William Jefferson: Tollbooth Operator on the Road to Africa Posted on Wednesday, June 7, 2006. By Ken Silverstein. SourcesUpdate: the item we reported yesterday on the home jointly owned by Letitia White, a lobbyist and former staffer to Representative Jerry Lewis, and an owner of defense contractor Trident Systems, has become part of a much larger unfolding story. Check out TPMuckraker [1][2][3], which also reported the story yesterday, and the New York Times, and look in your newspaper tomorrow. A number of reporters will likely be weighing in. As has been widely noted, Rep. William Jefferson, the Louisiana Democrat who reportedly keeps his cash in the icebox, is under investigation by the FBI for allegedly taking a bribe from the owner of iGate Inc. to arrange deals for the high-tech company in Nigeria and several other African countries. According to court records, the FBI is also looking into “at least seven other schemes in which Jefferson sought things of value in return for his official acts.”
The invaluable African Energy Intelligence, a Paris-based newsletter, reported this week that several of the seven cases “involve oil groups seeking to establish themselves” in Nigeria and other African countries, including Equatorial Guinea, Congo-Brazzaville, and São Tomé. Jefferson frequently met the leaders of all those countries, the newsletter said. I hadn't previously heard anything on a Congo-Brazzaville–Jefferson connection, but I have been told by a source familiar with the investigation that the congressman's links to Equatorial Guinea are under scrutiny. There's strong evidence pointing to a São Tomé connection as well.
With the support of lawmakers like Jefferson, Africa has emerged as a major American oil supplier in the last decade. Jefferson and his staff strongly supported the African Oil Policy Initiative Group (AOPIG), an ad hoc panel of U.S. government and energy industry officials that described African energy as a “vital interest” of the United States. In an article in 2003, Alexander's Gas & Oil wrote that Jefferson was calling for a “full-fledged makeover of the U.S. strategic relationship with Africa” to take advantage of its “petroleum potential.”
In November of 2000, Jefferson led the first-ever Congressional delegation to Equatorial Guinea, taking along representatives from Baton Rouge–based Shaw Global Energy Services and from CMS Energy, which had extensive interests in the country that were later sold to Marathon. When it got involved in Equatorial Guinea in the mid-1990s, CMS allowed a company controlled by the country's president, Teodoro Obiang, to obtain a stake in two joint ventures. Even by the standards of Equatorial Guinea, a textbook kleptocracy, this was a friendship with remarkable benefits. Obiang put no money down for his stake—which was worth about $29 million as of 2004—and received $1 million in dividend payments between 2003 and 2004 alone, according to a Senate investigation.
The government of Equatorial Guinea was so pleased with Jefferson's visit that it presented him with a key to the capital city of Malabo. Jefferson also stopped in São Tomé and Nigeria on the trip; Shaw Global picked up the congressman's travel tab, which came to $6,872. After he returned home, Jefferson began lobbying for the U.S. to reopen its embassy in Equatorial Guinea—it had been closed in the mid-1990s, in part because the government threatened the American ambassador—a step the Bush Administration reauthorized in late 2001.
Another Louisiana firm with ties to Jefferson is Schaffer Global Group. Back in 2002, according to interviews and documents I have received, Schaffer Global was unsuccessfully chasing potential business deals in Equatorial Guinea in conjunction with several other firms, including a lobbying and business-development company called AfricaGlobal that worked for the Obiang regime (and which is now owned by Schaffer). In addition to trying to drum up American investment in Equatorial Guinea, AfricaGlobal also sought to improve ties between Obiang and the United States. At least three people from Schaffer or AfricaGlobal made modest campaign contributions to Jefferson; one of them, Warren Weinstein, served on the AOPIG with Melvin Spence, an aide to the congressman.
Gustavo Envela, an Equatoguinean national who lives in the United States and who briefly served as a consultant to AfricaGlobal, said that Jefferson was a key congressional ally of AfricaGlobal and was enlisted to help in Equatorial Guinea “because of his close relationship” with the Obiang regime. (I'm not suggesting that any of these firms bribed Jefferson, only that the congressman was close to the hideously corrupt government of Equatorial Guinea.)
A second source familiar with Equatorial Guinea told me that when Obiang came to Washington for visits, Jefferson would meet with the dictator at his hotel (which on at least one occasion was the Hay-Adams). This person also said that one of Jefferson's Hill aides was always assigned to accompany government officials from Equatorial Guinea when official delegations were in town.
Jefferson also has interesting ties to São Tomé and to some Americans doing business there, specifically people linked to ERHC. That's the small Texas-based firm that had zero revenue, one full-time employee, and a controversial Nigerian owner (whom I'll discuss below), but which obtained lucrative oil rights in tiny São Tomé. On May 22, I reported that investigators recently hit ERHC with a search warrant for “documents related to correspondence with foreign governmental officials or entities in São Tomé and Nigeria.” According to my source and to the report in African Energy Intelligence, the warrant is linked at least in part to the Jefferson investigation.
Here's what ties Jefferson to people from ERHC and suggests that the warrant slapped on the firm might be part of the Jefferson story:
In February 2004, Jefferson again traveled to Nigeria, São Tomé, Equatorial Guinea, and Cameroon. That trip was paid for by iGate, the firm at the heart of the current investigation, and several other companies, including one that is now called Global Environmental Energy Corp (GEEC). According to records filed with the Louisiana Secretary of State, GEEC's principal office is in the Bahamas; its president is Noreen Wilson, and its registered agent is Phil C. Nugent. The latter is the son of Phil H. Nugent, a Houston-based oil and gas consultant who, when I met him three years ago, was a major shareholder in ERHC and major promoter of the firm. Noreen Wilson is a Beltway lobbyist and ERHC shareholder who helped negotiate the company's deal in São Tomé. (Phil Nugent Sr is also linked to GEEC through Green Energy Management, a firm that partnered with GEEC and of which he was chairman.)
So GEEC, which helped pay for one of Jefferson's trips to Africa (a trip that included a pit stop in São Tomé), has ties to ERHC, the company with the big oil stake in São Tomé. As for ERHC's owner: that would be Emeka Offor, a controversial billionaire with close ties to Nigerian political figures, including vice president Abubakar Atiku. The Nigerian vice president owns a home in Maryland that was searched as part of the Jefferson investigation, and court records show that the congressman is alleged to have planned to bribe him in order to advance iGate's interests in Nigeria. A story published last December by a Nigerian journalist reported that Offor was “being investigated by a branch of the American government,” and suggested it might be tied to money “said to have been paid to some U.S. congressional contacts.” (Offor disputed the claim.)
There is one final iGate connection, which might well be nothing more than a coincidence. Court papers show that Jefferson told a cooperating witness in the probe about a firm called Global Energy & Environmental Services (GEES), which was controlled by his children and run by his son-in-law. The congressman allegedly arranged for GEES to benefit financially from his efforts on behalf of iGate.
Africa's tragedy is that its great resources have been used to enrich a tiny number of colonizers, post-colonial strongmen, and their foreign friends. That may well turn out to be the real story of the Jefferson affair.
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This is William Jefferson: Tollbooth Operator on the Road to Africa by Ken Silverstein, published Wednesday, June 7, 2006. It is part of Washington Babylon, which is part of Harpers.org. Written By Silverstein, Ken
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