The battle for Libya seems to be slowly turning into a protracted civil war that pits the government forces of Colonel Muammar Gaddafi against the will of anti-government protesters. One thing that’s becoming pretty clear is that Gaddafi does not plan to collapse in the manner of Hosni Mubarak as he’s clearly prepared to use military force in a manner that few of the other troubled autocratic regimes have shown a stomach for.
As the world mulls over what will happen to Gaddafi whether he wins or loses, another battle is brewing over the country’s wealth, specifically that owned by the Libyan Investment Authority (LIA). As I stated last week, this $70 billion sovereign wealth fund has been Gaddafi’s primary source of wealth. The fund was founded in 2006 by his son, Seif al-Islam el-Qaddafi, as a means of opening up Libya to the west while simultaneously diversifying the country’s dependence on oil revenues. Over the years, powerful western figures have been drawn into Mr. Qaddafi’s orbit, including the Rothschild family, Prince Andrew of Britain, and the American private equity investors Stephen Schwarzman of Blackstone and David Rubenstein of the Carlyle Group.
Amongst the fund’s listed foreign assets include a 15% oil exploration and production partnership entered into with British Petroleum (BP), an ownership stake in the Dutch-Belgian bank of Fortis (acquired in 2008 as the global credit crunch was getting underway), and a 7.5% share ownership of the Juventus Italian football club.
Over the past couple of weeks, individual countries have begun taking steps to freeze the assets held by LIA or of those held by the directors and managers of the fund. Austria widened a national asset freeze list to include a top official at the Libyan Investment Authority (LIA) because of possible links to Muammar Gaddafi's inner circle. Meanwhile, the UK government froze approximately $3 billion of assets belonging to the LIA, after having initially frozen $1.6 billion in assets linked to Gaddafi and his children. The assets frozen in London include the fund’s $360m stake in Pearson (owner of the Financial Times) and a $480m property portfolio in London.
Not to be left behind, US Treasury secretary Tim Geithner announced last Thursday that they had seized nearly $32 billion in Libyan assets, including those held by the LIA... Despite these efforts, the question remains, what does the seizure of these assets mean for the people of Libya in the long run? If Gaddafi’s government were to prevail and remain in power, would these frozen assets eventually be returned to him? Or what if the Gaddafi’s government collapses, how would all these individual governments ensure that the funds are returned to their rightful owners, the citizens of Libya?
As the world mulls over what will happen to Gaddafi whether he wins or loses, another battle is brewing over the country’s wealth, specifically that owned by the Libyan Investment Authority (LIA). As I stated last week, this $70 billion sovereign wealth fund has been Gaddafi’s primary source of wealth. The fund was founded in 2006 by his son, Seif al-Islam el-Qaddafi, as a means of opening up Libya to the west while simultaneously diversifying the country’s dependence on oil revenues. Over the years, powerful western figures have been drawn into Mr. Qaddafi’s orbit, including the Rothschild family, Prince Andrew of Britain, and the American private equity investors Stephen Schwarzman of Blackstone and David Rubenstein of the Carlyle Group.
Amongst the fund’s listed foreign assets include a 15% oil exploration and production partnership entered into with British Petroleum (BP), an ownership stake in the Dutch-Belgian bank of Fortis (acquired in 2008 as the global credit crunch was getting underway), and a 7.5% share ownership of the Juventus Italian football club.
Over the past couple of weeks, individual countries have begun taking steps to freeze the assets held by LIA or of those held by the directors and managers of the fund. Austria widened a national asset freeze list to include a top official at the Libyan Investment Authority (LIA) because of possible links to Muammar Gaddafi's inner circle. Meanwhile, the UK government froze approximately $3 billion of assets belonging to the LIA, after having initially frozen $1.6 billion in assets linked to Gaddafi and his children. The assets frozen in London include the fund’s $360m stake in Pearson (owner of the Financial Times) and a $480m property portfolio in London.
Not to be left behind, US Treasury secretary Tim Geithner announced last Thursday that they had seized nearly $32 billion in Libyan assets, including those held by the LIA... Despite these efforts, the question remains, what does the seizure of these assets mean for the people of Libya in the long run? If Gaddafi’s government were to prevail and remain in power, would these frozen assets eventually be returned to him? Or what if the Gaddafi’s government collapses, how would all these individual governments ensure that the funds are returned to their rightful owners, the citizens of Libya?
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