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Libya and Britain: the new special relationship

The Sunday Times

The compensation campaign involving 200 British victims has been frustrated to date by the government’s reluctance to support the case — even though Libya agreed to pay a small number of Americans who were victims of IRA terror attacks.

Ministerial letters obtained by The Sunday Times reveal this reluctance is partly explained by fears of jeopardising relations with the newly rehabilitated regime of Colonel Muammar Gadaffi. In a letter to the victims’ lawyers dated October 7, 2008, Gordon Brown wrote: “Libya would not support or be prepared to discuss a bilateral settlement of these cases and doing so would entail substantial risks.”

Another letter from Bill Rammell, then a Foreign Office minister, dated November 6, 2008, also says the government will not intervene in negotiations, explaining that Libya is a vital partner for a “secure energy future” and in the fight against terrorism.

The letters provide new damning evidence of the government’s eagerness to maintain good relations with Libya, in which trade appears to weigh more heavily on ministers’ minds than the plight of British victims of terrorism.

The government already stands accused by David Cameron, the Tory leader, of “double dealing” over the release last month by the Scottish government of Abdelbaset Ali Mohmed al-Megrahi, the Libyan convicted of placing the bomb on Pan Am flight 103 which exploded in December 1988, killing 270 people. Suffering from advanced prostate cancer, he was freed on compassionate grounds.

Last weekend The Sunday Times revealed that Jack Straw, the justice secretary, agreed to include Megrahi in a prisoner transfer deal between Britain and Libya at a critical point in negotiations involving BP and Tripoli for an oil deal that may eventually be worth up to £15 billion. Straw had previously said his favoured option was to exclude him from the agreement.

The revelations forced the prime minister to make a statement on the affair on Wednesday. He was emphatic: “There was no conspiracy, no cover-up, no double dealing, no deal on oil, no attempt to instruct Scottish ministers, no private assurances by me to Colonel Gaddafi.”

To try and quell the controversy — and pre-empt any further leaks — the Foreign Office, justice ministry and Scottish executive published a welter of documents concerning the decision to free Megrahi. They made for fascinating reading.

The papers show the Foreign Office gently plying Scottish officials with assurances that there were no legal problems in releasing the Lockerbie bomber. They also show Rammell had told the Libyans in February this year that “neither the prime minister nor the foreign secretary would want Mr Megrahi to pass away in prison” — even though the government had given an undertaking to America that he would serve his sentence in Scotland.

This weekend officials also admitted that Brown had been sent a detailed minute in September 2007 by Straw about concerns that Megrahi’s continuing imprisonment might hold up the BP deal. This was despite earlier protestations that Brown was not “involved at all”. In a newspaper interview yesterday, Straw acknowledged that oil was a “very big part” of the negotiations with Libya over Megrahi.

Frank Lautenberg, a senior Democratic senator in Washington, has called for an inquiry to “expose the truth” and “uncover whether justice took a back seat to commercial interests”. Cameron has said an incoming Tory government would hold an independent inquiry, too.

Has fairness, justice and openness lost out to Britain’s eagerness to court Gadaffi and share in the wealth of his nation?

FIFTY years ago, Libya struck oil. But revenues from the richest proven reserves in Africa have been slow to flow into the economy, hampered by the country’s years as an international pariah. Compared to the gleaming towers and gaudy excessiveness of other oil-rich nations, Libya has struggled with crumbling infrastructure, dilapidated commercial centres and obsolete technology. Since 2003, however, when the United Nations economic sanctions against Libya were lifted, the country has enjoyed a boom in business.

Gadaffi has always been canny in using the business deals in his gift to strengthen Libya’s hand in international relations. The refrain in Tripoli is Gadaffi “rewards his friends and punishes his enemies”.

When Tony Blair went to Libya in March 2004, it provided a huge international boost for Gadaffi — and British businesses. During the trip it was announced that Shell had won a deal worth £550m for gas exploration rights off the Libyan coast.

In Blair’s next trip in May 2007, he described Gadaffi as a man who was “very easy” to deal with. BP reaped the rewards, signing one of its biggest exploration deals.But the fate of Megrahi was a sticking point as BP executives nervously waited for their deal to be ratified in the autumn of 2007. The Libyans wanted Megrahi included in a prisoner transfer agreement (PTA) so they could bring him home, but Straw had told the Scottish government he was ready to exclude Megrahi from the deal.

Sir Mark Allen, a special adviser at BP, was tasked with trying to resolve this political stand-off. Allen’s negotiating skills are renowned in Whitehall. While head of counter-terrorism at MI6, he was a key player in persuading Gadaffi to drop his support for terrorism and ditch his nuclear and chemical weapons procurement programmes.

Now he trained his sights on the government. Straw’s office disclosed last week that Allen had made two telephone calls to the justice secretary on October 15 and November 17, 2007. Six weeks later Straw reversed the government’s stance on the PTA — and told the Scottish government that Megrahi had to be included in the national interest.

Many might find it odd that the cabinet minister charged with overseeing the integrity of Britain’s justice system should even talk to an oil company which had a large commercial interest in the release from jail of Britain’s biggest mass murderer. But Straw saw nothing inappropriate in taking the call. “Mark called asking if he could speak to Jack. Jack, of course, took that call,” said an aide.

Despite Brown’s denial of any “oil-for prisoner” deal, Straw finally admitted this weekend that the risk to the BP deal had influenced his decision to agree to allow Megrahi be included in the PTA deal. “Yes, [it was] a very big part of that,” he said. “I’m unapologetic about that … Libya was a rogue state. We wanted to bring it back into the fold and trade is an essential part of it.”

Brown was also more involved than has previously been acknowledged. One minister said last week that the issue was “off his radar”. Yet Straw’s officials admitted this weekend that a detailed minute outlining the issues surrounding Megrahi and BP was sent to Brown in September 2007.

The documents released last week also detailed the intensive lobbying of Kenny MacAskill, the Scottish government minister who was considering whether to release Megrahi under the PTA or on compassionate grounds.

The UK government’s refrain has been that the decision was one for Edinburgh alone. However, the disclosures of the past week reveal that all the parties involved felt it was worth lobbying both London and Edinburgh. Indeed, among those stating their case was a body with close links to the government and to Labour figures.

Lord Trefgarne, chairman of the Libyan British Business Council, which was set up with the encouragement of the Foreign Office in 2004 and whose honorary patron was the British ambassador to Tripoli, wrote to the Scottish executive warning of the “serious implications” for UK-Libyan relations if Megrahi died in jail.

Business supporters who fund the council include JP Morgan, which reputedly pays Blair £2m a year; Consolidated Contractors International, which has Stephen Byers, the Labour MP, on its payroll; and DLA Piper, the legal firm which employs Baroness Symons, a Labour peer, as an adviser.

Trefgarne said last week he had consulted some of the council’s members before writing his letter, but declined to name the firms that supported his views.

It also emerged last week that Blair had visited Tripoli on several occasions in the past year. According to Abdul Ati al-Obeidi, Libya’s Europe minister, he has regular access to Gadaffi on these trips, although the purpose of his visits was unknown.

Another indication of the government’s obsession with safeguarding UK oil and other business interests in Libya comes in the ministerial letters to campaigners fighting for compensation for IRA bomb victims. When Libya came in from the diplomatic cold in 2004, their lawyers saw the opportunity to seek an apology and compensation.

Libya is known to have supplied the IRA with at least five shipments of arms during the 1980s. The supply chain was exposed in 1987 when French customs seized a freighter, the Eksund, loaded with Libyan arms bound for Ireland, including two tons of Czechoslovak-made Semtex explosive and AK-47 assault rifles.

Under pressure from the Bush White House, Tripoli paid $2.7 billion to compensate the families of Lockerbie victims, a settlement that also included payments to US citizens caught up in IRA attacks. British lawyers wanted the UK government to put pressure on Gaddafi to agree a similar compensation scheme for families of the estimated 2,500 victims of Libyan-supplied bombs in Northern Ireland, London, Manchester and Warrington.

Letters sent by both Foreign Office ministers and Brown made it clear that the government was unwilling to put any pressure on the Libyans that might jeopardise UK trading and commercial interests.

In the letter sent in November 2008 from Rammell at the Foreign Office to Ganesh, he made it clear that BP’s investment in Libya was one of the reasons why the government was unwilling to push the issue of compensation: “Libya has genuinely become an important international partner for the UK on many levels. For example, Libya is now a vital partner for the UK in guaranteeing a secure energy future for the UK and is also a key partner in the fight against terrorism.

“While I recognise that this will be of little comfort to you, it is vital for the UK’s present and future security that this continues.”

The documents passed to The Sunday Times reveal how the prime minister personally blocked the pleas for assistance from lawyers representing the IRA victims. He also acknowledged that safeguarding Britain’s relations with Libya was a consideration in his decision.

Jason McCue, the lawyer representing 200 IRA victims, said this weekend: “I have great respect for Gordon Brown. He is a man of principle. However, I am disappointed that he has chosen to follow the line taken by the Foreign Office which puts Britain’s commercial and energy interests above the interests of justice.”

AS Gadaffi last week celebrated 40 years in power, Megrahi lay desperately in hospital. He was too tired to talk, he told a Sunday Times reporter allowed to visit him at his bedside. According to his son-in-law, his cancer has spread to his spinal cord, bones and other organs.

Despite the row over his release, there will be relief in the Foreign Office and among British expats that Megrahi is finally home. However, Gadaffi is a mercurial character at best.

The dangers of incurring his wrath is exemplified by the Swiss authorities, who rashly arrested one of the dictator’s sons last year in Geneva for a suspected assault. Switzerland has since apologised after two of its nationals were detained in custody in Libya, but Gadaffi has proposed to the UN that the country be abolished and divided up among its neighbours.

Britain can still count itself among Gadaffi’s favoured friends. The dividends will be new business and the likely fast-tracking of deals.

The Labour government can rightly claim that one of the greatest diplomatic achievements in recent years has been the transformation of Libya from rogue state to member of the international community. But it has come at a cost — one that Brown and his ministers are still counting this weekend.

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