Adam Ciralsky

While spooks, treasure hunters, and lawyers search for cash, gold, and antiquities, Libya offers a lesson—and 1,001 cautionary tales—about how to recoup loot from kleptocrats.

PART (II)

The Arab Spring, which arose in neighboring Tunisia in 2010, quickly spread to Libya and kickstarted a revolution. “We were focused on getting Qaddafi out,” recalled Ben Fishman, who served as Obama’s NSC point person for Libya and North Africa and is now a senior fellow at the Washington Institute for Near East Policy. “Once it became apparent that he wouldn’t leave on his own, wouldn’t see or listen to any of our envoys, and said we were all supporting terrorists, we froze everything.”

The U.N. Security Council adopted two resolutions. The first ordered the seizure of identifiable assets belonging to Qaddafi, his family, and key allies. The second targeted state-owned entities such as the Central Bank of Libya (CBL) and the Libyan Investment Authority (LIA). To this day, some $70 billion in LIA funds alone remain frozen.

Jonathan Winer was named special envoy not long after the Benghazi attack became a political minefield, one which career-minded Washingtonians ran from, not toward. “I never would have had the chance to work on Libya if it wasn’t considered a lost cause,” he explained.

Acerbic and contrarian, Winer, who worked under Secretary of State John Kerry recalled how Kerry’s deputy, Bill Burns (now the head of the CIA), tasked Winer with the post-Benghazi overhaul: “Chris Stevens was murdered, and they needed somebody who was willing to go in and deal with something that was not likely to succeed.”

Meanwhile, foreign nations and terrorists moved in, jockeying for power and resources. When ISIS swept in, too, seeking to bisect the country in 2014, Washington helped Libya extirpate many of the group’s fighters. “As Samuel Johnson suggested, nothing concentrates the mind like the prospect of a hanging,” Winer observed. “In this case, there were actual beheadings on the beach.”

In 2020, civil war gave way to a cease-fire and the U.N. helped establish a political process to pick an executive to run the fractured country. The darkhorse victor: a wealthy businessman named Abdulhamid Dabaiba, who in early 2021, assumed the post of interim prime minister in Tripoli, in the western sector of the country.

In the arid east, this past February, the Libyan House of Representatives, angered by Dabaiba’s failure to hold national elections as scheduled, picked a rival prime minister, Fathi Bashaga.

Talk about dueling pianos. As Mensli recounted, last June, Dabaiba placed him in charge of the LARMO effort to find and reclaim the country’s missing riches. But even as Mensli moved into new digs on the prime minister’s compound, a man named Anwar Arif—who had been running LARMO since its inception—continued operating from a separate suite of offices on the outskirts of town, according to sources familiar with the situation. That is, until last December, when Arif was called into the Libyan attorney general’s office and detained.

To try and understand why—and why I had been meeting with Mensli in London, instead of his predecessor, Arif—I went to see a bookish 53-year-old attorney named Oren Warshavsky in his spacious office in Manhattan’s Rockefeller Plaza, overlooking St. Patrick’s Cathedral.

Warshavsky is a partner at BakerHostetler, a prominent firm with roughly a thousand lawyers. He cochairs the company’s Global Fraud and International Asset Tracing and Recovery team, which made its bones by helping to claw back nearly three quarters of the $19.6 billion that Bernie Madoff stole in what remains the largest Ponzi scheme ever.

“Within a 12-day period we filed about 1,200 lawsuits against 4,000 parties worldwide,” he said of the Madoff madness. “These Madoff cases allowed us to try new tactics in jurisdictions that otherwise don’t usually allow discovery, like Luxembourg and Monaco, and we challenged bank secrecy practices in Switzerland, Germany, and Austria.”

It made a lot of sense, then, that LARMO had enlisted Warshavsky to help the office go after the larcenists who had fleeced Libya. Warshavsky’s firm took on the case, which in time may prove to be “the largest international asset recovery effort of all time.”

In December, he lobbed a legal grenade in New York’s Southern District, filing an application on LARMO’s behalf that asked a federal judge to compel eight of the world’s biggest banks to turn over records of Qaddafi’s money movements.

“LARMO’s mandate,” Warshavsky maintained, “is to recover anything stolen or misappropriated from Libya. We quickly started adding things up, based on public sources—like the U.N., WikiLeaks, the Panama Papers, the Paradise Papers, and so on—and worked with a few different investigators who’ve followed Libya, and whom we trust. Some would say that as much as $300 billion has been stolen.

Those sources also indicate that Qaddafi’s family alone may account for $40 to $200 billion. It’s hard to wrap your head around those numbers.”

Days after the filing, Arif was in Libyan custody. Several individuals with knowledge of the matter maintained that he was confined to a detention center in Tripoli run by the Ministry of the Interior. While Arif was allowed access to food and medicine, these sources noted, his communication devices were seized, and he was granted only intermittent visits with his family.

These sources told me that Libya’s attorney general did not satisfactorily answer their requests to articulate why, and on whose orders, Arif had been detained in the first place.

One U.S. official, echoing the sentiments of others, said she believes Warshavsky’s court filing had been too public a gesture for some members of the Libyan power elite, worried perhaps that legal proceedings in New York might ensnare current officials who themselves had played some role in Qaddafi’s original money grab.

“Had Anwar [Arif] continued behind the scenes, doing his work, he might not have ended up in detention.” (Western sources in regular contact with Arif said that he was released after nearly two months, when appellate courts upheld an earlier decision by a government supervisory body—the Administrative Control Authority—declaring that the prime minister’s office lacked the authority to remove and replace Arif.)

While Arif would not agree to comment for this story, some in his camp believe he was relieved of his LARMO duties because Dabaiba wanted to keep Arif’s portfolio well within his bailiwick. Dabaiba’s office, meanwhile, did not provide answers to questions concerning Arif’s ouster or Dabaiba’s motives in placing LARMO under Mensli.

Those in the international community who had come to rely on Arif’s leadership questioned the changing of the guard at LARMO. “Our assumption is that Dabaiba wanted his guy there who would be more pliant and willing to send funds toward the [Dabaiba-led government] for political survival,” said one top U.S. official, who sees the maneuver as part of a broader phenomenon.

“Any organization, including LARMO, that is in a position to generate cash is going to come under this kind of pressure as [opposing factions in Libya’s] east and west battle it out.” A key Libyan intelligence figure put it even more bluntly, telling me he sees Arif’s detention as evidence of Dabaiba’s ability to enforce the golden rule: Dabaiba has the gold and makes the rules. That extends, of course, to whom he selects as an emissary to scour the world for the rest of Libya’s gold.

Irrespective of who is at the helm, Warshavsky continues to represent LARMO, calling the pursuit of Muammar Qaddafi’s assets “a once in a lifetime case. It feels a bit like Madoff, in that there are a vast amount of innocent victims who have suffered as a result of theft and the looting of assets. What’s different is: It involves a country which is both one of the richest in the world in terms of natural resources—and historically one of the most corrupt.”

Whether Warshavsky and his counterparts at Holland & Knight (another prominent firm) succeed in prying documents out of Bank of America, Citigroup, JP Morgan Chase, UBS, HSBC, Credit Suisse, BNY Mellon, and Deutsche Bank, remains to be seen. (The case is stayed for the time being.) This much is certain, though: Their work has the potential to air a lot of dirty laundry—some of it potentially belonging to Libya’s current leadership.

Prime Minister Dabaiba’s improbable rise, it so happens, had raised eyebrows in Western capitals, not only because he was a political novice, but also based on how he “climbed to the top of the greasy pole”—to quote Benjamin Disraeli’s description of his own ascension to prime minister in Britain in the 19th century. “That was a narrow victory,”

one American diplomat confided, “and a surprise one. Nobody expected Abdulhamid [Dabaiba] to win. It’s never been proven that people were bribed, but that is sort of the working [hypothesis] here. And Ali is tied in with that, in the rumor mill.”

“Ali” is none other than the prime minister’s cousin, Ali Ibrahim Dabaiba, who faithfully served Muammar Qaddafi from 1989 until the regime’s fall in 2011. He did so as chairman of the powerful, if blandly named, Organization for Development of Administrative Centers (ODAC), which handed out thousands of public works contracts worth tens of billions of dollars.

Drawing on leaked documents from Cyprus, the Organized Crime and Corruption Reporting Project observed that, by some accounts, Ali Dabaiba “may have misappropriated between $6 and $7 billion” by “charging excessive ‘commissions’ and awarding tenders to companies that were linked to him or that he secretly owned outright.”

During that time, Ali’s cousin, the current prime minister, led a separate but allegedly affiliated state-owned enterprise, the Libyan Investment and Development Company. (In 2016, a lawyer representing the Dabaiba family told The Guardian that the allegations against Ali were “baseless,” and that Ali and his relatives were “not wanted by any judicial, financial or security bodies.” Vanity Fair was unable to reach Ali Dabaiba, though a source in his circle dismissed the allegations as old news.)

When I asked a seasoned Libyan intelligence official about all of this, he snickered, “Of course, Abdulhamid [Dabaiba] is sitting on stolen Qaddafi assets!” (Representatives for the prime minister did not respond to Vanity Fair’s requests for comment.)

Libya’s avowed leader, according to senior U.S. sources, has worked to ensure that ODAC is firmly under his control—something that was not the case in earlier post-Qaddafi governments. The move was said to infuriate the prime minister’s political opponents.

Back in Ghana, Tim Lawrence still had doubts about the pallets of cash. To cover their flank, the fortune seekers, according to Lawrence, were accompanied by some Ghanaian heavy hitters, including a “captain” who presented himself as the president’s director of security and an officer with the country’s national investigations bureau.

Both men were supportive of the mission, Lawrence said; so was another American in the group and one of their Canadian compatriots. They nicknamed one of the local intelligence operatives Archie Bunker. “Every time we saw Archie, he would be in a different car without plates,” one of the men remembered. “A white Jaguar. Then a black Mercedes or BMW and another one after that.

He always made sure to show us the gun he had in the vehicle.” Beyond the flash and bang, Lawrence recalled, another Ghanaian gun-toter was kind enough to bring out bolt cutters when the group rolled up on the first target, adjacent to Kotoka International Airport.

“We hit the first warehouse and there’s nothing there,” Lawrence recounted. “Then we’re told, ‘Wait, the real stuff is at the warehouse in Tema,’ an industrial area on the outskirts of Accra.” Eventually, the group piled into an Uber—an unorthodox but zeitgeisty mode of transport for a takedown—and headed due west.

With their vehicle idling in the summer heat, the buccaneers co-opted a guard and made their way into a corrugated metal building resembling an aircraft hangar. Once inside, they found dozens of wooden pallets wrapped in orange cargo netting—of the exact dimensions Lawrence had sketched out—as well as shelves packed to the rafters with colorful boxes of a uniform shape and size.

Finally, they thought, they had hit pay dirt. Until they hadn’t.

“The warehouse is real,” Tim Lawrence said, referring to the escapade as if it were happening in real time. “The pallets are real. But the real pallets are empty.” Apparently, the Tuareg and some unidentified coconspirators had done their own calculations and arranged the construction of a Potemkin vault complete with enough pallets to credibly house billions of dollars.

As for the container stuffed with $100 bills that the Tuareg showed one of their associates, “It had a false bottom,” explained Lawrence.

The elaborate ruse backfired. The Tuareg was hauled in by the intelligence service, which sounds almost textbook, except that the Tuareg spoke only Tamashek and passable French. So, it fell to Lawrence, who speaks fluent French and passable Arabic, to assist in the questioning. “I bet if you went to that warehouse in Tema today,” he told me, “The same scam would be up and running.”

“Have you heard about Sukarno gold?” Jonathan Winer asked me, referring to the man who led Indonesia’s independence movement and served as its first president. When Sukarno died in 1970, a quixotic quest began for bullion belonging to the strongman that was supposedly kept locked in European bank vaults.

For years, Winer said, a parade of shifty characters appeared, offering financial instruments that would grant their holder access to a treasure trove—Willy Wonka–style. “I saw the certificates at the time [but] I was never convinced it was anything more than a giant scam,” Winer recalled.

“I don’t know how much of Qaddafi’s hidden assets are Sukarno gold, the key to the Lost Ark of the Covenant kind of stuff. Some of it is real and still exists and probably can be found and held and eventually repatriated to Libyan hands. But who knows?”

There does, however, appear to be one class of assets that clearly are authentic and ripe for repatriation: antiquities.

As fate would have it, the acceleration of Libya’s asset recovery efforts has dovetailed with a push by American and European authorities to crack down on the trafficking of looted artifacts, which historically has been treated as a victimless crime whose offenders have at times been treated with kid gloves.

“It’s basically about one rich guy in Paris or Munich or New York, potentially defrauding another rich guy, say, a collector—and, frankly, nobody cares,” explained Anya Neistat, a legal director at the Clooney Foundation for Justice, an organization founded by actor George Clooney and his wife, Amal, a Lebanese-British barrister renowned for her human rights work.

Neistat, 46, was born in the Soviet Union and studied law in the U.S. After a stint as a journalist, she spent years at Amnesty International and Human Rights Watch, where she and her husband led investigations in conflict zones around the world.

Two years ago, the Clooneys put her in charge of the Docket, as their foundation’s investigations and legal action arm is known. “Traditional human rights advocacy doesn’t quite work anymore,” she told me when we met up in Paris. “The perpetrators have become quite impervious.

Naming and shaming just doesn’t cut it. I was very keen to spend whatever is left of my professional career putting criminals behind bars rather than criticizing them in reports.”

She began by focusing on how conflicts—and the human rights violations that almost inevitably flow from them—are financed. “Very soon, and somewhat to our surprise,” Neistat said, “we came to the issue of antiquities.” (This week, in fact, Neistat is in Washington to release a new report titled, “Conflict Antiquities: The Need for Prosecuting Participants in the Illegal Antiquities Trade.”)

In the 1990s, as nations like Greece, Egypt, and Turkey tightened controls over archaeological sites and exports, smuggling networks trained their sights elsewhere, including Libya. Qaddafi, at a minimum, looked the other way as rare pieces appeared for sale in the West and ended up in prominent museums and private hands. After the Libyan leader met his maker, a different set of ne’er-do-wells got in on the act. “It’s pretty much any armed actor that operated in Syria, Iraq, Libya, and Yemen,” Neistat noted.

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