Using academics to locate missing or looted monies from current or post conflict zones makes sense – for part of the problem – namely forensic accounting, unravelling complex financial structures and corporate cloaking mechanisms like trusts and offshore havens. However giving the same academics the responsibility for actioning the recovery strategy informed by this analysis is flawed. They do not possess the dealmaking, “street smarts”, mediation, negotiation, fixer, logistical, operational or in-country savvy to succeed on the ground.
Abdalla Kablan is a case in point. He was chosen to head Libya’s billion-dollar hunt for sovereign wealth hidden around the world by Gaddafi. Kablan is a 30 year old computational finance expert with a PhD degree in Computational Finance from University of Essex, an MSc in Financial Engineering and Knowledge Management from the University of Bradford, UK, and a BSc in Computer Systems Engineering from the University of Malta, based in Malta. He was asked by Ali Zeidan (Libyan PM 2012-2014) to lead an official, government campaign to track down and recover billions in cash stashed away through vehicles like the Libyan Investment Authority.
He decided that a central, government-mandated authority had to deal with government authorities and financial institutions. Kablan gave a presentation of how a central authority could employ computer science and quantitative mathematics to track down financial investments and the life cycle of capital. In Kablan, the Libyans had a desk based expert who could handle the computational forensics, data mining, and asset identification.
He became part of the newly formed Tracing & Asset-Recovery Support Bureau (TARSB). His plan was to establish links with international organisations, Interpol, and the UN-World Bank’s Stolen Asset Recovery Initiative (StAR). StAR’s most important role is fostering ties between countries seeking looted money and those sitting on it. There were similar models that could be examined, Great Britain had formed task forces to work with Egypt and the United States’ Department of Justice had the Asset Forfeiture and Money Laundering Section already provided legal and policy assistance to foreign governments.
Kablan also proposed to link up with Libya’s own institutions, Private Banks, the Central Bank, and the Libyan investment entities, to be able to check data, transfers and investments. TARSB started data mining online resources, using artificial intelligence and heuristics to profile unstructured data for clues.
Progress was glacial. Kablan says he was frustrated by the inability to actually turn the TARSB into a central authority. Malta was ready to transfer €100 million in Libyan funds but they had concerns about the source of the request to re-patriate the monies. According to Kablan, Malta was keeping the Libyan people’s interests at heart by not just “dishing it out to anyone.” Bloomberg then alleged that Malta was being reticent in giving the money back in an “exposé” on Libya’s asset recovery efforts that made serious allegations about Kablan and Malta.
In ‘How Libya Blew Billions and Its Best Chance at Democracy’, Bloomberg claimed Gaddafi’s son Mutassim had €100 million in Maltese accounts, and suggested that the country was being difficult in letting the cash go. It then alleged that Kablan was only picked by Zeidan for being the son-in-law of foreign minister Mohammed Abdelaziz – but Kablan is not even married, nor is he dating Abdelaziz’s daughter. The article also alleged that he had worked for Exante, a finance firm in Malta that also acts as a broker for Bitcoin, “the virtual currency favored by drug dealers and money launderers.”
Zeidan wanted to appoint an independent person of integrity with proven technical competence to help Libya recover its money. When Zeidan set up the TARSB in August 2013 to hunt down the assets held by Libya’s sovereign funds, such as the Libyan Investment Authority (LIA) and LAFICO, cooperation was already underway with Interpol, the World Bank, France and Britain, and the United States’ attorney general. Eventually the TARSB was besieged by internal politics: the LIA was intent on recovering the hidden assets itself, while another unit called the Asset Recovery Committee (ARC) appointed by former prime minister Abdul Rahim Al Keeb, sought the sole mandate to recover assets.
Eventually, Kablan was the victim of an abduction attempt in Tripoli. He received threats, was unable to move freely, was poorly equipped to deal with the hostile realities of the “street” as he took the desk based research out into the world to initiate the recovery plan informed by the academic research. He resigned his post, left Libya and will not return.
Kablan was unable to take the academic theory and put it into practice. He and his team lacked the core skills to action their plan and manage personal and organizational risk while doing so. He was a soft target and those that did not want his work to continue did not need to exert much pressure, relatively speaking, to prompt him to abandon his mission.
In Kablan and the TARSB, Libya possessed one part of a two part solution – the toothless part. Firms like TMG Corporate Services who can probe the clues and implement the strategy developed by academics like Kablan and his team are the hard edge that Libya did not possess in this spectacularly unsuccessful effort to identify and repatriate stolen assets.