The Truth About Cars » Gaddafi http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 12 Apr 2014 00:28:39 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Gaddafi http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Gaddafi’s Fiat Stake To Be Unfrozen http://www.thetruthaboutcars.com/2012/11/gaddafis-fiat-stake-to-be-unfrozen/ http://www.thetruthaboutcars.com/2012/11/gaddafis-fiat-stake-to-be-unfrozen/#comments Tue, 13 Nov 2012 13:04:21 +0000 http://www.thetruthaboutcars.com/?p=466741

Last year, our esteemed Ed in Chief Niedermeyer did intensive research into what was left of then Libyan ruler Muammar Gaddafi’s share holdings in Fiat. Fiat denied that the Colonel had any financial interest in Fiat, but he did. The holdings were seized by the Italian government.

With Gaddafi long gone, Italian magistrates asked a court on Tuesday to free the funds. As it turned out, Libya held 0.33 percent of Fiat, 0.33 percent of Fiat Industrial, along with 1.5 percent of Turin’s soccer club Juventus.

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Italy Seizes Gaddafi’s Stake In Fiat http://www.thetruthaboutcars.com/2012/03/italy-seizes-gaddafis-stake-in-fiat/ http://www.thetruthaboutcars.com/2012/03/italy-seizes-gaddafis-stake-in-fiat/#comments Wed, 28 Mar 2012 22:51:44 +0000 http://www.thetruthaboutcars.com/?p=436968

A year ago nearly to the day, I was investigating the connection between Libyan dictator Muammar Gaddafi and Fiat. With an American-led intervention in Libya underway, Reuters had reported that a Wikileaked State Department document revealed that the Libyan Government owned a two-percent stake in the automaker Fiat as recently as 2006. When I contacted Fiat’s international media relations department for comment, I received this response:

Dear Mr Niedermeyer,

Further to your email, I would mention that the Reuters report you refer to is incorrect. As too are other similar mentions that have appeared recently in the media concerning the LIA’s holdings in Fiat.

The LIA sold all of its 14% shareholding in Fiat SpA in 1986 – ten years after its initial stake was bought.  It no longer has a stake in Fiat SpA.

I trust that this clarifies the matter.

It didn’t, actually. In fact the matter remained as clear as mud to me until just now, when I saw Reuters’ report that Italian police have seized $1.46 billion worth of Gaddafi assets, including “stakes in… carmaker Fiat,” under orders from the International Criminal Court.

So, did Fiat lie? Not exactly. The Libya Arab Foreign Bank did sell back its shares in 1986, but the Wikileaked memo claimed that a successor entity, the Libyan Arab Foreign Investment Company, was the more recent Libyan investor. Not being well-versed in the structure and history of Libya’s sanction-avoiding foreign investment shell companies, and lacking the resources to effectively pursue the story (tracking Gaddafi-era investments is a chore), I left it there. And even now that Italian police confirm that a Gaddafi-controlled stake in Fiat has been seized, it’s not at all clear whether Fiat’s management was aware of this.

The AGI has the most detailed account, reporting

The Guardia di Finanza Corps of Rome has seized property worth more than 1.1 bln euro from members of the Ghaddafi family upon a warrant of the International Criminal Court of The Hague. The property seized includes real estate, company shares and bank accounts that belong to members of the Ghaddafi family or to people of Ghaddafi’s entourage with an overall value of more than 1.1 bln euro

Property investigations carried out by the GdF of Via dell’Olmata, in Rome have enabled to discover two financing companies through which leaders of the former Libyan regime had made investments in Italy. [emphasis added]

That covers Fiat management fairly well: at the very least, it appears that they didn’t know about Libyan investment until police were involved. I might suspect that this very Gaddafi stake in Fiat was frozen by Italian authorities prior to my request for comment, and Fiat’s representative misled me about it… but I have no way of proving it. Time will (hopefully) tell.

Meanwhile, on this side of the pond, it’s only a little strange that this wasn’t somehow brought to light in pre-bailout vetting of Fiat. Sure, a foreign enemy of the United States was a significant shareholder in the firm that was handed a bailed-out Chrysler for no cash down. On the other hand, Libya was not on the War On Terror radar at the time, and the auto task force had enough to worry about without investigating Fiat’s shareholders. All the same, chalk this up as yet another example of the unintended consequences of government intervention in the economy.

Finally, there’s the real question: did Gaddafi actually benefit from his Fiat investment? It all depends on when this second investment in Fiat shares took place. The Wikileaked memo says Libya owned two percent of Fiat as of 2006, which means it was enjoying the short-lived Marchionne boom (financed in part by General Motors) after years of decline and stagnation. And when things headed south in 2008, snagging Chrysler for nothing sent Fiat stock on its last real bounce… which means the Gaddafi regime did benefit to some extent from the auto bailout. Still, with Fiat’s shares pricing at all-time lows the Libyan dictator almost certainly lost money on his Fiat investment over the years. Unless the Guardia di Finanza find evidence that Fiat’s management knew about Libyan investment, this might well be a case of “no harm no foul.”

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The Mystery Of The Fiat-Gaddafi Connection http://www.thetruthaboutcars.com/2011/03/the-mystery-of-the-fiat-gaddafi-connection/ http://www.thetruthaboutcars.com/2011/03/the-mystery-of-the-fiat-gaddafi-connection/#comments Wed, 30 Mar 2011 17:40:35 +0000 http://www.thetruthaboutcars.com/?p=389096

Back in 1976, the Italian automaker Fiat had been badly battered by a global energy crisis and the resulting malaise infecting the global auto industry. In what Time Magazine described at the time as “a devastatingly ironic example of petropower,” Col. Muammar Gaddafi instructed his Libyan Arab Foreign Bank to invest some $415m into the Italian automaker, giving it a stake that would eventually grow to some 14 percent of the firm’s equity.

By 1986, Fiat’s Libyan stakeholders were becoming more trouble than they were worth. In the wake of the Lockerbie bombings, the US introduced sanctions on Libya, and Fiat’s Libyan connection left its attempts to bid for US military contracts (particularly those related to Ronald Reagan’s Strategic Defense Initiative) dead on arrival. As a result, Fiat and its shareholders bought back the entire 14 percent Libyan stake in the firm, presenting the Libyan Arab Foreign Bank-controlled Banca UBAE with a $3.1b check. And, according to what a Fiat spokesperson told us yesterday, that is where the story ends. But thanks to the now-ubiquitous Wikileaks, we have found that this story may in fact go farther than that. In fact, as the evidence stands right now, either the US State Department is working with bad information (which major news sources have yet to correct), or Fiat is lying about its ties to the embattled Gaddafi regime.

As with so many of the best stories in recent months, the major point of factual conflict in this tale comes from a Wikileaks-sourced US State Department memo. The memo, which does not appear at cablesearch.org, was provided to Reuters by an unnamed third party and was cited in a Reuters piece that focused on Gaddafi’s ownership of Wyndham Hotels. The Fiat connection isn’t made clear until well towards the bottom of the story, when Reuters reports

A 2006 U.S. State Department cable obtained by WikiLeaks and made available to Reuters by a third party describes LFICO/LAFICO [the Libyan Arab Foreign Investment Company]as Libya’s largest government-owned investment company, operating under the auspices of something called the “General People’s Committee” which has served as the Gaddafi government’s Ministry of Trade and Economy…

The State Department cable said that, as of 2006, LFICO’s holdings in Italy included 2 percent of Fiat, 15 percent of the Tamoil energy company, and 7.5 percent of Juventus, where a soccer-playing Gaddafi son, Saadi, once sat on the board. The cable said LFICO also had over $500 million worth of investments in Britain.

If the Gaddafi-controled LAFICO/LFICO held two percent of Fiat as recently as 2006, then the public narrative that had Fiat completely buying out its Libyan backers in 1986 is not completely accurate. In hopes of reconciling the discrepancy between the leaked memo (which presumably reflects the conclusions of the US intelligence community) and the public rejection of Libya’s equity stake in Fiat, we reached out to Fiat’s international media relations staff requesting clarification. The response, from Fiat’s Richard Gadeselli, came as follows:

Dear Mr Niedermeyer,
Further to your email, I would mention that the Reuters report you refer to is incorrect. As too are other similar mentions that have appeared recently in the media concerning the LIA’s holdings in Fiat.
The LIA sold all of its 14% shareholding in Fiat SpA in 1986 – ten years after its initial stake was bought.  It no longer has a stake in Fiat SpA.
I trust that this clarifies the matter.
Unfortunately, it doesn’t clarify the matter at all. Either Mr Gadeselli isn’t telling us the whole story (which could be the case for any number of reasons, not all of the nefarious), or the Wikileaks memo cited by Reuters is incorrect, a possibility that is equally likely for a number of reasons. For one thing, we haven’t seen the leaked memo itself, and so we can not verify the exact source of the intelligence reported by Reuters. And even if we could verify that the US State Department and intelligence community had reason to believe that Gaddafi-backed investment funds continued to hold a stake in  Fiat as recently as 2006, it’s conceivable that the US government had experienced a failure of intelligence. As a 2001 piece by businesstoday.com reports, Gaddafi’s own money manager Ali El Huwej has admitted that Libya uses a number of techniques to invest in Europe despite US sanctions.
Banca di Roma didn’t violate economic sanctions, because the stake was sold through Libyan companies rather than the Libyan government, Mr Brambilla said.
Though they were sporadically enforced, the sanctions nevertheless limited Libya’s room for manoeuvring in some countries. For example, Libya’s UK bank accounts were frozen and funds such as dividends from the Metropole stake could not be transferred to Libya.
That is why Lafico works to avoid detection when it makes investments, Mr Huwej says, adding that in everything it does, Lafico is aware the US is watching.
As such Mr Huwej sometimes avoids doing business under Lafico’s name. A farming company in Egypt owned by Lafico is registered there as simply Agriculture Investment Co., he says. 

Another strategy employed by Libya is to keep stakes small or indirect, particularly in banking companies. Though bank investments are a small slice of Libya’s holdings, they’re among the most scrutinised by the authorities, as access to banks means access to money and the ability to move it around the world.

In any case, either Fiat isn’t telling the truth or the US Government was misinformed about Libyan ownership of a firm that is poised to take over the bailed-out US automaker Chrysler. In the interests of truth, we call on Fiat and Reuters to help resolve this factual discrepancy. If anyone knows where to find the Wikileaks memo in question or has any information regarding this story, we encourage them to send it to our contact form.
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