The Libya investment firm and the release of the Lockerbie bomber

[This is the headline over a report on the Telegraph website. The following are excerpts.]

The terraced house just around the corner from the American embassy in London looks like most in the affluent street. Tall and elegant, only the shiny brass plaque gives a clue to what lies beyond the black front door.

The name reads Dalia Advisory Limited, a company established by Libyan businessmen just a week after the country's officials were told the Lockerbie bomber Abdelbaset al-Megrahi was being considered for release on compassionate grounds.

Dalia Advisory is in fact a "front" for the Libyan Investment Authority (LIA), a sovereign wealth fund with £80 billion, to invest in Britain and beyond. The Georgian town house, bought for £6 million, is, ironically, only a few yards from the US Embassy in Grosvenor Square.

Senior business sources have told The Sunday Telegraph that had Megrahi died in a British jail, the LIA would have taken its vast sums elsewhere. "If Megrahi had perished in Scotland, we would have become a pariah state as far as the Libyans were concerned," said one source.

Oliver Miles, a former ambassador to Libya and now deputy chairman of the Libyan British Business Council, said: "At the time of his release everyone knew that if he died in a Scottish jail, it would be bad for our relations." (...)

However long Megrahi now survives, the fact is business between Britain and Libya is currently booming. British exports to Libya are now double what they were a year ago while imports from Libya have risen three fold. In the first two months of this year alone, the UK exported £110 million of goods and services.

In Washington this week, the timing of the establishment of Dalia, run by an associate of Libyan leader Colonel Muammar Gaddafi's favourite son Saif, will come under the scrutiny of the powerful Senate Foreign Relations Committee at a wide-ranging hearing into the release.

Angry US politicians and victims' families are convinced that Megrahi – convicted of the murder of 270 people, 189 of them Americans, when Pan Am flight 103 was blown up over Lockerbie in Dec 1988 – was allowed home to ease oil and business deals between Libya and Britain.

There is particular focus on the role of BP, already on America's most hated list because of the Gulf of Mexico oil spill. In the US, the company is prime suspect in masterminding the release – although the British and Scottish governments and BP have all denied this.

And US-British relations are heading for a fresh crisis over the Megrahi affair as it appears that none of the five invited British witnesses will attend Thursday's hearing. (...)

BP is to expected to send a senior executive but not the two men requested by senators – Tony Hayward, the beleaguered chief executive who may be about to leave the company, and Sir Mark Allen, the former MI6 agent who acted as a go-between for British and Libyan authorities. (...)

Speaking in a personal capacity, Mr Miles believes the American senators are conducting a "kangaroo court". He said: "They have already decided BP are guilty but they haven't got any evidence to say that." (...)

American anger is only compounded by the tone from Tripoli. Megrahi's wife Aisha, a schoolteacher, said: "Abdelbaset was a political prisoner who paid with ten years of his life to support his country. Libyans are perfectly right to celebrate his return to his family." And his eldest brother Mohammed added: "The public response is not a political one, but a show of support for someone who is much loved." (...)

Dalia was incorporated, according to Companies House records, on July 14 last year. A week earlier, at a meeting between Scottish and Libyan officials, Mr MacAskill first discussed the possibility of Megrahi being released on compassionate grounds rather than under PTA. [Note by RB: This wording gives the impression that, out of the blue, Kenny MacAskill raised the possibility of compassionate release with Libyan officials. This is arrant nonsense. The compassionate release option had been discussed in the media and was familiar to Libyan officials long before their meeting with Mr MacAskill.] BP's lobbying for the PTA – which was holding up ratification of a Libyan oil exploration deal – is at the centre of the US senate hearing next week.