TRIPOLI, Libya, July 1 (UPI) -- Investment funds managed Libyan money poorly, charging tens of millions of dollars in fees and yielding low returns, officials and documents indicate.
The banks appear to have taken advantage of a Libyan investment fund that was poorly managed and "a mess," a western official told The New York Times on condition of anonymity.
The document, obtained by the advocacy group Global Witness, was a September 2010 summary of Libyan Investment Authority assets that indicated a close tie between money managers and a Libyan associate of leader Moammar Gadhafi. The Libyan Investment Authority complained a $1.7 billion investment made in six different funds yielded returns well below the industry benchmark.
"To date, we have paid in excess of $18 million in fees, for losing us $30 million," the report said, referring to a fund reportedly managed by the son-in-law of the head of Libya's state oil company.
Representatives for the firms included in the report either declined to comment on the record to the Times or couldn't be reached for comment. However, an official at one firm criticized in the report, speaking anonymously, blamed poor investments on middlemen and denied the firm got high fees.
"It's not as straightforward a picture as it perhaps should be," the official told the Times.
U.S. companies could legally do business with Libya from 2004 to 2011 after Gadhafi renounced terrorism and stopped attempts to develop nuclear weapons, followed by the Bush administration's decision to lift sanctions in 2004, the Times said. The Obama administration reimposed sanctions in February after the Gadhafi regime began violently responding to an uprising in the country.