Libya's Bankers: Treasury Protected From Plunder Libya's new leaders are still trying to account for all the money that was under the control of ousted leader Moammar Gadhafi. It seems much of that wealth remains frozen in foreign accounts, and Libyan bankers say billions in gold and cash are still under being held by the central bank.
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Libya's Bankers: Treasury Protected From Plunder

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Libya's Bankers: Treasury Protected From Plunder

Libya's Bankers: Treasury Protected From Plunder

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To Libya now, where there have been grave concerns over money that ousted leader Moammar Gadhafi allegedly looted from the treasury. But a lot of wealth is now frozen in foreign accounts and, as NPR's Corey Flintoff reports, billions of dollars in gold and cash that were in Libya's central bank are still there thanks to some very stubborn and creative bankers.

COREY FLINTOFF: The big question is where is the money? Many people assume that Gadhafi, his family members and top associates, took a lot with them as they retreated into a few remaining strongholds, either to continue the fight or to ease their exile in friendly countries.

The speculation ran amok with recent reports that a convoy of more than 200 Libyan military vehicles had crossed the border into neighboring Niger. For a brief time, there was talk of desperate men barreling across the Sahara Desert guarding a dictator's ransom in cash and gold. That cinematic vision fizzled, though, when the government of Niger announced that only a few vehicles had entered the country, mostly with lower-level military men and officials who are now being held under house arrest.

Instead, the new head of Libya's central bank, Gassem Azzuz, said the government's assets remained in its vaults, despite pressure from Gadhafi loyalists who tried to get their hands on it as the rebels moved closer to Tripoli. He spoke through a translator.

GASSEM AZZUZ: (Through Translator) The banking sector has done quite well and is doing quite well and is stable and sound, through the great efforts of people working in the Central Bank of Libya and the various banks.

FLINTOFF: Azzuz told reporters that the Gadhafi regime had sold off about 20 percent of Libya's gold reserves, around 29 tons, in a last-ditch measure to pay the salaries of soldiers and government workers. But he said the bankers don't believe that money was stolen.

Arif Alee Nayad, who's part of the Transitional National Council stabilization team, says Gadhafi supporters did put heavy pressure on the central bankers to release gold and cash for more dubious reasons. He says the bank employees put up all sorts of resistance.

ARIF ALEE NAYAD: From not showing up, to actually delaying processes, to pretending not to have the keys, to pretending not to have the passports, in order to block transactions that were detrimental to the Libyan people.

FLINTOFF: The Libyan government's wealth overseas was frozen by international sanctions aimed at the Gadhafi regime, and that money is slowly beginning to trickle back into the country.

Mazin Ramadan is the director of the Temporary Financial Mechanism, a group set up to see that assets coming back to Libya are wisely spent during the transition to an elected government. Just now, his group is coping with how to spend about $400 million in Libyan government money that was unfrozen by the United States. That money comes with strings attached.

Ramadan says it must be spent on United Nations humanitarian programs to help Libyans recover from the war.

MAZIN RAMADAN: With the U.N., it's always two things, from the Iraqi experience in the Oil For Food Program, corruption that's always a question mark. And the other part is the overhead. Seems like the U.N. can't do anything without really large overhead.

FLINTOFF: Ramadan says he's negotiating with U.N. officials to assure that the money is really spent where the Libyans think it's most needed. As to the billions of dollars worth of Libyan assets that are still frozen abroad, Ramadan thinks it could be years before that money is available. He points out that money frozen during the regime of Philippine President Ferdinand Marcos is tied up in litigation, 25 years after that strongman was ousted.

Meanwhile, there's still speculation that a significant amount of money from the Gadhafi regime was squirreled away where his cronies could get their hands on it.

Again, Arif Alee Nayad.

ALEE NAYAD: As a matter of fact, they had vast wealth that didn't enter the banking system in the first place.

FLINTOFF: And where that wealth is now is anyone's guess.

Corey Flintoff, NPR News, Tripoli.

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