Nations intervening in Libya, those formerly courting Colonel Gadhafi, offered $1.1 billion in aid to Libyan rebels. Rebels asked for $3 billion in aid. LA Times reported:
The rebel council's finance chief, Ali Tarhouni, said outside the meeting that supportive governments have been promising aid since the armed uprising erupted in February, but that "it's been almost four months now and nothing has materialized."
Rebels were able to sell a supertanker's worth of oil via Qatar. Getting access to frozen Libyan Investment Authority funds has been difficult. Of course, that money is invested in private equity underwriter (PEU) offerings or was lost by Goldman Sachs. Citi treats its PEU investments as Level 3 assets, i.e. virtually untradeable.
America returned to the "enemy of my enemy is my friend," given al Qaeda's longstanding role in the Libyan resistance. The U.S. supported Gadhafi's efforts to kick al Qaeda out of Libya. It now supports the opposite policy, known as a flip flop (Red) or pivot (Blue) , depending on perspective.
I can't imagine a bank loaning money to al Qaeda infiltrated rebels holding PEU rights. Rebel money is tied to oil. Until it flows, rebels must rely on their sponsors' pocketbook. How will America's sponsoring of extremist rebels blow back in future years? It remains to be seen.
Update 8-25-11: The U.S. will release $1.5 billion in seized Libyan assets to "relevant authorities."
Update 8-19-14: The Libyan Investment Authority's lawsuit against Goldman Sachs in a London Court will get a case hearing in October.
