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In sunny Malibu a real estate agent named Neal Baddin helps the playboy son of one of the world's most corrupt leaders buy a $30 million mansion. Teodoro Nguema Obiang lives off money taken from the coffers of Equatorial Guinea, a tiny but oil-rich country where most people endure repression and grinding poverty. But Baddin doesn't ask who Obiang is, or where he might have gotten $30 million. He just collects his generous commission. And he's not alone. In Oklahoma a company called IATS facilitates Obiang's purchase of a $38.5 million Gulfstream jet - after a rival company had already turned down his obviously tainted money.

Does all of this sound like it should be legal in America? Well, it is. In a meticulously documented report, U.S. congressional investigators recently showed how legal loopholes and lax regulations let foreign kleptocrats treat America like a carefree shopping paradise while their people starve back home. Neither Baddin nor IATS had any legal obligation to know who Obiang was or where his money came from. That's a problem.

This is not just about obscene displays of luxury. The same corruption that pays for Obiang's extravagant lifestyle fuels abuse and poverty in countries around the world. In places like Equatorial Guinea and Nigeria - both countries featured in the Senate report and where Human Rights Watch has thoroughly documented gross mismanagement and corruption - people are trapped in poverty while basic health and education systems are gutted and political violence and repression are fueled by official greed.

It's not supposed to be this way. The Patriot Act introduced controls designed to prevent U.S. institutions from facilitating money laundering and other abuses of the financial system. And the Bush administration's ambitious anti-kleptocracy initiative was supposed to make the U.S. a more hostile place for corrupt politicians and their stolen money.

The Senate report shows just how inadequate these efforts have been. Atiku Abubakar, Nigeria's vice president at the time, transferred $40 million in "suspect funds" into the U.S. with the help of his fourth wife. Meanwhile, American University in Washington, D.C., accepted $14 million for consulting services from offshore corporations linked to Abubakar without asking who the companies were or knowing where the vice president got the money. Pierre Falcone, a notorious arms dealer who is currently in prison in France, had free access to more than 30 U.S. bank accounts for nearly two decades. Omar Bongo, the late president of Gabon, brought $1 million in shrink-wrapped bills into the U.S. without bothering to declare it to customs and then gave the money to his daughter, an unemployed student. For a while she kept the money in a safe deposit box in a U.S. bank.

But it's the easy relationships between corrupt officials and their U.S. business partners that really should attract scrutiny. Banks, lawyers, real estate agents and others have made hefty profits off their partnerships with some of the world's biggest looters and most repressive politicians. Here, some of the stories that emerge from the Senate report border on the lurid: Take the case of Michael Jay Berger, a Beverly Hills lawyer who helped Obiang outmaneuver inadequate anti-money-laundering laws. Berger seemed to enjoy the perks of being a kleptocrat's henchman.

In private e-mails obtained by Senate investigators, he gushes about being invited to an exclusive party where Obiang impressed guests by producing a live white tiger ("SO COOL!" Berger wrote). In another e-mail Berger thanks Obiang for taking him to a party at the Playboy Mansion where he got the "VIP treatment" and "met many beautiful women." Not a bad life. But back in Equatorial Guinea one in every five children dies before the age of 5, mostly from easily preventable causes.

This month Berger was standing in front of a Senate subcommittee, pleading the fifth. Like the Senate report itself, that moment was a good start in the right direction. But now it is up to the Obama administration to decide if it wants to deal with the problems unearthed by the report. The government should take up all of the report's recommendations. Congress should pass new legislation to close the loopholes, starting with the Energy Security Through Transparency Act. That legislation would require companies to disclose payments to foreign governments and unravel some of the secrecy that allows corruption to take root. Government agencies should also make better and more ambitious use of the regulatory authority they already have. Let Obiang take his money and his tiger somewhere else.

Even Neal Baddin, Obiang's former realtor, seems to agree. He told the Senate that when it comes to fighting money-laundering, he and other realtors need "guidance on what to look for, what to do and how to do it." The U.S. government should provide that guidance.

Chris Albin-Lackey is senior researcher for business and human rights for Human Rights Watch.

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