Was Gadhafi the richest man in the world?
The Libyan leader had reportedly hidden away $200 billion before he died -- more than Bill Gates, Warren Buffett and Carlos Slim combined. If he had it, was it really his?
By Edwin Durgy for Forbes.com
The Los Angeles Times reported over the weekend that deceased Libyan dictator Moammar Gadhafi had “secretly salted away more than $200 billion in bank accounts, real estate and corporate investments around the world before he was killed.” The story was repeated around the world, with various news sites reporting that Gadhafi died richer than the three richest people on the planet -- Carlos Slim, Bill Gates and Warren Buffett -- combined.
That is an incredible amount of money and would have made Gadhafi not only richer than today’s richest but also one of the wealthiest individuals in the history of the world, significantly wealthier than every great American who has ever lived, save the legendary industrialists Andrew Carnegie and John D. Rockefeller.
So was Gadhafi a $200 billion man, and if so, why wasn't he ranked among the world's richest?
To answer the latter question first, Forbes has long separated rulers and dictators from our annual rankings of the world’s billionaires, distinguishing between personal, entrepreneurial wealth and wealth derived largely from positions of power, where lines often blur between what is owned by the country and what is owned by the individual. That is why rulers such as the King of Thailand, the Sultan of Brunei and Dubai’s Sheikh Mohammed Bin Rashid Al Maktoum are not listed among the world’s billionaires, though we have estimated that each controls an 11-figure fortune.
- Related: The worlds' billionaires, 2011
The same principle would apply to Gadhafi, who took advantage of his station and literally lived like a king off of the backs of his people. Indeed, the vast majority of the $200 billion figure ascribed to him by the LA Times was apparently held in accounts owned by the government of Libya, the country Gadhafi ruled brutally for 42 years. Reportedly parked in everything from checking accounts to private companies and real estate investment trusts, the money was legally owned by entities such as the Central Bank of Libya and the Libyan Investment Authority, Libya’s sovereign wealth fund.
As such, while agencies of Gadhafi’s regime administered the funds in question, the vast majority of those assets were never owned directly by Gadhafi or members of his family. Just as governments from Australia to South Korea maintain sovereign wealth funds, so too did Libya under Gadhafi, established for the purpose of diversifying the profits flowing from Libya’s state-controlled oil producers.
Frozen funds around the world
As Gadhafi’s grip on power weakened, some of this so-called “personal fortune” was frozen by various governments, including the United States, to prevent Gadhafi from making a desperate grab for the cash. On Feb. 28, 2011, Acting Under Secretary for Terrorism and Financial Intelligence David Cohen informed reporters that over $30 billion of Libyan assets held by American financial institutions had been frozen by an executive order issued by President Barack Obama, a move Cohen called “the largest blocking under any sanctions program ever.”
Cohen specifically cited “safeguarding [the assets] for the Libyan people” as the rationale behind the action, making explicit to whom the assets belonged in the eyes of the United States government. European Union member states later followed suit, reportedly locking down at least another $30 billion of Libyan investments across the continent and establishing a consensus of sorts that the billions invested by the Libyan government abroad were not the personal property of Gadhafi.
The sticky point is that Gadhafi abused his position of power for decades and clearly used funds for personal gain – not for the country’s benefit. He might have also seized some funds outright, but so far that has not been proven either by Forbes or in the Los Angeles Times article.
What is known for certain is that Gadhafi squeezed all he could out of the Libyan people to support his lavish lifestyle. And had he wanted to pillage Libya’s treasury directly, the cash was certainly there for his taking. The $45.9 billion collected by the Libyan government last year in tax revenue is equal to 61.8% of the country’s $74.2 billion GDP, the 10th highest ratio in the world.
Instead, Gadhafi appeared content to use Libyan investment accounts as personal trust funds, and stopped short of seizing the principal. So unless there exists some massive stockpile of U.S. dollars and Krugerrands perhaps buried deep beneath the Sahara desert, quietly siphoned from Libya’s coffers over the past several decades, Gadhafi was never the richest man in the world.
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