U.S. Sen. Robert Menendez, D-N.J, led an inquiry into the Scottish decision to release Abdelbaset al-Megrahi, the only person convicted in the Dec. 21, 1988, bombing of Pan Am Flight 103 over Lockerbie, Scotland, in 2009.
Megrahi was released on compassionate grounds following a terminal cancer diagnosis. Menendez had said he felt there was a link to the decision and an oil deal between British energy company BP and the Libyan government.
U.S. interest in the case gained steam after the BP oil spill in the Gulf of Mexico in April.
Menendez in his findings said the decision to release Megrahi "directly contradicted" bilateral agreements with London that stated convicted terrorists must serve out their prison terms.
The senator went on to say that London was "protective" of BP, adding Libyan oil and natural resources were "extremely attractive" to British energy companies. Keeping Megrahi in jail threatened the BP oil agreement, Menendez said, suggesting "the threat of commercial warfare was a motivating factor" in the release.
The Scottish government dismissed many of the claims by Menendez, saying the 22-year history of the Megrahi case was in the public record.
Edinburgh said the U.S. report wasn't an official report from key legislative bodies but "an incorrect and inaccurate rehash" of the case, adding "we entirely reject their false interpretation."
"The senator's original claim was that BP lobbying played a role in the release of Megrahi, and even a Senate committee hearing that was held in September dismissed that claim, leaving this whole exercise devoid of credibility," the government said.
Originally given a promising prognosis following his return to Tripoli, Megrahi is reportedly in a coma in a Libyan hospital.