Thursday, May 26, 2011

Libyan Gold Rush Followed End to Sanctions, May 26 2011

Robert O’Harrow Jr. and James V. Grimaldi,
Washington Post
Some of the world’s most sophisticated banks and investment firms rushed to do business with Moammar Gaddafi’s government in Libya after the United States rescinded the country’s designation as a state sponsor of terrorism five years ago, according to an internal financial document obtained by The Washington Post.

HSBC, Goldman Sachs and other top banks took on hundreds of millions in cash deposits. Hedge funds and private investment firms, including the Washington-based Carlyle Group, sold Libya’s investment authority complex financial products. The Libyan sovereign wealth fund bought more than $1 billion in U.S. Treasury bills, effectively giving Libya a chance to underwrite U.S. debt.

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.

Full article here

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