By Robert Windrem
NBC News investigative producer for special projects
Moammar Gadhafi’s regime controls $32 billion in liquid assets around the world, including hundreds of millions of dollars invested in U.S. banks, according to a confidential cable written by the U.S. ambassador to Libya last year. The leaked diplomatic message was distributed through WikiLeaks.
The same cable reported that Libya had been approached by two men accused of running huge Ponzi schemes, Bernard Madoff and Allen Stanford, but had resisted offers from them to invest Libyan funds with them. Madoff is serving time in a U.S. prison; Stanford has not been convicted of a crime and is awaiting trial.
The cable is entitled "Technology of Tourism: Head of Libyan Investment Authority Discusses Opportunities for US Business in Libya," and was written Jan. 28, 2010, by Ambassador Gene A. Cretz, after a meeting with Mohamed Layas, the head of the LIA, Libya’s sovereign wealth fund. Sovereign wealth funds are the vehicles used by Middle East and other governments to invest oil wealth. The LIA, according to U.S. intelligence, is controlled by Gadhafi's regime.
"Layas asserted that the LIA has USD 32 billion in liquidity, and noted that several American banks are each managing USD 300-500 million of the LIA's funds," according to the cable.
Cretz also quotes Layas as saying, "We have USD 32 billion in liquidity, mostly in bank deposits that will give us good long-term returns." Layas explained that beyond the hundreds of millions of dollars in U.S. banks, not further identified, Layas said the LIA has extensive investments in the United Kingdom.
Cretz wrote that Layas "said that the LIA has an office in London and preferred doing business there rather than in the United States, due to the ‘ease of doing business’ in the UK and relatively 'uncomplicated tax system.' He noted that the LIA's primary investments are in London, in banking and residential and commercial real estate."
The LIA’s best-publicized investment was in a Canadian oil company, Verenex. Libya paid $316 million for the company in 2009.
However, the Libyan claimed he had avoided being involved in two Ponzi schemes, those run by Madoff and Stanford. Layas denied press reports that LIA had invested $100 million with Stanford, but admitted being approached by both Stanford and Madoff.
"Stanford had approached the LIA in the middle of his crisis, offering a 7-8% share in his investment scheme, but Layas had refused," Cretz wrote. "Layas also mentioned having been previously approached by Bernard Madoff about an investment opportunity, 'but we did not accept’."
Other diplomatic cables on Libya are described in this New York Times article, "WikiLeaks cables detail Qaddafi family's exploits."