Report: Goldman Sachs had 'strengthened ties' with Qaddafi's Libya fund
A lawsuit filed by the LIA revealed how western financial institutions solidified relationships with the country’s wealth fund
Court documents show that Goldman Sachs admitted to using entertainment, gifts, occasional travel, an internship and training to strengthen ties with the Libyan Investment Authority under deposed leader Muammar Qaddafi, the Financial Times reported on Friday.
A $1 billion lawsuit filed in London by the Libyan Investment Authority (LIA) revealed the methods western financial institutions used to solidify relationships with the country’s wealth fund.
These methods are being investigated in the United States as to whether they have reached a status of bribery. However, the bank upholds that its actions did not result in unusual influence and that it kept “an arm’s-length banker and client relationship,” with the LIA, the Financial Times said, quoting the defense filed in London’s High Court last week.
In response to accusations that Goldman entertained high-level LIA officials using the bank’s credit card, the defense argued that the LIA was aware of the accommodation and entertainment provided.
The LIA also accuses Goldman Sachs of exploiting what it described a short financial experience to force the fund into risky and lossmaking investments, while the bank profited with a sum of almost $350 million.
The bank responded to the accusations by listing high-profile names such as Lord Jacob Rothschild and Sir Howard Davies, on the LIA’s advisory board in addition to claiming that it had explained the risks that came with the trades.
As to the internship, the bank said it was awarded to relative of a senior ILA official after the last disputed trade was entered into, the Financial Times said.
“The internship was viewed by the [bank] as part of the training programme it offered to the LIA,” the bank’s defense explained.