Libya handed $1.3 billion in Goldman Sachs in 2008 for a range of investments—but as the financial crisis took hold, the money lost 98% of its value, a Wall Street Journal investigation finds. Goldman made a deal with Moammar Gadhafi’s sovereign-wealth fund as it sought “to join the major leagues” in investment banking, says a former Treasury official. Libya’s $1.3 billion went to options on currencies and stocks in Citigroup, Italy’s UniCredit, Banco Santander, and more.
But those options were hammered by the financial crisis, and by February 2010 were valued at just $25.1 million. A top Libyan fund official was “like a raging bull” at a meeting with Goldman as he threatened its workers; the fund’s chiefs felt they’d been swindled. Goldman’s employees needed a security escort before they left the country. Goldman attempted several deals to help get the money back, including making Libya a major shareholder in the firm, but none were ultimately agreed upon. Click through for more on Libya and Goldman Sachs. (Read more Libya stories.)