How the Fed Helped Qaddafi Keep His $200B in Loot
I suggested yesterday that the West will be playing dumb about the extent to which Qaddafi looted the Libyan people becomes known.
But what about how Qaddafi looted us–or, at least, the Fed?
As this article laid out, one of the means by which Qaddafi was looting was the Central Bank of Libya.
Moammar Kadafi secretly salted away more than $200 billion in bank accounts, real estate and corporate investments around the world before he was killed, about $30,000 for every Libyan citizen and double the amount that Western governments previously had suspected, according to senior Libyan officials.
The new estimates of the deposed dictator’s hidden cash, gold reserves and investments are “staggering,” one person who has studied detailed records of the asset search said Friday. “No one truly appreciated the scope of it.”
[snip]
Most of the money was under the name of government institutions such as the Central Bank of Libya, the Libyan Investment Authority, the Libyan Foreign Bank, the Libyan National Oil Corp. and the Libya African Investment Portfolio. But investigators said Kadafi and his family members could access any of the money if they chose to. [my emphasis]
Central Bank of Libya was a significant owner (and is now a 59% owner) in the Arab Banking Company, which got $35B of loans during the crisis.
Arab Banking Corp., the lender part- owned by the Central Bank of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed.
The bank, then 29 percent-owned by the Libyan state, had aggregate borrowings in that period of $35 billion — while the largest single loan amount outstanding was $1.2 billion in July 2009, according to Fed data released yesterday. In October 2008, when lending to financial institutions by the central bank’s so- called discount window peaked at $111 billion, Arab Banking took repeated loans totaling more than $2 billion.
Yet all the time the ABC was borrowing $2B chunks of money, Qaddafi was sitting on $200B, which he could have used to provide the bank liquidity.
Mind you, this kind of looting was no doubt going on–and is no doubt going on today, as big banks refuse haircuts in Europe and housing fraud settlements–more generally. Qaddafi is just the very ugly face of how the Fed lending allowed people and corporations who had been looting for some time were able to keep that loot.
Heh. And in June of 2009, right in the middle of getting all those billions in loans, Qaddafi complained about not being “rewarded” for giving up WMD’s.
I am thinking that an asset search could have just as easily been accomplished when Qaddafi was alive. There is nothing special about him being dead with respect to the scope of his lootings.
Tweeted. This story is co-branded. It’s the “kiss” between Bush and JoeLie, except now it’s Qaddafi and Bernanke/Larry Summers/Geithner/Bush/Obama……
Paging darkblack.
Paging Ron Paul’s campaign. This is manna from heaven for him.
In a METAPHORICAL way, it hits both the Military Industrial Complex and Wall Street right in the mouth.
@JThomason: @JThomason: Oh, that’s what I was suggesting with yesterday’s, “shocked, Qaddafi’s loot is in our casino’s” post.
Not least because they treated him as a terrorist, which means they’d get full access to SWIFT on him, even without lying.
But it’s not in their best interest to do that, because they were busy taking him to the cleaners for fees. Do check out this video on how Mobutu Sese Seku did it before Qaddafi.
Granted, Qaddafi had to be a bit shrewder about his looting, given that he was only in our good graces for a brief period. THen again, he was looting into a period when banks didn’t much care who they were doing business with and anyway had the means to hide it.
Most of the money was under the name of government institutions such as the Central Bank of Libya, the Libyan Investment Authority, the Libyan Foreign Bank, the Libyan National Oil Corp. and the Libya African Investment Portfolio. B
It wasn’t Gaddhafi’s money and it wasn’t stashed away, kept secret or whatever. This was and is the official money of Libya and Gaddhafi, while may having access to it, did not use it for his gain but for the official purpose.
The man is dead, can we stop to malign him with nonsense?
@b: Uh, we’re not maligning him. We’re maligning the hypocrites in the econ world who were happy to do business with him but now are pretending to be shocked that he laundered money OUT of these entities and–yes–stashed it for his own use.
The fact taht we were aware of this shows up in a number of WikiLeaks cables. Hell, it was widely known, generally. What the whole “shock!” about Qaddafi’s looting is designed to do is pretend that our banking system doesn’t rely on just that kind of looting for big profits.
Furthermore, as I said, Qaddafi is no different than any number of banks, except insofar as he used his power to murder people directly whereas the other looters use it for murder indirectly. If you want to be appalled by Qaddafi, you should, also, be appalled by Goldman Sachs.
@b: I don’t see this thread as maligning Qaddafi. While its true due process is generally absent in his execution the thrust here is how money is no ememy to money and the upshot of the political economy in the configuration of the “Qaddafi as enemy” as manifest in global institutional liquidity.
And of course there is always the risk that such analysis sounds like the rantings of Ezra Pourd or Chavez or Ahmadinejad spouting marxist rhetoric. (One might also suggests that a tempred understanding, of the real costs of these tendencies having nothing to do with rhetorical excess served as the factual basis of the work of T. Roosevelt in trust busting and the successes of anti-trust legislation more dynamic in other times.) But the social consequences of these tendencies is the general disenfranchisement of the people in the face of Constitutional and democratic rhetoric. This is what the rapacious lending practices of the mortgage crisis, the foreclosure crisis and the Occupty Wall Street movements, cited to sketch our moment, illustrate. These are signals of risk to the people. And it is this risk and incongruity that need to be addressed. And the impulse to address these is at least as old as the insistence upon the recognition of the Magna Carta and the enlightened self-interest of “the People”, post democratic or not, requires a cognisance of these disempowering manipulations.
What’s happening here with the work of EW and others is pretty simple really and I appreciate the zeal expended in keeping an ongoing description of the phenomenon alive even though I can’t always hang with the detail.
@b:
Your first sentence said it “wasn’t Gaddhafi’s money.”
Your second sentence said it was the “official money of Libya and Gaddhafi.”
Most folks wait at least a sentence before making such a complete contradiction.
Your second sentence also claims that he “may” have had access to it. Which is it?
Then in the second sentence you assert that he “did not use it for his gain,……”
That wouldn’t be possible if he did not have access to it.
Is it too much to ask for decent troll? Don’t the Koch brothers/Dick Armey have any quality control?
How do you malign a murdering dictator?
It is not maligning him to say that he, like every dictator in Africa and the Middle East (and a growing number of politicians in the West), looted his country of its wealth, depriving his fellow citizens of health, education, jobs and security, while enriching the UK and US banking conglomerates who aided and abetted his looting.
It is not maligning him to accuse those aidors and abettors – banks, governments, lawyers and accountants, and fellow politicians – of aiding and abetting, or of having forgetful memories of where their deposits and wealth came from. That is, as you say, not from Qaddafi, but from his people.
The odds are that the people of Libya will not benefit greatly from this US-enabled regime change. Not if the world turns its attention away to other crimes and distractions. To rework an old phrase from television crime dramas, only the names will have been changed to protect the guilty. And some of them will live in Georgetown, Westchester and leafy Surrey.
well hey, the DOJ’s Operation Kleptocracy is trying to bag millions from the son of the president of Equatorial Guinea. ill gotten gains or some such.
(am I the last one to know the DOJ has a formal “Kleptocracy Initiative”? whoever’s got naming rights in that division needs to be offered early retirement)
PS
@rosalind: Small potatoes; it suggests he annoyed the wrong intel agency or transnational company, not a DoJ effort to make the offshore industry less robust.
Thanks for the post EW. Even more important are your comments above. Thanks on both counts.
Well stated. (Nice book title too!)