lamm, a former head of the American Bar Association who in the past has lobbied for such authoritarian states as Libya and the former Zaire, ruled by strongman Mobutu Sese Seko. Between 1997 and 2005 her law firm, White & Case, lobbied for the Karimov regime. Lamm has also served as legal counsel of Zeromax, a Swiss-registered holding company widely reported as controlled by Gulnara Karimova, the president's powerful daughter. (A September 2005 WikiLeaks cable, written by a U.S. diplomat in Tashkent, described Gulnara as “the single most hated person in the country.”)

Following the 2005 Andijan massacre — in which Uzbek security forces slaughtered hundreds of unarmed protesters — the AUCC's then-president, James Cornell, wrote to Secretary of State Condoleezza Rice urging her to “not rush to conclusion or ignore the thorough investigation carried out by the government of Uzbekistan,” and saying that downgrading relations with Karimov threatened “several vital interests of the United States.”

More recently, AUCC board members and the Uzbek ambassador to Washington held a briefing with House Foreign Affairs Committee staffers. During their meeting last August, they talked up “job creation” linked to American exports to Uzbekistan and “offered their help, expertise and knowledge” for future congressional visits to Uzbekistan.

Last September 28, the AUCC held its annual Business Forum in Washington, which was attended by representatives of “international financial organizations, think tanks and policy institutions” and featured speeches by Uzbek and U.S. government officials. AUCC President Tim McGraw of NUKEM — the aptly named company that serves as an intermediary between uranium producers and nuclear energy utilities — told the crowd that his group's efforts sought to “fundamentally strengthen the overall bilateral relationship.”

The same day, in what was surely no coincidence, President Obama spoke with Karimov by phone and “pledged to continue working to build broad cooperation between our two countries.” This was just four days after a Senate committee, at Obama's request, voted to waive Bush-era restrictions on military aid to the Karimov dictatorship in exchange for its help moving military supplies into Afghanistan.

All of which was surely gratifying to the dignitaries gathered at the AUCC forum.

My request for an interview with Lamm, made through the AUCC, was declined. Asked if the Chamber had advocated for the waiver on military aid to Uzbekistan, Elena Son, the organizations' executive director, said by email, “The AUCC asked the U.S. Government about the waiver for informational and better awareness purposes.” The Chamber, she said, was “not a lobbying organization” and its “advocacy efforts aim to inform the American public and governing institutions about why better bilateral relations with the Republic of Uzbekistan matter to U.S. geopolitical and business interests.”

The teachings of “Starrmenbashi”

Among the speakers at the AUCC's event was Professor S. Frederick Starr of the Central Asia-Caucasus Institute (CACI) at Johns Hopkins University, who has been a reliable champion of Karimov and other former East Bloc tyrants. Following the 2005 Andijan massacre, Starr went on NPR and echoed Karimov's justification of the crackdown as necessary because Islamic militants were behind the demonstration. CACI later co-sponsored an event (along with the Hudson Institute) that debuted a short video offering the Karimov regime's take on the Andijan crackdown. An account of the event at EurasiaNet.org said that Starr “sought to undermine” critical reports about Andijan by saying journalists “had an anti-government agenda” and “were lying.”

CACI refused to provide me with a current list of donors, but over the years they have included a number of U.S. oil companies active in the region; Newmont Mining, which has big interests in Uzbekistan; and the Joint Chiefs of Staff and the Defense Intelligence Agency. Caspian governments have funded individual scholars at CACI, which has also boasted in a brochure about the Institute of its “close contacts with the Washington embassies of the various countries in the region.”

In his approving comments about Caspian governments Starr — an advisor on Soviet affairs to Presidents Ronald Reagan and George H.W. Bush — sounds like one part old-line Soviet apparatchik and one part Borat. One former student of Starr's told me that he became notorious in the classroom “for his predictable whitewashing of each and every central Asian despot” — even Saparmurat Niyazov — the former leader of Turkmenistan who built a cult of personality to rival Stalin's and who named himself “Turkmenbashi the Great.” So ardent was Starr in talking up Niyazov that students took to calling him “Starrmenbashi.”

Starr has been just as big a fan of Turkmenistan's new leader, Gurbanguly Berdymukhamedov, who won office in 2007 with 89 percent of the vote in an election following his predecessor's death. “I am in complete amazement from everything I have seen here!” the State News Agency of Turkmenistan quoted Starr as saying while touring the country in November of 2010.

Last February, Starr gave a talk at CACI in which he lauded Berdymukhamedov's commitment to openness and technology. This was less than two months after Turkmenistan had shut down the country's largest mobile network. Starr also praised Berdymukhamedov's books — which include a two-volume opus on medicinal plants — which he said had allowed him to “understand the logic of the current unprecedented successes of the Turkmen government.”

In a reply to a request for comment, Starr said that the purpose of his trip to Turkmenistan “was to conduct research on a book on the 8th to the 11th century, to visit archaeological sites connected with that work and to consult with several scholars who have conducted research on the period in question. My trip was paid for by CACI, which receives no money from Turkmenistan or any firm working there, and by me personally.”

Funding friendly commentary

Former Soviet interests have also made good use of other well-known Washington institutions to buff their images. Victor Pinchuk, the Ukrainian oligarch, sits on the board of the Peterson Institute for International Economics, and is one of its largest donors. Pinchuk grew rich by buying state-run firms privatized during the 1994 to 2005 reign of President Leonid Kuchma. It has frequently been alleged that Pinchuk was the beneficiary of sweetheart deals, a suspicion encouraged by the fact that he is married to Kuchma's daughter.

Peterson Institute senior fellow Anders Aslund wrote a book, “How Ukraine Became a Market Economy and Democracy,” which included criticism of Kuchma but on balance presented a flattering portrait. One section, called “Kuchma Saved His Country,” included an interview with the former president, who replied to penetrating questions from Aslund such as, “What was your greatest deed?” and, “What else are you most proud of?”

Last May, the Washington Post ran an op-ed by Aslund that sharply criticized the “sinister” rule of the current government, which he said had used “the judicial system to repress opponents.” He noted in this regard that prosecutors had “surprisingly” charged Kuchma with involvement in the murder of journalist Georgy Gongadze in 2000.

Aslund's general criticism of the current government of Ukraine is not without merit, but his byline identified him only as a senior fellow at Peterson. Nowhere was it disclosed that he and his think tank receive substantial funding from Pinchuk, whom he portrayed in the piece as a political martyr. Furthermore, Pinchuk's father-in-law has long been suspected of ordering the journalist's murder. Whether he is ultimately proved guilty or not, there was little “surprising” about Kuchma being charged in the case.

“In no way does [Pinchuk] try to influence the views expressed by me or other members of the Peterson Institute,” Aslund told me by email. “Obviously, before accepting grants from anybody, you make sure that it will not influence your views or cause any other conflict of interest.”

(Disclosure: Pinchuk has also contributed to programs funded by George Soros's Open Society Foundations, which funds some of my work.)

Kazakhstan is yet another repressive former Soviet republic that has found strong advocates in Washington. In 2008, CACI published three upbeat reports on economic and political developments in the country without mentioning that the Kazakh government had paid for them through one of its Washington lobbying firms, APCO Worldwide.

Last April Kazakhstan held an election in which long-time ruler and de facto president-for-life Nursultan Nazarbayev won 95.5 percent of the vote. Observers from the Organization for Security and Co-operation in Europe noted “serious irregularities.” Two officials from Freedom House described the election, as “devoid of any real choice, much as in the days of Soviet rule.”

But Margarita Assenova, executive director of the U.S.-based Institute for New Democracies (IND), which describes itself as a “nonprofit organization dedicated to promoting good governance,” had a sharply different view.

“The people credit the wise leadership of Nazarbayev for peace, stability, economic development and ethnic harmony in Kazakhstan,” said Assenova of the outcome. The Kazakh government cited her statement as proof that the voting was fair.

Unmentioned in the statement was that the IND's connections to the Kazakh government. According to its most recent Internal Revenue Service filing, IND seeks to “strengthen U.S.-Kazakh relations.” The documents also show the Kazakh government had previously paid the Institute and the Center for Strategic and International Studies (CSIS) $290,000 to write reports about alleged democratic reforms under Nazarbayev.

The IND and CSIS also hosted a Washington conference on Kazakhstan that included a few critical voices but was stacked with pro-Nazarbayev viewpoints. The IND published a report on the conference that sanitized criticism of the Kazakh government. (Assenova did not reply to requests for comment.)

The credibility of Kazakhstan's election was also vouched for by a group of observers sent by the International Tax and Investment Center (ITIC), which is headquartered in Washington and has offices in Kazakhstan. The group is headed by Daniel Witt, a former vice president of Citizens for a Sound Economy, the predecessor organization to Dick Armey's conservative pro-business group FreedomWorks, which helped spur the Tea Party. The result of the balloting, he said, “bespeaks a yearning to maintain national stability and political continuity in Kazakhstan under the leadership that has delivered growing prosperity to all.”

Though it claims to be an “independent” research center, ITIC's sponsors include numerous oil companies with stakes in Kazakhstan, as well as the Kazakhstan Petroleum Association. The group's website even carries an endorsement from Nazarbayev. “ITIC has always insisted upon complete academic freedom for our observers,” Witt told Transitions Online Newsletter, which reported on the organization's observer role. ITIC also whitewashed Kazakhstan's 2004 parliamentary and 2005 presidential election.

Frederick Starr, the intrepid professor, served as an observer on both of those missions.

Research support for this article was provided by The Investigative Fund at The Nation Institute, now known as Type Investigations.

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Ever since last February, when security forces in Bahrain brutally cracked down on demonstrators at the Pearl Monument, human rights groups have documented extensive violence by the government against pro-democracy protesters. In late November, an independent commission hired by the country's king released a report that said 35 people had been killed during the protests, including five detainees who were tortured to death, and that hundreds more had been injured and nearly 3,000 arrested.

But to judge from Tom Squitieri — the self-described “stargazer, Award winning reporter, communications crafter” who has tweeted and blogged about events in Bahrain for Huffington Post and the Foreign Policy Association — demonstrators are largely to blame for the violence. In one item he wrote about a girl named Zahra who “was attacked with an iron bar wielded by protestors” and a demonstrator named Ali who was killed “after being hit by a police car.” While Ali's family claimed “he was deliberately run down” by the cops, Squitieri suggested it was more likely that “the police car swerved out of control after skidding on oil poured on the road by protestors.”

Squitieri states in his blog posts that he “works with the Bahrain government on media awareness and press freedom,” which is an odd way of describing work that amounts to propaganda. But unless you count his work at NewsMax, the right-wing media organization, Squitieri hasn't been a journalist since 2005, when he resigned from USA Today for plagiarism. Nor does he mention anywhere that he is an employee of Qorvis Communications, a Washington firm that is registered to lobby for the government of Bahrain.

Traditionally, people think of foreign lobbyists as seeking to directly influence staffers on Capitol Hill and policymakers at the State or Defense Departments. But foreign governments have increasingly sought to augment this conventional mode of lobbying with other tactics that might be described as meta-lobbying.

Now lobbyists (for foreign and domestic clients) seek to advance their clients' interests in Washington through other means: making contributions to think tanks and universities; arranging for allegedly independent pro-democracy groups to shill for their bogus elections, funding bilateral business associations that focus on trade issues while advocating, directly or indirectly, for enhanced political ties; and influencing the media and public opinion by hiring American opinion-makers to mouth their talking points.

U.S. laws on traditional lobbying are flimsy enough, but these new meta-lobbying tactics are largely unregulated and free of disclosure requirements — which of course makes them all the more effective and useful. As one Washington lobbyist told me, “Access lobbying is dead. Congress is gridlocked so meetings on the Hill are useless. Now it's all about perception and molding public opinion. That's why so many lobby firms have become integrated, and do so much work on the PR side.”

The Washington influence business has been in overdrive recently, as the Arab Spring erodes (Syria) or shakes (Egypt) or destroys (Libya) the U.S. government's alliances in the Middle East. And even before foreign governments and their hired hands began scrambling to adapt to the region's democratic awakening, they had begun seeking to shape perception by hiring former journalists or paying influential “opinion leaders” to support their regime or their cause.

The departed Libyan leader Moammar Gadhafi recruited prominent academics and former officials through the Monitor Group of Cambridge, Mass., which was charging his regime $250,000 per month to burnish its image. Among those the Monitor Group lined up — in exchange for big fees — were historian Francis Fukuyama, the Middle East scholar Bernard Lewis, neoconservative Richard Perle (who twice traveled to Libya for meetings with Gadhafi) and professor Joseph Nye of Harvard, who also visited Libya and wrote a favorable story afterward for the New Republic. Nye also offered advice to Saif Gadhafi, the colonel's son, on the dissertation he wrote for the London School of Economics.

Gadhafi also counted on support from the Washington-based U.S.-Libya Business Association. It was founded and financed by U.S. oil companies that were unhappy about the pace at which the Washington-Tripoli relationship was developing after George W. Bush's administration forged a rapprochement with Gadhafi's regime in 2004. Despite the political thaw, there remained strong opposition in Congress to Gadhafi's regime due to his past support of terrorism. Meanwhile, European governments had been far less squeamish about embracing the colonel, giving their oil companies a leg up on American firms in the race to win concessions in Libya.

To supplement their stable of K Street lobbyists dedicated to improving ties with Tripoli, Occidental, ConocoPhillips, ExxonMobil, Marathon Oil, Chevron and other companies set up the USLBA. According to its federal tax filings, the association sought to “educate the public on the importance of US-Libya trade and investment, and facilitate the commercial and diplomatic dialogue between the two countries.” At least seven of its eight directors were registered lobbyists for oil companies.

David Goldwyn — who had served at the Energy Department under Bill Clinton and who then ran a consulting firm that provided “political and business intelligence” to oil companies — was hired to head the group. The USLBA spent over $1 million between 2006 and 2009, of which more than $600,000 was used to pay Goldwyn's firm.

In 2008, Gadhafi demanded that American oil companies help Libya win an exemption from a law signed by President Bush that allowed American victims of terrorism to seize assets of countries found liable for attacks. Libya was a specific target of the law. The USLBA was happy to help out. Working in close collaboration with official lobbyists for Libya and the oil companies, the association urged Secretary of State Condoleezza Rice to pursue a waiver for Libya, according to a recent Bloomberg story. Rice and three other Bush Cabinet members soon wrote congressional leaders saying that the exemption was needed or there would be “a chilling effect on potentially billions of dollars in investments by U.S. companies in Libya's oil sector.”

Congress soon passed a measure that gave Libya the immunity it sought. Goldwyn, meanwhile, took a business delegation to Libya in December of 2008 and talked about the “fantastically warm reception” they received from senior government officials.

In 2009, Goldwyn joined the Obama administration as the State Department's Coordinator for International Energy Affairs. He resigned earlier this year and returned to the private sector as an energy consultant. Goldwyn declined a request for comment about his work for Libya, other than to say, in response to a question about why he had never registered as a lobbyist for the USLBA, that he was not legally required to because he didn't spend sufficient hours to trigger the disclosure rule.

The USLBA has seamlessly transitioned into the post-Gadhafi era. Its website bears no mention of the colonel and now carries news about the new government's naming of an interim cabinet and the arrival in the U.S. for “urgent medical care” of two dozen wounded Libyan fighters. Never mind that they were wounded fighting the government of the association's former pal Gadhafi.

Bahrain's chief Washington lobbying organization is Qorvis, which also represents controversial autocratic clients such as Saudi Arabia and Equatorial Guinea. Qorvis doesn't seem to do much for Bahrain (or its other clients) other than put out a steady stream of press releases at PR Newswire. For example, after Bahraini security forces in July raided the offices of Doctors Without Borders — human rights activists allege this was part of the government's effort to deny medical services to injured protesters — Qorvis distributed a statement saying the medical group was to blame because it had failed to obtain the proper permit to operate in the country.

Such releases are not aimed directly at public opinion so much as at Google and other search engines. A steady stream of press releases serves to push news stories lower in search engine returns; when it comes to Qorvis' clients, the news is almost invariably bad so burying it makes sense. “Qorvis' releases are pure propaganda and it doesn't even bother flogging them to journalists,” said the lobbyist cited above. “They just trot the stuff out so there's something else to read on Google when one of their clients fucks up.”

Then there's Squitieri, who has worked for a range of domestic and foreign clients through his own P.R. firm, TS Navigations. On the domestic front, he has helped — according to his list of “key accomplishments — ”craft and lead the campaign to reposition Taser International from a severe crisis communication dilemma“ and won an exemption for an unnamed tobacco processing company from ”congressional legislation giving the FDA regulatory control over tobacco.“

On the foreign front he (like Qorvis) worked for the Kurdistan Regional Government, whose representatives he hooked up with journalists and ”professionals in the wider communications community“ including ”sign and banner makers“ and ”event planners.“ He also wrote speeches for Kurdish officials, like one delivered to the World Affairs Council in West Palm Beach earlier this year that had his Kurdish client quoting '60s Yippie Abbie Hoffman about the virtues of democracy.

For Bahrain, Squitieri tweets and blogs. He puts on airs of objectivity and impartiality yet his paymaster's point of view, delivered in hackneyed prose, is obvious.

”As Bahrain wheezes and convulses in its uncertain steps,“ he wrote for Huffington Post, in October, ”the gray is slowly emerging more in the reports of those spending at least a little time letting all the senses embrace.“ He described Bahraini protesters seeking a more democratic government as being driven by ”anger without a purpose“ and called them ”foot soldiers for puppet masters with a greater agenda,“ referring obliquely to Iran. (Incidentally, the newly commissioned Bahraini government report said it found no evidence that the Iranians were behind the protests.)

Even though he works for Qorvis, Bahrain's registered lobbying firm, Squitieri insisted in an email that he does not ”engage in any lobbying.“ He describes his work for Bahrain as ”media awareness, media training and helping to identify possible stories.“

Asked why Squitieri's blog posts weren't identified as paid product for Qorvis, Matt Lauer of the firm said by email, ”Tom's blogs are his own thoughts, but he does disclose his affiliation with the government.“

Incidentally, the Independent of London reported this week on a journalistic sting operation on Bell Pottinger, a major British P.R. firm that Qorvis works with on Bahrain. The sting — modeled on a similar piece I did for Harper's several years ago — involved reporters posing as agents of the government of Uzbekistan, who contacted Bell Pottinger to see if the firm would run a P.R. campaign on behalf of that country's dictatorial regime.

Bell Pottinger was keen to do so and gave a presentation to the undercover journalists during which it promised it would utilize the ”dark arts“ to influence public opinion for Uzbekistan. That included creating ”third-party blogs“ – which would look independent but be run by the P.R. firm — that would, along with other tactics, help bury bad news about the country on Internet searches. ”The ambition obviously is to drown that negative content and make sure that you have positive content out there online,“ a Bell Pottinger representative told the undercover reporters.

All of which appears to be the very model that Qorvis, with the help of Squitieri, employs on behalf of Bahrain.

Research support for this article was provided by The Investigative Fund at The Nation Institute, now known as Type Investigations.

The post How Bahrain Works Washington appeared first on Type Investigations.

The owner of the estate at 3620 Sweetwater Mesa Road, which sits high above Malibu, California, calls himself a prince, and he certainly lives like one. A long, tree-lined driveway runs from the estate's main gate past a motor court with fountains and down to a 15,000-square-foot mansion with eight bathrooms and an equal number of fireplaces. The grounds overlook the Pacific Ocean, complete with swimming pool, tennis court, four-hole golf course, and Hollywood stars Mel Gibson, Britney Spears, and Kelsey Grammer for neighbors.

With his short, stocky build, slicked-back hair, and Coke-bottle glasses, the prince hardly presents an image of royal elegance. But his wardrobe was picked from the racks of Versace, Gucci, and Dolce & Gabbana, and he spared no expense on himself, from the $30 million in cash he paid for the estate to what Senate investigators later reported were vast sums for household furnishings: $59,850 for rugs, $58,000 for a home theater, even $1,734.17 for a pair of wine glasses. When he arrived back home — usually in the back seat of a chauffeur-driven Rolls-Royce or one of his other several dozen cars — his employees were instructed to stand in a receiving line to greet the prince. And then they lined up to do the same when he left.

The prince, though, was a phony, a descendant of rulers but not of royals. His full name is Teodoro Nguema Obiang Mangue — Teodorin to friends — and he is the son of the dictator of Equatorial Guinea, a country about the size of Maryland on the western coast of Africa. A postage stamp of a country with a population of a mere 650,000 souls, Equatorial Guinea would be of little international consequence if it didn't have one thing: oil, and plenty of it. The country is sub-Saharan Africa's third-largest producer of oil after Nigeria and Angola, pumping around 346,000 barrels per day, and is both a major supplier to and reliable supporter of the United States. Over the past 15 years, ExxonMobil, Hess Corp., and other American firms have collectively invested several billion dollars in Equatorial Guinea, which exports more of its crude to the U.S. market than any other country.

Energy revenues have flowed into the pockets of the country's elite, but virtually none has trickled down to the poor majority; since the oil boom began, the country has rocketed to one of the world's highest per capita incomes — and one of its lowest standards of living. Nearly four-fifths of its people live in abject poverty; child mortality has increased to the point that today some 15 percent of Equatorial Guinea's children die before reaching age 5, making it one of the deadliest places on the planet to be young.

Teodorin's 68-year-old father, Brig. Gen. Teodoro Obiang Nguema Mbasogo, seized power in a 1979 coup and has made apparent his intent to hand over power to a chosen successor. Obiang has sired an unknown number of children with multiple women, but 41-year-old Teodorin is his clear favorite and is being groomed to take over. That's a scary prospect both for the long-suffering citizens of his country and for U.S. foreign policy. As a former U.S. intelligence official familiar with Teodorin put it to me, “He's an unstable, reckless idiot.”

He's also, according to thousands of pages of documents I've reviewed from multiple federal and congressional investigations of the Obiangs over the last decade, fantastically corrupt. As the minister of agriculture and forestry in his father's government, Teodorin holds sway over the country's second-largest industry. Investigators have documented how he has run his ministry like a business, operating several logging companies alongside the agency meant to regulate them. Documents from a secret joint investigation by the U.S. Justice Department and the Immigration and Customs Enforcement (ICE) agency quote sources alleging that Teodorin supplemented his modest ministerial salary of $5,000 per month with a “large 'revolutionary tax' on timber” that he ordered international logging firms to pay “in cash or through checks” to a forestry company he owned. Investigators suspect a large chunk of his assets was derived from “extortion, theft of public funds, or other corrupt conduct,” stated a 2007 Justice report detailing the probe, which I first reported on for the Harper's website in 2009. Teodorin has not only assembled a vast fortune, he's routed much of it into the United States; a detailed report last year by the Senate Permanent Subcommittee on Investigations found that he used shell companies to evade money-laundering laws and funnel more than $100 million into the United States.

All those millions purchased Teodorin a lavish and debauched lifestyle, according to allegations in a series of previously unreported civil lawsuits filed against him by a dozen former employees at the Malibu estate. They claim they were cheated out of salaries, overtime wages, and work-related expenses for items ranging from gasoline to toilet paper, while being forced to support a tawdry setup straight out of the movie The Hangover: There were drug “binges,” as one ICE document claimed, escort service girls, Playboy bunnies, and even a tiger. “I never witnessed him perform anything that looked like work,” reads a legal filing on behalf of Dragan Deletic, one of Teodorin's former drivers. “His days consisted entirely of sleeping, shopping and partying.” (Without responding to specifics, a Los Angeles lawyer for Teodorin, Kevin Fisher, dismissed the charges as “salacious” and “extreme,” adding, “The allegations have not been verified and the people making them are not subject to perjury, so I don't give a great deal of credence to them.”)

After years of wrangling, most of the cases have now been settled, and the employees signed agreements that prevent them from speaking about Teodorin. But prior to that I interviewed several plaintiffs and their attorney, Jim McDermott, and read the case filings. I also reviewed thousands of pages of U.S. and foreign investigations that involve Teodorin. They are incredibly damning.

The larger issue raised by all this is why the U.S. government — after going to the effort to produce this mound of information pointing to Teodorin's flagrant corruption and apparent misuse of the U.S. banking system — has been unwilling to do anything about it. “I'm surprised that he's still allowed in the country based on all of the information contained in the Senate report and uncovered by other investigators and reporters,” said Linda Candler, a former Justice Department prosecutor who specialized in international criminal investigations. Indeed, legal experts say that Teodorin shouldn't have been allowed to enter the United States since 2004, when President George W. Bush issued Proclamation 7750, which bars corrupt foreign officials from receiving U.S. visas. “No country is going to create wealth if its leaders exploit the economy to enrich themselves,” said Bush's successor Barack Obama, whose administration pledged to “vigorously” enforce 7750. “We have a responsibility to support those who act responsibly and to isolate those who don't.”

And yet no formal action against Teodorin has been taken, despite an investigation whose stated goal, according to one of the Justice Department documents, was to shut down the flow of money into the United States “obtained through kleptocracy” by the Obiangs. Why? U.S. officials declined to discuss the ongoing cases on the record or speak harshly about Equatorial Guinea; it certainly appears to be the familiar story of a U.S. government unwilling to offend an important oil partner — the same coddling that has produced such stellar results in the past with Saudi Arabia and other energy-rich, democracy-poor Middle East allies. The Obama administration last year did help block UNESCO, the U.N. cultural agency, from accepting $3 million from Obiang to endow a science prize in his name — but only after a public outcry raised by media reports calling attention to a prize the United States had previously been willing to overlook. Otherwise the administration has said little publicly about Equatorial Guinea's awful record of corruption and human rights violations, and it has failed to impose sanctions against Teodorin or the state he is set to inherit. As of late 2010, years after the Justice Department probe began, investigators were still seeking to identify expert witnesses who could tell them about the early days of the Obiang regime.

To date, the only substantial actions taken against the Obiang clan in the United States have been prompted by the efforts of McDermott, the plaintiffs' attorney, and Superior Court judges in California. “In our system of international politics, there's a lot of ass-kissing, especially if there's oil involved,” McDermott told me. “But in the cases that have gone to judgment thus far, the buck has stopped with our state court, which doesn't give special treatment to anyone, including Teodorin. That's the beauty of the rule of law.”

But in Equatorial Guinea, the Obiangs are the law. The only former Spanish colony in sub-Saharan Africa, Equatorial Guinea gained independence in 1968. The country's first ruler was Francisco Macias Nguema, a crackpot dictator who named himself the “Implacable Apostle of Freedom” and “The Sole Miracle of Equatorial Guinea.” In 1979, by which time his regime had murdered as many as 50,000 of his opponents — real and imagined — the Sole Miracle was overthrown and executed by his nephew, Obiang père. Teodoro was then only 37 years old, but he was already skilled in the art of dictatorship after running Macias's National Guard and Black Beach prison, a notorious torture chamber for political prisoners. Over the past three decades, Obiang has been thrice “elected” in sham ballots, most recently in 2009 when he won 95.4 percent of the vote (a record low; he peaked with 97.85 percent in 1996).

The United States historically had little interest in Equatorial Guinea and closed its embassy there in 1995 after the Obiang regime issued threats against Ambassador John Bennett, who had lodged protests over human rights conditions. But in an unfortunate twist, American companies soon discovered vast reserves of oil and gas in the waters off Equatorial Guinea, and successive U.S. governments have been slowly but steadily backtracking ever since. The key step came in 2003, when after an intense lobbying campaign by the oil industry, Bush approved the reopening of the U.S. Embassy in Malabo, Equatorial Guinea's capital. (The embassy formally reopened three years later.) “With the increased U.S. investment presence, relations between the U.S. and the Government of Equatorial Guinea have been characterized as positive and constructive,” notes the State Department's country profile. Relations may be good, but the official U.S. assessment of the country is much less rosy. The State Department's most recent global human rights report cited abuses in Equatorial Guinea including “torture of detainees and prisoners by security forces; life-threatening conditions in prisons [and] arbitrary arrest.” Freedom House's 2011 “Freedom in the World” survey put the country in its “worst of the worst” category for governments that violate political rights and civil liberties, along with North Korea, Sudan, and Turkmenistan.

Equatorial Guinea's economy depends almost entirely on oil, which generated revenues last year of well over $4 billion, giving it a per capita annual income of $37,900, on par with Belgium. “The oil has been for us like the manna that the Jews ate in the desert,” Obiang has said. It certainly has been for him. Obiang placed eighth on a 2006 list by Forbes of the world's richest leaders, with a personal fortune estimated at $600 million. His population hasn't fared so well. Human Rights Watch reports that one in three of Obiang's impoverished subjects dies before age 40. Obiang's corruption is hardly unique among oil-rich dictators. French authorities have uncovered 39 properties in France and 70 French bank accounts held by the family of President Omar Bongo, who ruled Gabon for 41 years until his death in 2009. (Soon thereafter, his son, Ali Bongo, took power.) Denis Sassou-Nguesso, the leader of Congo-Brazzaville, has bought a variety of French properties with tens of millions of dollars in oil revenues funneled out of his country. “All the leaders of the world have castles and palaces in France, whether they are from the Gulf, Europe, or Africa,” Sassou-Nguesso recently said by way of explanation. In Central Asia, fantastically rich new ruling families have exploited energy wealth with great panache too, from throwing birthday parties featuring Elton John to doling out luxury villas to friends and family.

But Obiang watchers say the scale of his regime's looting appears to be approaching the sort of baroque levels reached before by historic crooks like Zairian dictator Mobutu Sese Seko, America's closest friend in Africa during the Cold War, and Nigerian Gen. Sani Abacha, who funneled several billion dollars into Swiss accounts before dying in 1998 of undetermined causes, reportedly in the company of two teenage prostitutes. Many African regimes have degenerated into kleptocracy, but Equatorial Guinea's corruption is so entrenched, scholar Geoffrey Wood has written, that it “is one of the few African countries that 'can be correctly classified as a criminal state.'”

A few members of Congress have criticized Obiang — Michigan Sen. Carl Levin once compared him to Saddam Hussein — and the Permanent Subcommittee on Investigations has twice investigated the regime, in its report on Teodorin last year and in 2004, when it found that Obiang personally controlled as much as $700 million in state funds deposited at Riggs Bank in Washington, D.C., overwhelmingly by U.S. oil companies. The Senate panel said Riggs opened multiple accounts for Obiang and helped the president stash his wealth in offshore shell corporations; it was eventually hit with a huge fine for this and similar dealings with Chilean dictator Augusto Pinochet and for violating the Bank Secrecy Act.

But in general, the U.S. government has preferred to look the other way since the oil boom hit, aside from the criticism contained in the pro forma annual State Department human rights reports and milquetoast appeals for better behavior. “We've raised our strong concerns about the country's poor human rights record consistently in meetings with officials from EG up to the highest level,” a State Department official told me by email.

To ensure that Equatorial Guinea stays within the reasonable limits of Washington's good graces, Obiang has hired a team of American lobbyists and PR specialists, among them Lanny Davis, former special counsel to President Bill Clinton and now a Washington lobbyist who has also represented the 2009 Honduran coup plotters and, briefly, Laurent Gbagbo, the human-rights-abusing leader of the Ivory Coast who refused to step down after losing elections late last year. “I've kidded him he'd do better to win by 51 percent than 98 percent,” Davis told the New York Times about Obiang — the type of sage advice for which Equatorial Guinea pays him a cool $1 million a year. The government also retains Qorvis Communications, which for $15,000 per month emails out a steady stream of news releases highlighting all manner of heartwarming news about Equatorial Guinea, from the Obiang government's alleged support for animal conservation to native daughter Matinga Ragatz being named Michigan's “Teacher of the Year.” Teodorin separately pays the firm $55,000 per month to help polish his image, lobbying disclosure reports say.

Early one evening this past summer, I met two of Teodorin's PR handlers from Qorvis, Matt J. Lauer and Seth Pietras, at a bar in Washington. The two men unknotted their ties in unison after slipping onto a couch and ordering drinks. Allegations of human rights abuses in Equatorial Guinea are highly exaggerated, they said, citing as evidence their experience during a trip to the country. “We could walk around at night and talk with people and no one interfered with us,” said Lauer. “No one is saying there are no problems, but it's not North Korea.” They were similarly miffed about Teodorin's reputation as a high-rolling kleptocrat, saying that officials from a number of energy-rich countries also live lavishly, while their client was unfairly singled out. Pietras noted that Bush had reportedly been a drinker and partier as a younger man before becoming more serious. Teodorin, he offered, “is at the point where he's thinking about his legacy.”

If so, then some serious soul-searching is in order. In the fall of 1991, Teodorin, then 22, arrived on the posh Malibu campus of Pepperdine University to enroll in an English-as-a-second-language course. Walter International, a Houston-based energy firm that then had a stake in Equatorial Guinea's as-yet-untapped offshore fields, financed Teodorin's studies. Walter also agreed to pick up Teodorin's living expenses, which proved to be a costly mistake. Tuition was a mere $3,400 and included boarding at Pepperdine, but Teodorin deemed the dormitory unsuitable and shuttled between two off-campus residences: a rental home in Malibu and a suite at the Beverly Wilshire hotel. He rarely attended class, instead spending much of his time shopping in Beverly Hills. Teodorin dropped out of the program after five months; Walter International's tab came to about $50,000. The aggrieved firm complained to Ambassador Bennett, and the story later came out in public.

Teodorin traveled the world in subsequent years but returned frequently to the Los Angeles area. In 2001, he bought a $6.5 million home on Antelo Road in Bel Air, across from actress Farrah Fawcett. He never moved in, however, lamenting to a real estate agent that in retrospect the house was too contemporary for his taste.

Teodorin dreamed of being a hip-hop mogul and for a time owned and operated a label whose name was derived from his initials: TNO Entertainment. TNO's most significant project appears to have been a flop titled No Better Than This by Won-G — a fitting collaboration given that the rapper, whose real name is Wondge Bruny, has described his father as a former military official under “Baby Doc” Duvalier, the Haitian dictator deposed in 1986.

Teodorin continued to burn through cash during these years. He lived for a time at a Paris hotel off the Champs-Élysées; a French TV crew captured him on a shopping spree during which, it reported, he bought more than 30 suits in a single day. In 2004, he bought two estates worth a combined $7 million in Cape Town. But he and his family generally stayed off the radar screen in the United States — until the Riggs scandal broke.

Lesser kleptocrats might have turned tail and fled, but not Teodorin. He employed two lawyers to set up shell companies and associated bank accounts that he controlled but on which his name never appeared, according to the 2010 Senate report. It found that the companies were merely vehicles for him to receive and spend funds wired from abroad.

In 2006, Teodorin used one of the firms, Sweetwater Malibu LLC, to purchase the Malibu estate, which is among the largest homes in the private gated community of Serra Retreat. When it came to spending habits, Teodorin wasn't to be outdone by his Hollywood-star neighbors. He owned at least three dozen luxury cars, including seven Ferraris, five Bentleys, four Rolls-Royces, two Lamborghinis, two Mercedes-Benzes, two Porsches, two Maybachs, and an Aston Martin, with a collective insured value of around $10 million, according to the Senate investigation. There were far too many cars to keep at the estate, so Teodorin rented storage space in the garage of the Petersen Automotive Museum on Wilshire Boulevard and had his drivers fetch the one he wanted for an outing, a choice that sometimes depended on his attire. “I'm wearing blue shoes, so get me the blue Rolls today,” he once told Benito Giacalone, a former driver.

His favorite was a blue Bugatti Veyron, a car that can reach speeds of more than 250 miles per hour and sells new for about $2 million. One night, Teodorin parked his toy near the entrance of L'Ermitage, a favorite hangout where he'd gone for drinks. When he saw gawkers stop to admire it, he sent Giacalone back to Malibu by cab so Giacalone could drive back his second Bugatti to park next to it.

Teodorin's household staff included drivers, housekeepers, caretakers, estate managers, executive assistants, chefs, landscaping crews, and two security teams with off-duty and retired cops, and guards from Equatorial Guinea. One security unit was based at the estate while a second, called the “chase team,” tailed Teodorin on his late-night excursions into Malibu and beyond. Legal filings depict the “prince” as a nocturnal creature who generally slumbered until afternoon and sometimes as late as 9 p.m.

He dated a series of women, among them the rapper Eve, whom he designated as president, treasurer, and chief financial officer of his Sweet Pink shell company, according to the 2010 Senate report. An Equatorial Guinean logging company owned by Teodorin transferred $60,000 into Sweet Pink's corporate account, but the Union Bank of California, where it was housed, shut it down a month later, in October 2005, because it deemed any funds sent from Equatorial Guinea to be potentially of criminal origins. In 2005, Teodorin reportedly threw a party for Eve aboard the Tatoosh, a 303-foot yacht that he rented for $700,000 from its owner, Microsoft co-founder Paul Allen. An account in the New York Daily News said she later cooled on him, perhaps after hearing that his father was an accused cannibal who had eaten his political rivals. Other companions included Tamala Jones, who appeared in such movies as Booty Call and Confessions of a Call Girl, and Lindsey Evans, named Miss Louisiana Teen USA in 2008 and Playboy Playmate of the Month in October 2009.

The guest list at Teodorin's mansion invariably included an assortment of high-heeled, miniskirt-clad women procured from escort agencies, according to my interviews with former employees. Giacalone noted in his legal filings that his unofficial duties included accompanying his boss's girlfriends on elaborate shopping sprees. He also said the Dolce & Gabbana store on Rodeo Drive periodically dispatched a sales associate and tailor to Teodorin's estate in a van packed with racks of merchandise for his viewing and would close off its second-floor showroom when his girlfriends came in to shop. Giacalone said he escorted one who racked up about $80,000 in purchases, including bronze and red dresses that cost nearly $7,000 apiece. Giacalone claims Teodorin gave him the embarrassing task of paying the tab from a Nike shoebox filled with shrink-wrapped bills.

Thanks to his diplomatic passport, Teodorin routinely carried as much as $1 million in cash into the country, the ICE documents allege. Several ex-employees said he had a bag the size of a small suitcase that was forever stuffed with stacks of fresh $100 bills. Teodorin traveled on a Gulfstream V, which he bought in 2006 through a British Virgin Islands-registered shell called Ebony Shine International, Ltd. “He used it like a taxi,” Giacalone said. “He'd fly alone or use it to pick up one passenger. Once he sent it from Rio to Los Angeles to bring back his barber.” And Teodorin didn't travel light. He bought a 15-seat cargo van and had the seats taken out to fit his collection of Louis Vuitton luggage.

Records compiled by FlightAware, a firm that tracks private and commercial air traffic, show that Teodorin's ministerial duties took him to such vital destinations as Las Vegas, where a July 2009 bill for the presidential suite at the Four Seasons — made out to “Prince Teodoro Nguema Obiang” — showed a rate of $5,000 per night; to Miami, where he docked one of his two Nor-Tech 5000 speedboats; and to Palm Beach. International destinations included Bermuda, Nice, and Paris.

His fall 2009 monthlong jaunt to Maui stands out for debauched luxury, according to an account by Giacolone. Teodorin flew on the Gulfstream V and chartered a second jet for a group of household employees. He also brought along a few escort girls and shipped several sports cars and one of the Nor-Tech speedboats, painted in gaudy orange, purple, and yellow. The leaded fuel it ran on wasn't sold on the island, so it was flown in, at a cost of $600 per barrel, the former driver claimed. But the holiday was marred when the Nor-Tech capsized into the Pacific following a brief excursion. “I still have not be[en] able to confirm where the guy is from, but money is not a problem,” one bemused local wrote on an online boating forum, thehulltruth.com. “Yesterday, when it was time to drive the boat, the prince showed up at the ramp in his Bugatti.… Between the car, the boat, the royal aides (including four absolutely stunning foxes) with him, they were quite an image at the tiny ramp.”

America has been one long party for Teodorin, but his days of wine and roses might finally be coming to an end. He still owns the Malibu estate; Lauer at Qorvis insists there is no information suggesting he is barred from the United States and that he came on a visit last spring. (Qorvis declined to reply to questions about the claims of corruption and money-laundering by U.S. investigators or the allegations from the former employees suing Teodorin.) But the 2010 Senate report disclosed reams of the family's sensitive banking information, which has surely reduced his ability to move money into the country. Meanwhile, new lawsuits keep sprouting up — there are four still outstanding — and the charges grow ever more lurid, with one former employee alleging full frontal nudity by Teodorin. “He is a guest in our country who clearly does not think that the rules apply to him,” McDermott argues.

Perhaps all this helps explain why Teodorin is seldom in Los Angeles these days, spending far more time in Equatorial Guinea. It may not be Malibu, but he owns a huge beachfront estate there with a swimming pool set on a patio dotted with marble statues imported from Italy. Better yet, there are no investigators or financial regulators to worry about. Through a holding company called Abayak and other assorted business vehicles, Teodorin's father reportedly has a stake in all key economic sectors. Gabriel, Teodorin's younger brother, controls the oil sector from a post at the Ministry of Mines and Energy. His cousin runs the treasury department and oversees the budget, and another relative heads the military cabinet.

Nor does Teodorin need to fret about nosy reporters, because there is no independent radio or television in Equatorial Guinea. In 2009, the Information Ministry dismissed four journalists at a state broadcaster for “lack of enthusiasm” about the government's “merits.” A few years earlier, an announcer on Radio Asonga — owned by Teodorin — declared that President Obiang was “in permanent contact with the Almighty” and has the authority to “kill without anyone calling him to account.”

Washington's accommodation of Obiang stands in marked contrast to its harsher treatment of global thugs who aren't lucky enough to be sitting atop vast energy reserves. And the relationship between the United States and Equatorial Guinea is as oily as they come. In June 2000, with American oil company executives starting to call Equatorial Guinea the “Kuwait of Africa,” the Overseas Private Investment Corporation, a U.S. government agency, approved $173 million in loan guarantees to build an American-owned methanol plant in Equatorial Guinea, at the time its largest program ever in sub-Saharan Africa. Five months later, Rep. William Jefferson led the first-ever congressional delegation to Equatorial Guinea and was presented with a key to Malabo. (Jefferson was sentenced to prison in 2009 after being convicted on multiple counts, including conspiracy to violate the Foreign Corrupt Practices Act. Prosecutors charged that he took bribes in exchange for promoting deals in Africa, including oil concessions in Equatorial Guinea.)

In September 2005, the Obiang regime tortured dozens of detainees it had accused of having links to an alleged coup attempt the year before, according to credible human rights groups. Yet the following April, then-Secretary of State Condoleezza Rice met with Obiang in Washington and called him a “good friend” of the United States. In September 2009, two months before Equatorial Guinea held its sham presidential election, a smiling Obama posed for a photo with Obiang during a reception at the Metropolitan Museum of Art in New York, marking a minor PR coup for the regime.

American business ties have meanwhile deepened and expanded. In February 2010, Equatorial Guinea quietly awarded a $250 million contract to Virginia-based private security firm Military Professional Resources Initiative (MPRI) to provide coastal monitoring, a deal that required State Department approval. “Granting a license to MPRI is consistent with our foreign policy goal of ensuring maritime security in the Gulf of Guinea,” a State Department official told me in an email, adding that the license came with training that “includes an important human rights component and anti-trafficking provision and we believe this training is a strong tool for tangible improvement in human rights and transparency.”

Several other countries, however, appear to be going after Equatorial Guinea's leaders with more vigor. A Spanish court is investigating a complaint charging that 11 of Obiang's relatives and associates used $26.5 million in laundered money to buy houses and chalets in Madrid and the Canary Islands. A 2007 French police inquiry uncovered tens of millions of dollars' worth of assets belonging to the Obiang gang, including luxury cars owned by Teodorin worth a combined $6.3 million. Late last year, a French court ruled that a related corruption case brought by human rights groups against the Obiangs and several other African ruling families could proceed.

After years of allowing him to run amok in the United States and otherwise enabling him, the U.S. government may soon find that it needs to deal far more directly with Teodorin in the future. In a clear sign of his political ascendancy, his doting father named him vice president of the ruling party last July. Furthermore, a well-placed source told me that government officials in Equatorial Guinea have already informed American oil company executives that Teodorin will be the country's next leader. Given the size of his country's oil reserves, he's going to have leverage — and cash — for a long time to come. Note to the Obama administration: If you think he was hard to manage as the Prince of Malibu, just wait until Teodorin becomes the King of Equatorial Guinea.

Research support for this article was provided by The Investigative Fund at The Nation Institute, now known as Type Investigations.

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