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When truth about Britain’s dealings with Libya turns out to be a mirage

The Times

August 29, 2009
Tom Baldwin: Analysis

In the Libyan desert, across which Britain’s politicians and business interests have warily trodden similar routes over recent years, apparent truth can turn out to be a mirage.

What were the precise terms of the agreement that Britain reached with the US and Libya in 1999 that those convicted of the Lockerbie bombing would serve out their sentences in Scotland? Just what did Tony Blair say to Colonel Muammar Gaddafi when they met in 2004 and again, in the Libyan leader’s tent, in 2007? Exactly what was going on inside the heads of British and Scottish government ministers during the fraught negotiations in recent months over the fate of Abdul Baset Ali al-Megrahi?

Both of Mr Blair’s trips coincided with the announcement of big trade agreements for Shell and then BP. The oil industry clearly resents media speculation that such deals were linked to politics. BP denies that the Libyans put pressure on it over the fate of al-Megrahi, the Lockerbie bomber, who until this month was languishing with terminal cancer in Greenock prison. Nor, says the company, did it lobby the British and Scottish governments over such issues.

Details of Mr Blair’s role in removing diplomatic obstacles to trade with the oil-rich Libyans were, however, slow to emerge from behind the sparkle of the huge BP oil deal in 2007. A passing reference to “judicial co-operation” turned out to be a plan for a prisoner transfer agreement with Britain.

The Scottish Government, by then controlled by the SNP, objected. There was clearly only one prisoner in whom the Libyans were interested — al-Megrahi. They asked for any agreement to preclude those convicted before the deal was done. The Libyans refused.

According to correspondence obtained by The Times, Lord Falconer of Thoroton, then the Lord Chancellor, wrote to Alex Salmond, the SNP leader, offering reassurance on June 22, 2007. “Libya agreed prior to al-Megrahi’s trial that anyone convicted of the Lockerbie bombing would serve their sentence in Scotland,” he wrote. “For this reason, any prisoner transfer agreement with Libya could not cover Mr al-Megrahi.”

The agreement to which he referred was one brokered between Britain and the US with the UN in 1999: the suspects would be tried on neutral ground in the Netherlands but serve any sentence in Scotland. According to a senior government adviser involved in those negotiations, the insistence of a Scottish jail was necessary before Robin Cook, the Foreign Secretary, could overcome strong US resistance to the deal from Madeleine Albright, the Secretary of State.

Mr Blair, when asked this week about his conversation in Colonel Gaddafi’s tent in 2007, said: “The Libyans were raising the case of al-Megrahi all the way along . . . We made it clear the only way this could be dealt with was through the proper procedures.”

Sources close to him suggested yesterday that discussions about a prisoner transfer were vague. Libya, however, clearly regarded the prisoner transfer agreement (PTA) with Mr Blair as having a direct bearing on al-Megrahi.

In an interview with the Glasgow Herald yesterday, Colonel Gaddafi’s son, Saif al-Islam Gaddafi, said: “It was part of the bargaining deal with the UK. When Tony Blair came here we signed the agreement . . . We signed an oil deal at the same time. The commerce and politics and deals were all with the PTA.”

Britain has repeatedly denied that trade deals were tied to negotiations over al-Megrahi.

When a transfer application was made this year, however, the Foreign and Commonwealth Office appeared to backslide on the force of its 1999 deal with the US. In a letter on August 3 to Kenny MacAskill, the Scottish Justice Secretary, Ivan Lewis, a Foreign Office minister, wrote: “While the US pressed us to provide a definitive commitment on the future imprisonment of the Lockerbie accused, the UK Government of the day declined … it did not wish to bind the hands of future governments.”

Mr MacAskill, having been lobbied by angry US officials, was convinced that it was more like a firm commitment — and rejected the application. He then decided to release al-Megrahi anyway on “compassionate grounds”.

Competing theories for why he did so include suggestions that he did not want to risk embarrassing the Scottish justice system with a retrial, Libyan pressure on the oil firms working the North Sea, or just old-fashioned liberal benevolence towards a dying man. Another truth lost, perhaps between the sands of Libya and the mists of Scotland.

RELATED ARTICLE

The Times
August 29, 2009

Secret delegation went battling for British interests in Tripoli

David Robertson, Richard Kerbaj and David Brown

A delegation of influential establishment figures arrived in Libya to ease the way for the return of British businesses ten days after Tony Blair ended the country’s diplomatic isolation, The Times has learnt.

They landed at the same Tripoli airport at which the Lockerbie bomber was given a hero’s welcome last week amid speculation about how far Britain’s business interests had influenced the decision to release him.

Mr Blair became the first prime minister since Churchill to travel to Libya when he held his “Big Tent” meeting with Colonel Gaddafi in March 2004. Less than a fortnight later a flight laid on by the Libyan leader’s son, Saif al-Islam Gaddafi, brought representatives from British businesses.

On board were the architect Lord Foster of Thames Bank; Lord Guthrie of Craigiebank, the former Army Chief of Staff; Sir John Bond, the chairman of HSBC, Britain’s biggest bank, and the financier Lord Rothschild. Lord Rothschild brought along his youngest son, Nathaniel, and the party was accompanied by four executives from a public relations firm run by Lord Bell.

The delegation marked the first steps by British business back into Libya since the United Nations imposed sanctions in 1992. At stake was access to oil and gas reserves and the opportunity to profit from the country’s $90 billion sovereign wealth fund, the Libyan Investment Authority.

Lord Rothschild, 73, was until last year an adviser to the Libyan Investment Authority and Mr Bond’s HSBC is understood to be managing billions of dollars for the fund. Lord Foster’s company, Foster & Partners, has signed contracts for two large developments.

Mr Blair returned to Libya in March 2007 for a meeting with Colonel Gaddafi at which they signed “memorandums of understanding” covering defence, tourism, economic and financial development and health: all areas where British business could benefit.

Sir Howard Davies, the head of the London School of Economics and former head of the Financial Services Authority, was asked by Mr Blair to be his economic envoy to Libya in 2007, partly because Saif Gaddafi was taking a PhD at the LSE.

“The aim was to facilitate various links between the Libyan authorities and the financial authorities in the UK,” Sir Howard said.

Almost 100 other major companies are members of the Libya British Business Council, which is chaired by Lord Trefgarne, a former defence procurement minister in the Thatcher Government. Defence is potentially one of the most lucrative areas of business as Libya looks to upgrade its equipment.

Since the 2007 agreement, defence sales to Libya have grown rapidly from £5 million to £12 million last year and £9 million in the first three months of this year alone.

The biggest potential beneficiaries will be the oil companies, as Libya has the largest reserves in Africa. On the day that Mr Blair returned to Libya in May 2007, BP announced a £545 million deal to explore for oil. Shell and BG Group have also signed exploration deals.

The big carrot for the City is Libya’s national wealth, which is being invested by the LIA. About 60 per cent of its capital is yet to be invested. This could be very lucrative for the banks and a trade mission of 24 asset managers went to Libya in May to tout for business. But behind the renewed friendship lurked the presence of Abdul Baset Ali al-Megrahi, who was convicted in 2001 of the bombing of a Pan Am airliner above Lockerbie in December 1988, in which 270 people were killed.

The Libyan authorities insist that he is the victim of a miscarriage of justice. Saif Gaddafi said at the weekend that he was referred to in all negotiations with Britain and Mr Blair admitted this week that the bomber’s future was discussed during his 2007 visit.

A line in the official joint communique issued after that visit which referred to “judicial co-operation and training” went unnoticed at the time.

However, the Memorandum of Understanding signed two months later committed the Government to agree to a deal within 12 months on transferring prisoners back to their home countries, and to seeking the agreement of the devolved jurisdictions. The deal was signed by the Government last November, with the intention that it would implemented by the following March.

On March 3 the influential Parliamentary Joint Committee on Human Rights wrote to Jack Straw, the Justice Secretary, seeking a delay in implementation. In a highly unusual move Mr Straw, who was Foreign Secretary at the time of the 2004 deal with Libya, refused. He said that it was “likely to lead to serious questions on the part of Libya in regards to our willingness to conclude arrangements”.

A month after the law was implemented the Libyan Government applied for al-Megrahi to be transferred home.

Saif Gaddafi said yesterday that the original prisoner transfer agreement (PTA) was directly linked to talk on trade and oil — and that al-Megrahi was central. “We have tried many times in the past to sign the PTA without mentioning Mr Megrahi, but it was obvious we were targeting Mr Megrahi and the PTA was on the table all the time,” he said.

When al-Megrahi was found to have cancer, British expatriates in Libya were warned that they faced serious repercussions if he died in prison. It was a threat to be taken seriously. When Colonel Gaddafi’s son Hannibal Gaddafi and his wife were arrested in Geneva accused of beating two of their servants, the Libyans imposed economic sanctions and seized two Swiss businessmen in Tripoli.

The Italians have also paid a heavy price. Silvio Berlusconi, the Italian Prime Minister, has been forced to agree to pay $5 billion over 25 years as compensation for colonial-era misdeeds. But there have also been benefits for Mr Berlusconi, whose broadcasting company Mediaset last year announced that it had bought a 25 per cent stake in Nessma, a Tunisian-based satellite channel broadcasting into Libya.

For British interests the al-Megrahi issue was resolved when he was returned to Libya after being released on compassionate grounds.

Mohamed Fezzani, a Libyan-born former banker and a board member of the Libyan British Business Council, said: “We were worried he would die in prison, which would have affected the business side in Libya. The relationship is good already but this will give it an enhancement and clear the air.”

Whatever the reason, al-Megrahi’s arrival in Tripoli means that for British interests it is now business as usual.

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