Report: How Libya Lost More Than $1 Billion With Goldman Investment
Back in 2008, when Libya was making inroads with the Western world, it also wanted to get in on the global economic boom. So, the Wall Street Journal reports, Libya's sovereign-wealth fund, which is controlled by Col. Moammar Gadhafi, gave $1.3 billion dollars to Goldman Sachs so they could invest it for them.
According to the Wall Street Journal, which relied on internal documents and interviews with Goldman executives for its report, by the time all was said and done Goldman had failed miserably to make any money for the Libyans. In fact, the investment dwindled to $25.1 million by February of 2010. That's a 98 percent downturn caused by the global financial crisis.
The whole piece is worth a read, because it's a novel view into the financial crisis. But, here's a short excerpt that describes the Libyan reaction to some very bad news:
Officials at the sovereign-wealth fund accused Goldman of misrepresenting the investment deals and making trades without proper authorization, according to people familiar with the situation. In July 2008, Mr. Zarti, the fund's deputy chairman, summoned Mr. Kabbaj, Goldman's North Africa chief, to a meeting with the fund's legal and compliance staff, according to Libyan Investment Authority emails reviewed by the Journal.
One person who attended the meeting says Mr. Zarti was "like a raging bull," cursing and threatening Mr. Kabbaj and another Goldman employee. Goldman arranged for security to protect the employees until they left Libya the next day, according to people familiar with the matter.