Qaddafi's Libyan Loot Likely Lost

August 29th, 2011

$33 Billion Illicitly Left Libya between 2001-2009, Says Global Financial Integrity


Since the forces of the Libyan Transitional Council entered Tripoli last week, Muammar Qaddafi has not been seen, presumably hiding or on the run from the revolution aimed at ending his 42-year rule.  But as pointed out on ABC News last Wednesday, much of the money he looted from the country over the past 4 decades is still at large as well.

Citing Global Financial Integrity (GFI) research, ABC notes that at least $33 billion dollars left the country through illicit means in the past decade.  Explaining the figure, GFI’s Monique Danziger noted:

Libya has the “spottiest” data reporting of the 162 countries that report financial figures to the IMF and World Bank.

“These are all puzzle pieces,” she said. “No one can say they have a wholistic estimate. You’re working with huge data gaps no matter what.”

Earlier this summer, GFI’s Tom Cardamone wrote a piece for TrustLaw about the challenges of actually recouping money taken by Qaddafi and his fellow ousted dictators, Mubarak in Egypt and Ben Ali in Tunisia.  In past recovery efforts, only about 1% of the money was ever recovered, based on a UNODC report.  The U.S. and other nations were quick to apply sanctions in the case of Libya, freezing many assets which may help with the recovery process.  In fact, some of those assets have already been returned to the Libyan people, with the Netherlands turning over some of the frozen money to fund medical relief efforts.

However, the process of finding all the illicit money is far from simple.  Bank secrecy laws, the routing of money through shell companies and secrecy jurisdictions, and all sorts of other shady financial maneuvering will make the recovery process challenging.  And in this case, as Robert Powell at the Economist Intelligence Unit notes, even if accounts are registered in Qaddafi’s name, the dozens of ways his name may be transliterated into the Latin alphabet makes tracking the funds even more daunting.

In order to prevent abuses of power like this in the future, it is vital that the U.S. and other nations take stronger measures to prevent illicit financial activity.  Strong anti-money laundering programs, including greater scrutiny into the activities of Politically Exposed Persons would make tracking and preventing dictatorial graft easier.  Making it harder to hide money in shell corporations with undisclosed owners will remove a key tool used to launder dirty money anonymously as well.

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Written by Dan Hennessey

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