By last year, Libya’s fund recorded about $56 billion in assets around the world, the internal document shows.
The document, created for the Tripoli-based Libyan Investment Authority by management consulting firm KPMG, provides the most detailed accounting yet of how Libya invested its oil revenue in the years between its removal from the international blacklist in 2006 and the resumption of sanctions after a deadly crackdown on protesters earlier this year.
The report underscores that just months after Gaddafi’s government was cleared for international business deals, leading financial institutions were courting Gaddafi officials for access to a huge new reservoir of capital — more than $40 billion at the time.
The gold rush in Libya occurred with encouragement from U.S. officials, who wanted to reward Gaddafi for pledging to honor international law, disavow terrorism and compensate relatives of victims of the Pan Am Flight 103 bombing.
“Sanctions are powerful because of our ability to leverage the U.S. financial system. Immediate access to the U.S. and Western investment upon the removal of sanctions is the ultimate carrot,” said one senior U.S. official, who declined to be named because he was not authorized to speak about the matter. “That carrot is what compels sanctioned narcotics traffickers, proliferators and supporters of terrorism to change their behavior and stop engaging in the illicit conduct that got them cut off from the United States.”
But the sudden embrace of Gaddafi became a source of embarrassment once his government — long known for its ruthlessness in suppressing dissent — used massive force to attempt to squelch a civilian uprising in February. Since then, government forces and rebels have been locked in a stalemate, with NATO warplanes regularly striking loyalist targets.
“It’s amazing how many big banks were prepared to do business with the Gaddafi regime given the obvious concerns over corruption and brutality in Libya,” said Corinna Gilfillan, head of the U.S. office of Global Witness, a nonprofit watchdog group that first obtained the document.
The Post independently confirmed that the document was produced by the London office of KPMG, which worked as a consultant to help the investment authority better track its assets in 2009 and 2010. KPMG spokesman Gavin Houlgate declined to comment on the report.
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