The Sentry
How Western Libya Paved the Way for an Eastern Libyan Scheme
In the months leading up to the 2019 offensive against Tripoli, Sadiq al-Kabir, governor of the CBL from 2011–2024, took strategic steps to contain his adversaries in western Libya while accommodating those in eastern Libya. Indeed, Kabir seemed to hedge against a potential Haftar victory.
In 2018, he overhauled the leadership at the LFB—the CBL’s wholly owned subsidiary through which most of Libya’s daily dollar operations flow, from letters of credit to direct transfers.
In doing so, he consolidated his control over state funds while working against the UN-recognized government in Tripoli, which sought to undermine him. Kabir also promoted Farhat Benqdara, a banker closely aligned with the Haftar family in Benghazi, to chairman of al-Masraf. These maneuvers would prove instrumental in enabling the $300 million scheme on the eve of Haftar’s attack.
For Kabir, 2018 was a year of vulnerability, marked by the dinar’s weakness, criticisms from the Haftar family, and attempts from the eastern-based House of Representatives to replace him.
Among other self-preservation maneuvers, Kabir dismissed the entire LFB leadership in August 2018, ostensibly to prevent financial losses. Whatever Kabir’s motives, this restructuring resulted in a consolidation of his personal control over Libya’s oil revenues and eliminated influence from the then-GNA, a political adversary.
Indeed, GNA leader Fayez al-Sarraj and several of his ministers resented Kabir’s habit of treating state liquidity as a political lever, disbursing funds to the Tripoli government selectively and on his own terms.
In October 2018, Tripoli militias aligned with Kabir forcibly removed Mohammed Bin Yusuf, the incumbent managing director of the LFB, from office, instead installing loyalist Mohammed Najib al-Jamal at that strategic post.
Soon afterward, it was Jamal, then known for his subservience to Kabir, who transferred $300 million from the LFB to al-Masraf as a guarantee deposit backing the conflict-financing scheme.
Given the strict hierarchy between the two men, it is implausible that Jamal could have granted such a critical financial transaction to al-Masraf without Kabir’s assent. The CBL did not respond to The Sentry’s request for comment.
In parallel with the 2018 changes at the LFB, Kabir pursued a rapprochement with Farhat Benqdara, a fellow Libyan banker known for his proximity to the very Eastern factions seeking to undermine Kabir. Benqdara, a Benghazi native, was the final CBL governor under the Qadhafi regime, a role he held until the 2011 uprisings.
After fleeing to Turkey in February 2011 and relocating to the UAE where he acquired Emirati citizenship, Benqdara became aligned with the Haftar family. In 2018, he became a key economic advisor to the field marshal and his sons.
Despite these ties to Kabir’s adversaries, the Tripoli based governor cleared the path for Benqdara to become chairman of al-Masraf in 2018.
The Libyan state’s equity state in al-Masraf is held through the LFB, which gave Kabir enough votes to help secure the chairmanship for Benqdara. Kabir’s move appears driven by self-interest.
First, by promoting a Haftar ally to a senior banking post in Dubai, Kabir bought time and reduced immediate threats from eastern groups who were seeking to remove him as CBL governor.
Second, the two bankers shared a history. In the late 1990s, when Kabir faced legal troubles, then-CBL governor Benqdara helped rehabilitate him professionally.59, 60 In some respects, the appointment appeared to serve as repayment for that earlier assistance.
Third, facing pressure from eastern Libya, Kabir likely sought to hedge his bets by facilitating the rise of a Benghazi figure who could bridge the gap between Kabir and his main adversaries, should those actors succeed in capturing the Libyan capital.
This history serves as a reminder that Libya’s east-west divide is seldom absolute. In illicit finance, political adversaries often cooperate for mutual profit.
By the same token, Prime Minister Abdelhamid al-Dabaiba’s government in Tripoli has yet to denounce Gadalla, thus maintaining connections between the country’s main rival networks.
Why Gadalla Matters Today
Between militia power and finance
Despite the LAAF’s collapse on the outskirts of Tripoli in 2020, the Haftar family has since consolidated power in eastern Libya, capturing most social and economic life.
Within this environment, Gadalla has become a pivotal figure in the illicit networks the Haftar family runs in eastern Libya and beyond.
Gadalla is a meaningful case study not because he is an outlier but rather because his trajectory exposes the systemic vulnerabilities in present-day Libya. With increasing sophistication, Libyan leaders leverage their physical might and territorial dominance to facilitate bold transnational endeavors.
These include money laundering schemes, various forms of trafficking, and routine imports of advanced weapons in contravention of international law. Other activities include the opaque funding of infrastructure projects in various sectors, such as telecommunication, construction, and aviation.
Present-day Libya’s warlords hold leverage over banking, hydrocarbons, telecom, electricity, customs, and other critical arenas. They subject almost every sector of the economy to intimidation, undue influence, and the co-option of mid-level officials.
Such contamination affects even ostensibly legitimate institutions, turning substantial portions of the economy into active nodes in predatory networks.
The country’s ruling elites rely on shadowy operatives who help them manage ill-gotten funds, stealing ever-larger volumes of public wealth, laundering it, and reinvesting portions of said profits into strengthening their military capabilities in contravention of international law. This creates a self-reinforcing cycle that benefits the handful of warlords who also function as political leaders.
This investigation, which focuses on Gadalla’s growing role in eastern Libya, documents a broader phenomenon that is not confined to his person or the Benghazi area. Even if Gadalla were held accountable, similar patterns would likely persist due to structural deficiencies in the Libyan system, which require continued vigilance and action to ameliorate.
Although he now presents himself as a legitimate businessman, Gadalla’s portfolio of official activities conceals a broad range of questionable financial operations executed on behalf of the Haftars. Gadalla’s ascent, which has unfolded at the very nexus between Libya’s militia rule and hollowed‑out economic institutions, shows how kleptocratic networks loot Libya’s public wealth on an immense scale.
Gadalla’s frenetic business history spans countless countries and domains of activity, often with dizzying ubiquity. The 46-year-old Benghazi-area native makes no attempt to maintain a low profile.
Before the anti-Qadhafi uprisings, Gadalla studied engineering and earned a master’s degree in the US at Indiana University Southeast. In 2008, he became a resident of Dubai. During the 2011 civil war, he sold automotive and household cleaning products in Libya for a US company.
As eastern Libya began to open up following Qadhafi’s fall, Gadalla utilized his Emirati footprint to expand his cross-border profile, starting with a 2012 trip to the Chinese manufacturing hub of Guangzhou, likely for sourcing.
Today, quite publicly, Gadalla boasts about leading the Alushibe Group, a loose set of private companies he controls in Dubai.76 At the same time, he leads several Benghazi-based companies while also being active in the public sector, serving as chairman of a Libyan state-owned steel company.
Separately, in 2023, Gadalla purchased Benghazi’s Libyan Cement Company, which had become notorious.
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