Follow the money (and the houses)Posted: April 7, 2012
I didn’t know much about real estate until 2000 when my colleagues and I at the Philippine Center for Investigative Journalism were checking out rumors that then President Joseph Estrada — a former movie actor famous for his boozing and womanizing — was building fabulous houses for a string of mistresses. It turned out that the houses were just the most visible manifestations of the deep-seated corruption that was taking place during Estrada’s reign.
Since then, I’ve become house-conscious and have kept an informal tally of officials around the world whose crimes and misdeameanors have come to light because of their mania for mansions (cars are a close second, especially Ferraris and Bentleys, followed by private jets and yachts). Whether in the United States or Nigeria, South Africa or Bosnia, public officials have a penchant for using the people’s money to acquire real property. It wasn’t just Imelda Marcos who suffered from a publicly-financed edifice complex. (See my photo collection, Mansion Mania, on Pinterest.)
We found that in just the first two-and-a-half years of his presidency, Estrada had used shell companies to purchase real estate worth about $40 million, more than 25 times his declared net worth. Impeachment charges were filed against Estrada after our exposé, and he was ousted in a popular uprising before the trial was concluded. In terms of real estate, however, he was by no means unique; nor did he hold a world record. Here’s my list:
Teodoro Nguema Obiang, the forestry minister of Equatorial Guinea and the son of the country’s president, was the subject of a 2009 investigation by the corruption watchdog Global Witness and journalist Ken Silverstein. They found that Obiang, whose ministerial salary was at best $5,000 a month, had purchased a $35-million hilltop compound in Malibu that had a four-hole golf course, tennis courts and a panoramic view of the Pacific Ocean.
Subsequent investigations found two more luxury homes in Cape Town and a 5,000-square foot apartment on Paris’s posh Avenue Foch. Last year, the U.S. government seized $70 million worth of Obiang’s assets, including the Malibu home, a Gulfstream jet, a Ferrari, and $3.2m dollars worth of Michael Jackson memorabilia. The Obiangs were charged with stealing more than $100 million from their country.
James Ibori was the former governor of the oil-rich Delta State in Nigeria. Dogged reporting by Sahara Reporters, an independent news site run out of downtown New York, exposed the governor’s portfolio of fancy houses in London that included a six-bedroom, £2.2-million house with an indoor pool (Sahara Reporters has a photo gallery of the Ibori real estate). He also owned a fleet of armored Range Rovers and Bentleys, and came to the attention of the London Metropolitan Police when he placed an order for a $30-million private jet. He was subsequently charged with money laundering and conspiracy to defraud. The police say he stole $100 million in eight years. He pleaded guilty in a London court last February.
Unlike others who kept their houses under wraps, Zimbabwean President Robert Mugabe never denied the palace was his, nor that he didn’t pay for its estimated £5-million construction. The residence, 16 miles north of Harare, has 25 bedrooms, glazed roof tiles imported from China and ceilings carved by Arab craftsmen. It came to light in 2003, when British newspapers and Zimbabwean news sites published pictures. Mugabe claimed he was given the house by the ruling party but it burnt down and was then being rebuilt with help from China (which provided the blue glazed tiles) and the Malaysian government (which donated the timber).
Mugabe’s flamboyant wife Grace had previously commissioned a sprawling mansion in a Harare suburb, claiming she used her personal savings. In 2009, the Sunday Times of London reported that the Mugabes had purchased a $5.7-million house in Hong Kong for their daughter Bona who was then studying there. They supposedly also have a vacation home in Malaysia.
Last fall, the muckraking South African newspaper, the Mail and Guardian, reported frantic construction in President Jacob Zuma‘s Nkandla estate. The construction included underground bunkers with air-conditioned rooms, a clinic, gymnasium, 20 houses for security guards , underground parking, a helipad, playgrounds and a garden for ancestral graves. Zuma’s spokesperson said the president was paying for most of these, although the government was picking up the tab for the security facilities, including the underground bunker and guards’ quarters, as well as the tarring of a road that led to the property.
Earlier, ANC Youth League leader Julius Malema, a self-proclaimed champion of the poor, figured in another real-estate scandal. The Sunday Independent reported that he was building a $2-million mansion in a swanky Johannesburg suburb. The modern, multi-story mansion will have underground bunkers, a swimming pool and an underground garage.
Nedzad Brankovic, the former prime minister of the Federation of Bosnia-Herzegovina, was forced to resign by a real-estate scandal that was modest in comparison with those of African politicians (i.e. no underground bunkers were involved). In 2007, the Center for Investigative Reporting in Bosnia reported that the prime minister managed to acquire a €135,000-apartment almost free of charge from the government. The apartment was purchased in 2000 by an engineering company that was partly government-owned. The then prime minister assigned the apartment to Brankovic, who subsequently purchased the apartment with vouchers worth about €500. Brankovic was indicted after the story was published and he later resigned.
Here in the U.S., Alaska Senator Ted Stevens got into trouble because of “home improvements.” In 2007, the Anchorage Daily News reported that the long-time legislator was being investigated for a remodeling project in his home in Girdwood, Alaska. It turned out that the renovations, including a new first floor, a new garage, wraparound terrace and new plumbing, as well as furniture, gas grill and storage cabinet with new tools, were being paid for by the oil company Veco. Stevens had made funding requests for Veco projects as well as for federal grants to Veco and its subsidiaries. He was subsequently indicted and his home raided by federal investigators.
Like Stevens, Connecticut Gov. John Rowland was sentenced to a one-year prison term in 2005 after he was found guilty of racketeering charges for accepting gifts from state contractors. The gifts included repairs on his lakeside cottage — a new tub, kitchen renovation and a heating system — paid for by individuals and companies doing business with the state. He had a list of other undisclosed gifts (suits, Cuban cigars, French champagne, a vintage Ford Mustang ) as well as $100,000 in all-expense paid vacations.