Africa Confidential, May 2025
Colonel Moammar el Gadaffi stashed billions in US banks, and now Libya’s power brokers are vying for control of this hidden fortune. The scramble for wealth has ignited a fierce political battle in Tripoli – one so ruthless that the official leading the recovery has been forced into hiding, fearing for his life. An Africa Confidential Special Report by John Hamilton our North Africa correspondent and managing director of Cross-Border Information.
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After three months in illegal detention – partly in one of Libya’s most brutal prisons – Mohammed al Mensli, Director-General of the Libyan Asset Recovery and Management Office (LARMO) has been released – opening the way for his agency to pursue the recovery of up to US$50 billion in assets stolen by Colonel Moammar el Gadaffi’s regime overthrown in 2011.
Libya earned US$1.25 trillion in oil revenues between 1972 and 2023 but hundreds of billions were stolen during the Gadaffi era. Much of the remaining loot is being held in western banks.
Mensli had been detained by rival officials trying to recover Libya’s hidden wealth. Some of it was diverted into private accounts controlled by senior officials close to Gadaffi or converted into gold deposits held by sundry African governments and used to fund military projects.
Much of the loot was invested in US Treasuries and other bonds held secretly in US banks to evade sanctions against Gadaffi’s regime. Africa Confidential has seen documents supporting these claims, including a list of CUSIPS – unique identification numbers assigned to financial securities in the US and Canada – as well as other documents detailing how the money entered the US and the mechanisms behind nominee ownership structures.
These documents were seized from an office belonging to Gadaffi’s intelligence chief and brother-in-law Abdullah el Senussi at the time of the fall of the regime and the killing of Gadaffi in September 2011. Senussi was sentenced to death by a Tripoli court in 2015 but remains in detention in Tripoli (AC Vol 57 No 14, Gadaffi's desperate bid). The documents resurfaced recently, say officials. The whereabouts of the documents during much of the intervening period and the use – if any – they were put to, remains the subject of conjecture.
The financial transfers referred to in the documents were carried out on the direct orders of Gadaffi. Less clear is his motivation for secreting vast sums in the US while Libya was under sanctions. Bankers and activists say he may have exported hundreds of billions of dollars during his rule, including large amounts of gold to Africa. But little has been recovered so far.
Investigators at LARMO plan to use the documents to pursue legal claims in the US. We hear that it plans legal action on some bonds soon, including discussions with regulators, state prosecutors, law enforcement, the FBI, and the US Treasury Department.
Libyan officials will probably have to trace how the funds were moved and how they bypassed sanctions and other regulations. Investigations may also show ownership structures and whether any of the funds have been misappropriated.
Gadaffi backed home loans
British-based asset recovery expert Jonathan Bearman, who has been assisting LARMO with recovery investigations, says: ‘Between 1994 and 2011, $17.3 billion was invested secretly in US debt instruments, mostly treasury bonds, of various maturities, using nominees and fronts and bank routing via Europe. At least another $10bn was placed in bank deposits. Given the coupons payable on the securities, plus bank interest, we are talking about $45-50bn secreted into the US under Gadaffi, despite sanctions.’
He said the documents itemise 240 US Treasury Bonds, some of 10-year duration or less, and others up to 50 years. They range in value from less than $1 million to over $20m. They also include inflation compensation bonds, as well as Fannie Mae, Freddie Mac and Federal Home Loan Bank of Dallas bonds. Some of the bonds have matured and the cash may be sitting in nominee bank accounts.
Investigators believe the funds were first transferred to another country in the region and from there made their way to institutions in Germany and Switzerland before being transferred to nominees with accounts in at least four US banks. As yet there is no information about how they managed to evade US sanctions, imposed from 1986 to 2004.
Keeping it safe
The task of securing these funds, keeping them safe and administering them correctly faces huge challenges. According to former US Special Envoy to Libya, Jonathan Winer, ‘For Libya to receive the funds for the benefit of the Libyan people it will have to develop structures so funds cannot be accessed until Libya achieves a stable political system, so it does not turn into a slush fund to help somebody to achieve political or personal ambitions.’
Winer described a sovereign development fund structured according to the Santiago Principles, which guide the governance of sovereign wealth funds. He noted that Mensli had spent years working with British lawyers to develop such a framework. ‘It is critical for the effort to succeed that this structure is put in place so the money isn’t stolen a second time.’
As we as guarding against Libyan politicians and companies who want to control or use the funds, the authorities will also need a strategy to defend against third-party claims by businesses who obtained judgements against the Libyan state for unfulfilled contracts. Court action in the US will be followed closely by law firms hoping to secure compensation for their clients.
Libya’s hall of mirrors
The political context in which accountability and custody of any recovered wealth must be established is a hall of mirrors, where little can be taken at face value. Prior to his detention, Mensli was criticised for not doing enough on asset recovery since assuming leadership of LARMO in June 2021, and for being too aligned with the interests of Prime Minister Dubaiba.
Off the record, a respected analyst of Libyan affairs remarked, ‘It has been a number of years. What has LARMO actually recovered? What is their budget and their strategy? What is the basic position?’ He added, ‘You cannot take any major position in the Libyan state without having some kind of arrangement in place because that is how the system works.’
The analyst’s question was: what was Mensli’s relationship with the Dubaiba administration? It is highly ambiguous. Dubaiba appointed Mensli but made no public effort to secure his release or condemn his illegal detention. Africa Confidential understands that he also took no action behind the scenes. Yet, he also did not remove Mensli from office – a decision at least nominally within his power.
Adding to the confusion, Mensli spent his first two years in office opposing a legal action filed by US law firm BakerHostetler LLP in the District Court of New York – an action that seems similar to what LARMO may now need to undertake. Initiated by his predecessor, Anwar Arif, the lawsuit aimed to compel Bank of America, Citigroup, JPMorgan Chase, UBS, HSBC, Credit Suisse, BNY Mellon, and Deutsche Bank to disclose records of Gadaffi-related financial transactions. Africa Confidential has found no evidence to suggest that any of these banks hold Gadaffi-related Treasury Bonds.
While opposing Arif’s application for disclosure, Mensli was also engaged in legal battles in Libya to establish his right to lead LARMO. In December 2021, Arif was arrested in Tripoli and briefly imprisoned. By mid-2023, Mensli had shut down the New York court case but the legal battle in Tripoli continued for another year. He told Africa Confidential that this was necessary to establish his authority. Mensli also said these actions were not directed by the prime minister’s office. ‘I have never allowed them to come close to the way that I am running LARMO,’ he said.
This is important as Dubaiba’s authority to make decisions about Libya’s sovereign wealth is questionable at best. He was chosen to lead the Government of National Unity (GNU) in April 2021 as part of a four-person cartel elected by the UN-supported Libyan Political Dialogue Forum (AC Vol 62 No 7, Dubaiba's honeymoon & Vol 62 No 17, Doubts on elections multiply). The election was tainted by allegations that one of the competing cartels had paid bribes to electors. After confirming this had happened, the UN said the results should stand and released no further details.
The GNU’s mandate was to organise elections by December 2021, after which it was to be replaced. This did not happen, and Dubaiba has remained in power. No process or political force capable of replacing him has yet emerged.
Until recently, he has maintained a form of quasi-stability by using state resources to pay off militias and other interests. In doing so, he handed control of economic interests to factions that he no longer appears capable of managing.
The largest drains on Libya’s resources include massive fuel smuggling, an uneconomic crude oil-for-fuel barter system, an independent crude export business in eastern Libya – said to be run by Saddam Haftar, son of Benghazi-based warlord General Khalifa Haftar – and unchecked spending by Haftar’s parallel government in eastern Libya (AC Vol 65 No 19, Tensions around farcical leadership battle & Dispatches 3/9/24, Oil output collapses as central bank stand-off continues). Recent reports from the Central Bank of Libya warn that the country is facing a financial crisis, with expenditures regularly exceeding oil revenues, making the situation unsustainable.
Facing increasing financial strain, the government is desperate to secure additional sources of wealth to sustain itself. The assets LARMO might recover represent one of the few available opportunities – and certainly the most significant.
WHO DETAINED CHIEF INVESTIGATOR MENSLI – AND WHY?
Mohammed al Mensli, Director General of the Libyan Asset Recovery and Management Office (LARMO), met with officials from the United States administration – the State Department, the Department of Justice, and the Treasury – in Washington in early December 2024 to inform them of LARMO’s intention to pursue claims and to request cooperation to recover the funds in the secret accounts.
Mensli was visiting them days before an unappealable ruling from the Libyan Supreme Court confirming Government of National Unity (GNU) Prime Minister Abdel Hamid Dubaiba’s 2021 decision to appoint him to lead the recovery agency.
It is these steps which appear to have triggered Mensli’s arrest in Tripoli on 7 January. He was charged with unauthorised actions to recover state assets, and of holding dual nationality. He denies the charges.
Mensli told Africa Confidential that just before he was detained by armed men, he had voluntarily attended a meeting at the Tripoli headquarters of the Administrative Control Authority (ACA), where his safety and security had been guaranteed.
The ACA is one of several government audit bodies whose official function is to combat corruption. But under its chair Abdullah Mohamed Qaderbouh it has become an instrument for settling political scores. Africa Confidential has approached the ACA and Qaderbouh for comment.
Following the meeting, two armed men forced him into the basement of the ACA’s office. ‘At this stage I knew I would be kidnapped or even killed,’ he said. LARMO colleagues waiting for him outside the building intervened after he alerted them to his situation by text message, preventing the worst outcome. He was then taken to Jdeida prison, where he was held under severe conditions, denied medication, and repeatedly interrogated.
According to Amnesty International, Jdeida is one of several prisons overseen by Osama Almasri Njeem since 2021. Njeem is a senior member of the Rada Special Deterrence Forces, one of the two most powerful armed groups in the capital. He was recently detained in Turin on an international arrest warrant issued by the International Criminal Court alleging rape, torture and murder at another prison under his control.
Prompting condemnation from human rights activists, the Italian authorities returned Almasri to Tripoli on a private jet in a deal that may have been intended to protect Italian political and economic interests in Libya from disruption by armed militias. The judicial authorities in Italy are investigating the role that Prime Minister Giorgia Meloni may have played in the deal.
Mensli said his interrogation was partly aimed at forcing him to hand over documents relevant to asset recovery, to relinquish control of LARMO, and to allow other officials to use potentially recoverable assets as guarantees for infrastructure procurement deals worth hundreds of millions of dollars.
Former US Special Envoy for Libya, now a Distinguished Diplomatic Fellow at the Washington-based Middle East Institute, Jonathan M. Winer told Africa Confidential: ‘This was a straightforward raid by a variety of people to try and grab hold of a valuable asset. Mensli and LARMO have been working hard at recovery. The closer they get, the more inviting target they are for people who are in need of cash.’
Following intense diplomatic pressure from Britain, Morocco, and other countries, Mensli was released on medical grounds on 27 March. Since then, he has gone into hiding, fearing further threats. The danger stems from LARMO’s clear progress in recovering assets stolen during Gadaffi’s rule – resources that are key to Libya’s future. Control over these sovereign assets is crucial for a country whose economic and financial system has been crippled by years of billion-dollar-scale corruption in the post-Gadaffi era.
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