Tuesday, 27 September 2016
Last updated 11 hours ago
Feb 3 2014 | 3:58pm ET
The Blackstone Group and Och-Ziff Capital Management have become ensnared in the U.S. government's widening probe into alleged bribery at Libya's sovereign wealth fund.
The investigation began as a Securities and Exchange Commission civil probe into Goldman Sachs' relationship with the Libyan Investment Authority, which has sued the bank over losses suffered during the financial crisis. The inquiry has grown into a criminal investigation by the Justice Department into Goldman, Blackstone, Och-Ziff, Credit Suisse, JPMorgan Chase and Société Générale, The Wall Street Journal reports.
At issue is whether any of the firm paid bribes to LIA officials, which is barred by U.S. law. The firms were among those that sought to attract Libyan business around the financial crisis, after the country, long an international pariah, had moved to improve its relations with the U.S. and other western countries. Alleged evidence of wrongdoing emerged following Libya's 2011 revolution, which overthrew longtime military ruler Muammar Gaddafi.
The Justice Department is investigating the role of so-called "fixers" who linked investment firms with members of the Gaddafi regime, acting similarly to placement agents. Prosecutors are working to determine whether those "fixers" passed illegal payments on to Libyan officials.