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US Department of Justice probes investment firms over Libya ties

3 Feb 2014

The US Department of Justice is conducting a criminal investigation into a number of financial services firms, including private equity house Blackstone Group, over potential breaches of anti-bribery laws in dealings with Libya’s state-backed investment fund, the Wall Street Journal has reported.

Other firms under the spotlight include Goldman Sachs, Credit Suisse, JPMorgan Chase & Co, Societe Generale and Och-Ziff Capital Management.

The Libyan Investment Authority (LIA) is reported to have invested as much as $1bn funds managed by these firms, excluding Blackstone, prior to the country’s 2011 civil war, according to an audit conducted in 2010 by KPMG. Blackstone meanwhile was reported to have previously been in discussions about a potential investment, though none was made.

The firms are being investigated for contravening the Foreign Corrupt Practices Act, utilising “fixers” to build contacts with Libyan officials, the report said,

The reports came to light following the death of former head of state Colonel Muammar Gadaffi in 2011, after which its $60bn sovereign wealth fund had its assets frozen and its books thrown open.

In 2008, Blackstone chief executive Stephen Schwarzman joined Carlyle Group head David Rubenstein in attending the wedding of LIA deputy chief Mustafa Zarti.

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