Lockerbie Deal and J.P.Morgan Chase as #Libya's Central Bank

All thanks to Tony Blair.

I was re-reading the article on the Wall Street banks who has their hands on the Libya's sovereign wealth fund money (which I linked on my post here), and something caught my attention on the second read:

JPMorgan Chase

reportedly handles much of the LIA's cash and some of the Libyan central bank's reserves. The summer after then-Secretary of State Condoleezza Rice visited Gaddafi in 2008, LIA gave "mandates to some of the international banks, including JPMorgan to manage their funds in the interbank money markets, according to Vanity Fair.

JPMorgue manages reserves of the Libyan central bank??

WTF?

So I went to the Vanity Fair link in the article, and I landed on "The Lockerbie Deal", Vanity Fair exclusive on 1/26/2011 by David Rose. Note the date - one day after the large demonstration in Egypt, but Libya was still "peaceful", and I don't think the article got much attention:

In 2009 the convicted Lockerbie bomber was sent home to Libya from a Scottish prison on grounds of “compassionate release”—he had only three months to live, authorities said. A year and a half later the man is still alive—and a Vanity Fair investigation reveals new details about the business interests and private dealings that lay behind the prisoner’s release. At the heart of the matter: the cozy and “profitable relationships” between the Blair government and Qaddafi’s Libya.

It so turns out that British Prime Minister Tony Blair and his officials bent over backward to accommodate Gaddafi so that their favorite businesses would get lucrative business deals with Gaddafi's Libya and they would land on a cushy job in the private sector.

And J.P.Morgan Chase purchased Tony Blair for $3 million per year.

The relevant part of the Vanity Fair article:

And then there is Blair himself, who in the three and a half years since stepping down as prime minister has reportedly earned at least $30 million from his various business dealings around the world. Like many retired politicians, Blair commands high fees for public speaking, but in terms of income these fees represent a sideshow. In January 2008, Blair accepted a position as a consultant to the American bank J.P. Morgan Chase for a reported compensation of $3 million a year.

.... But Blair’s employer, J.P. Morgan, does have commercial relationships with Libya. Three senior British officials, speaking on condition of anonymity, say that Blair has made numerous trips to Libya since leaving Downing Street, at least partly on behalf of the bank. “The Blair magic still works with Qaddafi,” one of these officials observes. “Qaddafi will drop everything to see Blair.” Saif al-Islam, Qaddafi’s probable heir, said last summer that Blair was “a personal family friend” and added that Blair had visited Libya “many, many times” since leaving office.

Neither Blair nor the bank will say anything about what he does to justify his salary, either in Libya or elsewhere. Executives at other banks with Libyan interests say that J.P. Morgan now handles much of the Libyan Investment Authority’s cash, and some of the Libyan central bank’s reserves. Blair joined J.P. Morgan in early 2008—just as the authority began to ask foreign banks and asset-management companies for specific proposals as to what they might do with its billions. There was no shortage of takers. A Libyan official says: “We were besieged.” A voice at the table like Blair’s would get attention.

For J.P. Morgan, there was a further factor at work. It was able to start looking for Libyan money in 2008 because the climate had improved thanks to Qaddafi’s payment of the final tranche of compensation to the families of the Lockerbie victims ($10 million per family), a rapprochement sealed by the visit by then secretary of state Condoleezza Rice to Tripoli. By the summer of that year, says a Libyan financier, “a great percentage of the L.I.A.’s funds were in the interbank money markets, channelled through the central bank. They have given mandates to some of the international banks to manage this liquidity”—including J.P. Morgan. J.P. Morgan has not indicated whether it intends to take the next logical step and apply for one of the licenses being offered to foreign banks to set up operations there. I asked J.P. Morgan’s spokesman, Brian Marchiony, about this specific matter, about the bank’s handling of Libyan assets in general, and about Tony Blair’s role in developing its business. He replied by e-mail, saying simply: “We’re going to decline to comment.”

Another interesting tidbit in the article:

Until 2009, Rothschild was an adviser to the Libyan Investment Authority.

Well, no wonder Gaddafi says "People love me." Everyone wanted to do business with him, at whatever cost - BP, J.P.Morgan Chase, Tony Blair, Rothchild.

I wonder if the Libyan central bank reserves that J.P.Morgan Chase handles include gold...

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