Over the past few months, there has been a louder and louder outcry over the reality that some international political officials the U.S. government has classified as corrupt can nonetheless use U.S. banks to transfer funds, complete massive purchases in the U.S., and generally travel freely here. Among the most high-profile of these figures: Teodoro Nguema Obiang, son of the president of Equatorial Guinea, the country’s current agricultural minister, and a person the U.S. government has publicly accused of earning “most if not all” of his wealth from corruption related to oil reserves off the coast of his country.
Obiang is among the stars of a 352-page report released Thursday by the U.S. Senate’s Permanent Subcommittee on Investigations. The report details case after case of corrupt foreign officials using U.S. intermediaries to exploit loopholes in U.S. anti-money laundering laws. The Patriot Act, passed in 2001, required certain intermediaries deemed “vulnerable” to money laundering (a group that includes lawyers, real estate agents and escrow agents) to perform diligence on the source of money their clients use for major transactions, according to the report and stories out Thursday in The New York Times and USA Today. But the diligence requirement hasn’t taken effect for those groups because the Treasury Department granted them an exception in 2002. That has allowed so-called “politically exposed persons” to use these groups as intermediaries for real estate deals and other transactions.
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