Gaddafi may escape with central bank gold, says ex-Libyan governor

A former governor of the Central Bank of Libya on Thursday warned that deposed dictator colonel Muammar Gaddafi may have run off with large portions of the country’s gold reserves and could sell the bullion to incite chaos.

In an interview with Corriere della Sera, an Italian daily, Farhat Bengdara, a governor of the Central Bank of Libya from 2006 to 2011, said Gaddafi could have taken up to $10 billion of gold reserves from the central bank in Tripoli and that the Libyan leader even attempted to sell the gold as “bribes” to “spread chaos” in the country.

“Not long ago, a non-Libyan friend of mind told me he had been contacted by one of Gaddafi’s closest staff members with an offer to sell 25 tonnes of gold. My friend reported it to me, I recommended refusing, and my friend rejected the offer. But it is a clear sign,” Bengdara said.

Bengdara, who is now a director of Italian bank UniCredit, stepped down as governor on March 11 and left for Turkey after defecting to the rebel forces.

Latest estimates from the International Monetary Fund, shows the Libyan central bank holds more than 143.8 tonnes of gold, which at current prices is valued at $8 billion. Libya is one of only a handful of countries to hold its gold reserves in its country, with most central banks preferring to store their bullion at vaults in New York, London and Switzerland.

Gaddafi is now reported to have fled from the Libyan capital as rebel forces advanced into large parts of the city, taking over key strategic locations. A two million dinar ($1.67 million) bounty has been issued by Libya’s National Transitional Council for anyone who captures Gaddafi – dead or alive.

However, Bengdara said the immediate priority was to begin reconstruction of the country. “We need bridge loans totalling $5–7 billion to get the banking system up and running again, to pay people’s wages so they can return to work, and we have to cover the cost of imports, which account for 80% of the country’s spending,” Bengdara said.

He said the UN Security Council would first have to pass a resolution to unfreeze Libyan assets abroad. The council is preparing to vote this week on a resolution that would release $1.5 billion in Libyan assets in US banks. On Thursday, Italian prime minister Silvio Berlusconi said Italy was prepared to release €350 million ($505 million) of Libyan assets, the first tranche of assets frozen in Italian banks.