(FORTUNE Magazine) - His country may be war-torn, bankrupt, and mired in poverty, but that didn't stop Republic of the Congo President Denis Sassou-Nguesso, newly elected African Union chairman, from racking up an $81,706 bill for a week at New York City's Palace hotel while in town for the UN General Assembly last September. Even as his country demands debt forgiveness and stiffs bondholders, Sassou-Nguesso enjoyed amenities like an in-room Jacuzzi, a 50-inch flat-screen TV, and $2,500 worth of room service in one day. But, then, a single night in what's known as the Triplex costs $8,500--more than what the average citizen of the Congo earns in a decade.

This isn't just a story of another Third World potentate who lives like a king while his people starve, however. Since last year $5.6 billion New York City hedge fund Elliott Management has been battling Sassou-Nguesso and French bank BNP Paribas in U.S. court, demanding payment on the country's sovereign debt and accusing BNP of helping Sassou-Nguesso's regime, which exports at least 200,000 barrels of oil a day, launder billions a year while claiming to be broke. (The Congolese embassy in Washington declined to comment.)

The hedge fund acquired $100 million in highly discounted Congolese debt a decade ago. Now it has unleashed lawyers globally to find the assets and collect--it uncovered the hotel bill in discovery proceedings. "We spent nearly a year on a magical mystery tour," says senior portfolio manager Jay Newman, "chasing information about a cargo of Congo's crude oil, and found out where the money was going from information found in places like the Cayman Islands, Bermuda, and the British Virgin Islands."

Elliott also hopes to shine a light on the activities of BNP, one of France's biggest banks. That's the last thing BNP wants now. Already cited for helping Saddam Hussein divert money from the UN Oil for Food program, BNP, which denies wrongdoing, is challenging Elliott's suit on jurisdictional grounds. If Elliott prevails, expect more revelations about high-living rulers--and the banks that help them.