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In 2009, the top aides to Libya's then leader, the late Col. Muammar e-Qaddafi, held a meeting with 15 executives from global energy companies that had oil operations in Libya. The United States had reopened trade with Libya in 2004 after nearly a decade-long boycott because the Libyan government played a role in the explosion of Pan Am Flight 103 at 34,000 feet over Scotland caused by a bomb onboard the plane. At the meeting of these executives, the Qaddafi aides asked them to ante up the $1.5 billion Libya was being asked to pay for the compensation of the Pan Am 103 victims' families. The aides referred to the payments as "signing bonuses" or "consultancy fees" for their companies being permitted to continue oil operations in Libya.
A State Department 2009 cable contained the following warning for U.S. companies: "Libya is a kleptocracy in which the regime—either the al-Qadhafi [sic] family itself or its close political allies—has a direct stake in anything worth buying, selling, or owning." Some of the U.S. companies paid into the $1.5 billion fund; some did not.
Did those who paid violate the FCPA? What strategic issues do you see in the State Department's warning?
Source: Eric Lichtblau, David Rohde, and James Risen, "Business Payoffs Helped Qaddafis Solidify Control," New York Times, March 24, 2011, p. A1.
(Analysis appears at the end of the chapter.)