At some point during the fighting in Libya a few years ago, Nato planes attacked pro-Gaddafi forces near an oilfield in the north-east. A number of smart bombs hit a storage facility belonging to the oil company for which I worked. The facility contained thousands of barrels of chemicals, worth millions of dollars, which are used in the process of drilling for oil. Most of the barrels were destroyed outright but a good number remained intact. Exposed to the extreme heat of the explosion and subsequent fires, the chemicals inside the surviving barrels were altered permanently. At around the same time, as the fighting in and around the field intensified, Libyan employees of my company (the expats having cut and run a long time ago) worked frantically to move high explosives and detonators used in the oil extraction process to a safe location so that none of the various factions involved in the conflict could get their hands on them. For some reason, the employees made the decision to leave the live explosives in the bunker and take the detonators – the piece of kit they judged most useful to any would-be bombers. In their haste, they left the bunker compound gates open and the door to the bunker unlocked.
Since the attack on Gaddafi and its aftermath, the Libyans working for my company had got used to having to act on their own initiative, often in danger and under extreme pressure as the fighting took hold of the country. But then, during a lull in hostilities, the employees responsible for dealing with the chemicals and explosives decided it was time to update HQ on what had happened. They also had a more serious problem on their hands. As well as using chemicals and explosives, oil companies deploy radioactive materials in their quest for oil. Nuclear probes are inserted into potential wells in order to determine whether they are suitable candidates for further exploration. These probes also happen to be the perfect size to use as the core of a dirty bomb. As a consequence, in all jurisdictions in which they are used they are heavily regulated. But in Libya there was no longer any regulation. My company’s store of nuclear materials was kept in a bunker designed to withstand the force of a massive explosion and was normally heavily protected by specially trained troops. Now the bunker lay completely unguarded. It seemed that the warring factions hadn’t yet discovered its existence but the employees believed that it was only a matter of time before this bunker, too, was overrun and plundered. What should they do to make the materials safe? Should they try and smuggle them out of the country? Should they keep them in the bunker and pour concrete over them? As the compliance lawyer with responsibility for the region, I was invited to join a conference call to discuss these questions, along with the operations manager for the oilfield and the regional head of security, an ex-special forces officer on secondment to London from US HQ.
Also on the call was the new country manager for Libya. While operations managers – the people who deal with the practicalities of getting the oil out of the ground – work out in the field, the country manager sits in the city, near the seat of decision-making power over the award of contracts. In companies like mine, country managers are powerful people, as much imperial proconsul or colonial governor as businessman. They can run the business in their countries as they wish. The only thing that matters is that they return a profit. The country manager for Libya was a company high-flier, who was sent in to Tripoli as soon as Gaddafi had fallen in the expectation of rich pickings, and who now spent his days shuttling from one hotel to another in fear of assassination. It was clear that he hadn’t had any involvement in the matters under discussion and he remained silent as the rest of us trawled through possible solutions to the various problems.
Sitting in a bland conference room in London, listening to disembodied voices relaying facts over the phone, it felt as though we were participating in some crisis simulation exercise. Almost casually, we came to some conclusions: the barrels of chemicals could stay where they were. Nothing could be done with the remaining stock. There was nothing we could do about the explosives either. In the fog of war, people make strange decisions and at least the detonators had been removed and were under company control. It was the best we could hope for. We decided that the risks of smuggling the nuclear materials out of the country and into Egypt were too great and that the employees should bury them somewhere in the Libyan desert.
Then, as the call drew to an end, the country manager spoke up. ‘I want to talk about something,’ he said. ‘I want to talk about the theft of company property.’ He was angry. One of the employees had taken advantage of the chaotic conditions to steal a number of company trucks. ‘And now that it is more stable over here,’ the country manager continued, ‘he’s holding the trucks to ransom. He’s refusing to give them back. His tribe wants money for them. They might attack our base.’ He told us that he had personally been out into the desert to bargain with the employee and his tribe. Negotiations were ongoing, but he insisted he was going to solve the problem. ‘I call the ball,’ he said. He was convinced that this misconduct was only the tip of the iceberg. ‘I want you to come and see what is going on here,’ he told me. ‘I want you to come and look into matters. They need it.’ After the call, he made an official request for a compliance audit – a review of the fraud and corruption risk in a country – for Libya, and coming from a well-connected hi-pot, his request went to the top of the organisation. The company, worried that it might be losing more money than it should be, in a market so bad that the smallest profit would be considered a miracle, agreed with him and sent me to Libya.
I flew into Tripoli in the first week of Ramadan. As I walked through the baggage collection hall looking for my luggage, the first thing I noticed were the groups of sub-Saharan Africans being shepherded through the airport by North African minders. After an hour of searching, it became clear that my luggage wasn’t going to turn up, so I made my way to arrivals, where I was collected by a driver and a security contractor employed by our company – a former NCO in a Scottish infantry regiment who served in Iraq and Afghanistan before becoming a corporate mercenary. He was hired to act as a bodyguard for expats but his only remaining client, he told me, was the country manager. ‘But now he never leaves his hotel room when he’s here and spends as much time out of the country as he can.’
We drove to the contractor’s quarters, a small, dusty lock-up in the suburbs. Sitting outside at a camping table, he gave me a neat PowerPoint presentation on his laptop about the security situation in Libya. ‘Frankly speaking,’ he said, ‘it’s a bit shit.’ Libya was dangerous. Tripoli was dangerous – not as dangerous as Benghazi but still dangerous. Random, lethal violence was to be expected. There were no police officers, no official law enforcement of any kind – only tribal militia, who ruled the roost. He told me to be careful of ambushes while being driven around the city.
‘What should I do if I get ambushed?’ I asked.
‘Well, standard operating procedure in the army is to shoot your way out. Don’t be static. Push on, fight back.’ I pointed out to him that I was an unarmed middle-aged lawyer who would be sitting in the back of a rickety saloon car when the moment came. He shrugged. ‘As I say, it’s a bit shit.’
After the briefing, we went on to my hotel, which is used by diplomats, journalists and those on (mostly oil-related) business. At one end of the driveway that swept past the hotel entrance, there was a traffic barrier operated by armed guards. No such obstacle existed at the other end. Men in various degrees of military dress stood outside the entrance, smoking or talking together in the lobby. I was greeted by the receptionist, who spoke in a broad Dublin accent. He (and his identical twin, also on duty at reception) was a young Irishman with a Libyan father who had decided to come and experience the free Libya and was now wishing he hadn’t. Then I headed for my company’s office. The car that took me there, like most of the others in Tripoli, had small cubes of sponge stuck to its doors to prevent bumps while driving on roads that were no longer policed and where traffic rules were now purely a matter of convention rather than enforceable norms. As we drove along the Corniche, the deep blue of the Mediterranean on one side, I noticed that most of the old traffic rules were still being obeyed. In an environment in which robbery, kidnap and death were commonplace, people still seemed to want to give way at roundabouts.
My company’s offices were in one of a cluster of tall tower blocks overlooking the sea, a once prestigious address. The tower blocks were set in a deserted concrete courtyard. The entrance lobby’s cool, airy silence was a contrast to the intense heat and white light of the afternoon outside. I took the lift up and was let into the office, where I was shown into an empty room with a desk. I spoke with the first of the people who had been asked to come for interview. As with every compliance audit, on my list of interviewees were those exposed to higher than usual risk of corruption – including members of the sales team, anyone in a leadership role, and anyone who had contact with government or public officials. I also talked to those who were in a position to prevent corruption or spot it if it occurred, such as members of the finance department or human resources. Some of the employees had made great efforts to attend. One of the sales directors had come from Benghazi, and the various operations managers – those who were in charge of actually drilling for oil in the field – had travelled in from their desert bases and rigs.
At first, the interviews followed a script in which I asked a list of set questions relevant to the interviewee’s role. But soon, picking up on a remark or an answer, I would take the opportunity to broaden the conversation. Formality would dissipate and people would start to talk more generally about the company and the wider environment in which they lived and worked. Some common themes emerged. No matter whether they were for or against Gaddafi (and it soon became apparent which side someone was on), most people thought that having him back would be better than the current situation. There were shootings and kidnappings. House break-ins were rife and everyone had a Kalashnikov at home for defence against burglars. One woman I spoke to had just returned to work after having her teeth knocked out with the butt of a gun in a robbery. A man told me that a range of weapons from handguns to SAM-7 surface-to-air missiles were openly for sale in the street just a few minutes’ walk away from the office. But there was one thing that united the pro and anti-Gaddafi factions in the office: their hatred of the country manager. Echoing the security contractor, they told me that he rarely appeared in the office and never visited the oilfields. He was arrogant, incompetent and a coward.
I asked several of the interviewees about the theft of trucks by the employee and got a story very different from the one given by the country manager. They told me that in the middle of the fighting, the employee, rather than let the assets of a company for which he had worked for many years be stolen or destroyed, had decided he would drive a number of the company’s vehicles to a safe location and hide them, with the intention of returning them when the situation became more stable. As soon as the country manager arrived he made a big show of going out into the desert to demand the return of the trucks. But the employee had refused to return them without a reward.
‘What did he want in return for the trucks?’ I asked one of the interviewees.
‘He wanted a certificate of thanks for his behaviour.’
‘Yes. And the country manager wouldn’t give it to him.’
‘But he would have given all of the trucks back if we had given him a certificate?’
‘Yes. The country manager refused and told him he was in breach of the code of conduct.’ I could see why the country manager had taken to changing hotels on a regular basis.
In a series of calls and emails over the first few days of my visit, the country manager gave me the slip, making various excuses as to why he hadn’t been around to speak to me. Finally I arranged to meet him in the lobby of my hotel: we were to go for dinner at a restaurant close to the magnificent Arch of Marcus Aurelius. As we sat at a table outside, making small talk and waiting for the call to prayer to end the day’s fast, it occurred to me that the company couldn’t have made a more inappropriate match than this one between the country manager and the failed state of Libya. A dapper, American-educated corporate droid, he was a prisoner of management speak: he had ‘reached out to’ employees, he told me; they hadn’t ‘embraced the new reality’. He didn’t seem able to adjust to the fact that he was operating in a warzone, dealing with people who were suffering, many of whom had demonstrated great loyalty to a company that abandoned them at the first sign of trouble. He was keen to tell me that he was now close to resolving the truck issue. ‘You can’t trust these people,’ he told me. ‘They just don’t get it.’ Then his phone rang. ‘Sorry, I’m going to have to take it.’ This hunted, scared individual suddenly inflated with pride as he talked. After a few minutes, the call ended.
‘That was the CEO. He wants me to head up a new project team when I get out of this fucking place.’ Somewhere in the city there was the crack of a rifle, sounding like a cheap firework set off in the street. And his face said: if I get out of this place.
The next morning, I was sitting in the hotel lobby waiting for my car to the office when a man approached me. He was dusty and tired and wearing shabby street clothes. He introduced himself and immediately handed me a memory stick. His name was Ahmed and he told me that Yusuf, one of the operations managers I had met and whom I recalled as a physically huge but softly spoken man, coated with the grime of the oilfield yard, was muscling in and taking over the business in Libya.
‘He’s very well connected. He’s close to some of the tribal sheikhs. He’s also a gangster. There’s no doubt. He’s controlling many of the suppliers. It’s all on the USB.’ And then Ahmed made a plea for complete confidentiality. The consequences in this broken state of being revealed as an informant could be dire.
Later that day, in between interviews, I read the contents of the USB. There was clear proof that Yusuf had been buying up local firms that supply to the oil business and then putting contracts in place on extremely favourable terms between them and my company. In his own, admittedly criminal way, in predicting that eventually, despite all appearances, the oil market would pick up, Yusuf was showing more confidence in the prospects for Libya than the company’s senior leadership. They saw it as a basket case but Yusuf, like the best hedge-fund managers, was playing the long game with his investments and had picked the very best time to pull off this kind of scam, now that monitoring of the goings-on in the business in Libya had all but ended. Many of the company’s transactions had to be performed manually in Tripoli rather than through the centralised electronic finance systems in the US or UK. This meant that there was no longer the usual intense oversight of where money came from and went to. Instead there were numerous opportunities for an unscrupulous employee to make hay while the country detached itself from the world.
That evening, just before midnight, I was driven to British Home Stores in downtown Tripoli to buy some new clothes, since my luggage still hadn’t turned up. When we arrived, the driver sat in the car with the engine running while the security contractor stood at the shop entrance. I had ten minutes to go around the deserted aisles putting socks, pants and shirts into my basket. ‘Any longer,’ the contractor said, pointing to the shop assistants, ‘and their mates could be over to pick you up.’ But the two women at the counter seemed completely uninterested in my supermarket sweep. They didn’t lift their chins off their hands as I shopped, and they took payment from me with as much curiosity as if I were buying clothes on a Saturday afternoon in Oxford Street.
The next day, one of my scheduled meetings was with the oilfield operations manager who had been on the call a few weeks earlier. We worked our way through the scheduled questions and answers and then he said: ‘Can I ask for your opinion on the chemicals?’ He reminded me of the story of the damaged barrels in the warehouse and I expected him to ask for compliance advice regarding their disposal, as he had done with the explosives and the radioactive materials. But instead the conversation took an unexpected turn.
‘We’ve been approached by the authorities in the east of the country,’ he said. ‘They would like to buy the chemicals to use for drilling for water.’ He explained that there was a desperate need to repair infrastructure and restore running water to areas that had been ruined by the fighting. ‘The company won’t allow us to use the chemicals that survive the attack to drill for oil. They no longer meet our quality standards. But the Libyan authorities would be happy to buy them from us. They’re not proud.’ And here was the bit that made it all worthwhile. ‘They will pay us millions of dollars for stock that we will otherwise throw away.’ He showed me photos of the damaged chemicals and the letters requesting the deal from the authorities. ‘We need this deal,’ he told me. ‘We haven’t had any significant revenue for years.’ This would mean that at least some people would keep their jobs for a little while longer. A draft contract had already been drawn up and legal approval had been given. He showed me the approvals from the commercial lawyers and a chain of emails from our leaders showing their desperation to screw some profit out of this situation. But the authorities were running out of patience. They had a window in which they had to get drilling and if we couldn’t help them they would need to find someone who could. So time was of the essence and all that was lacking was the compliance seal of approval.
Over the next few days, I went over the areas of possible risk created by the opportunity – legal, commercial, reputational. The operations manager called daily, asking whether I had made my decision, reminding me that the clock was ticking. I spoke with our commercial lawyers and with finance. I made sure that the chemicals actually existed and I got assurances that there really were functioning authorities in the east of Libya. My training and experience had made me very sensitive to the signs of fraud and corruption and I was confident that I’d covered off those avenues. But I was still very uneasy with the deal. Then I realised I might have missed the most important risk factor of all. I got hold of the names of the chemicals and rang a senior company chemist to ask him to carry out an analysis of each of them to make sure they couldn’t be used as chemical weapons. The analysis came back: all clear. None of them, either alone or in combination, could be used in chemical weapons.
I let the operations manager know that he could go ahead. He was delighted. ‘This is really going to make a big difference to the bottom line for my business,’ he told me. It also meant that he would get his bonus and lots of kudos for having the winner’s mindset: he would keep his job for at least the next quarter or so. I was relieved too. The pressure had been building, and for me to have turned the transaction down at the last minute would have provoked a shitstorm in the region and even higher up the chain. As promised, the operations manager sent me the confirmation documents with the various legal restrictions and covenants that the authority had agreed to abide by regarding its use of the chemicals. In a matter of days, the sale was completed. We had sold countless barrels of useless chemicals to the Libyan water board for a huge profit. The perfect deal.
During the remainder of my time in Libya, Ahmed continued to provide me with evidence about Yusuf’s acquisition of suppliers. It was so compelling that, as a first step, I blocked the suppliers in the central accounting system. This meant that no matter how hard Yusuf tried, his supply companies couldn’t receive any significant payment from my company. I concluded the compliance audit and left Libya. My bag was waiting for me when I arrived at Tripoli Airport. As soon as I picked it up from the airline desk in departures, it was seized by a man wearing an old police jacket and grubby suit trousers. He took me to a small room at one side of the departures hall and ordered me to unpack every single item onto a large table in front of him. Everything was covered in dust. When I finished he told me to repack it. I checked my luggage in and made my way once again past the gangs of sub-Saharan Africans travelling from misery into misery, past the stall selling tatty Free Libya merchandise, to the plane.
Then the oil price collapsed. It was already bad but now the price of a barrel had really tanked. There was a lot of talk about permanent structural change in the industry. Firms like mine fired thousands of employees in a matter of weeks. I made sure that Ahmed was put on a protected list of essential employees as his reward for doing the right thing. Somehow, the Libyan senior managers, Yusuf included, found out about this almost as soon as it happened. I received a series of increasingly desperate emails from Ahmed. He knew what was about to happen and thought that I had betrayed him. The emails stopped abruptly when he was fired. When I raised Ahmed’s case with a senior HR manager, I was told that it was unfortunate but that, given the state of the market, it was a matter of only a few weeks before all the employees on the protected list were going to be fired anyway. Any concern for Ahmed got lost in the huge wave of redundancies that the low oil price brought.
I went ahead anyway and presented the allegations against Yusuf to senior management. Despite the evidence, they didn’t find them convincing and the matter was closed with no further action taken. The supply companies that were the subject of the investigation were unblocked in the system. In the rapid restructuring of the company in Libya in response to the manically deteriorating market conditions and worsening violence, Yusuf was promoted, along with the operations manager who had arranged the sale of the damaged barrels to the water authorities. This was to fill the gap created by the departure of the detested country manager, who had managed to get out of Libya with a plum posting to a new project back at US HQ. Not long after I left Tripoli, a large car bomb was left outside my hotel, driven through the entrance, which was undefended by bollards. Thankfully, it was defused.
Eventually I caught up with the regional head of security about the sale of the chemicals. ‘They didn’t want the chemicals you fucking idiot,’ he said. ‘They wanted the barrels.’ He was sure the whole deal was a scam, that one of a number of groups – tribal, terrorist or government – was tapping available sources for the basic ingredients to make their weapon of choice, the barrel bomb. There was no proof of this. I had done all I could to verify that the deal was genuine but in my heart of hearts I knew that it smelled. The regional head of security just found it bleakly funny that one of the most advanced weapons in the world – a laser-guided bomb – had spawned hundreds of the crudest airborne weapons possible, responsible for so much indiscriminate killing. But there was a silver lining. ‘Look, we made a few million bucks. With Brent Crude at sub-$40 a barrel for the foreseeable future and Libya eating itself alive, that’s an awesome result,’ he said. ‘As long as the company logo doesn’t appear on a report by CNN, no one is going to give a shit about where those barrels end up.’ And, as it turned out, he was right.
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