Libya secretly offered a huge donation to the United Kingdom’s cash-strapped Labour Party as part of its attempts to end its international isolation.
British ministerial officials say the Libyan proposal was instantly rejected.
But an investigation by the The Guardian has uncovered other recent attempts by Libya to use back channels to get close to Labour politicians.
These include an offer of lucrative deals with the arms company BAe Systems, and a plan to publish a biography of Colonel Moammar Gadaffi in Britain.
Libya’s offer of an enormous donation came at a time when Labour had a £10-million deficit last September. It originated fromnn Ahmed Gadaff al Daim, Gadaffi’s cousin and a senior figure in the regime, and was passed to the Labour peer, Lord Evans of Temple Guiting, by a London-based businessman, Wolfgang Michel.
Evans rejected the offer out of hand and informed the party’s general secretary, David Triesman. ”The proposal was absolutely ridiculous,” said a Labour official. ”Even if foreign donations were not outlawed, we never would have considered it. The Libyans want to rub shoulders with British politicians and seemed to think this was a way.”
A number of Libya’s approaches have been made through Michel. The German-born 74-year-old, who lives in fashionable Chelsea, describes himself as an agent on hi-tech international deals.
Michel has done business deals with many of the world’s most controversial regimes, including Iraq, Russia and Iran.
According to his associates, Michel sought to arrange a 1998 meeting between the Libyans and Labour politicians. Libya was secretly offering £6-billion-worth of aviation deals in return for the permanent lifting of sanctions.
Michel sought to use as an intermediary Matthew Evans, the Labour peer and former chairperson of publishers, Faber and Faber. Evans is Michel’s son-in-law and was recruited to the Blair government in December as a whip.
Separately, confidential talks did eventually get off the ground between BAe, Britain’s biggest arms manufacturer, UK officials, and Gadaff al Daim on behalf of Libya, with meetings in Switzerland and London. But they remained inconclusive.
The two countries are continuing to edge closer. Last August UK Foreign Office Minister Mike O’Brien flew to Tripoli to meet Gadaffi in the first such encounter for 20 years.
Officials at Faber and Faber say Michel suggested the firm publish a biography of Gadaffi. But Evans told The Guardian he rejected the deal in September 2001.
”I went to a meeting with Gadaff al Daim who wished to talk about a biography about his cousin. I made the point it would have to deal with Lockerbie and the regime’s funding of terrorism. After discussion with my colleagues at Faber, we decided not to pursue the idea.”
Michel confirmed that he had raised ”a possible publishing opportunity”. But he said he did it on his own account, ”not on behalf of Gadaff al Daim”.
UK government officials say Evans has been meticulous in disclosing his family connections, and that he has kept Wolfgang Michel and his Libyan link ”at arms length”. Evans’s government job does not ninvolve defence or international nnissues, they point out.
Gadaff al Daim first received unwelcome publicity in 1989, when the former international call girl Pamella Bordes said she had had a long affair with him while he was negotiating commercial tie-ups between Libya and the Italian car firm Fiat.
Gadaff al Daim, approached through the Libyan embassy in London, last week did not respond to invitations to comment.
Michel, who said he knew Gadaff al Daim, cloaks his business affairs in mystery via a Liechtenstein offshore trust. Records show a UK investment company ultimately controlled by him — Entera Corporation — has brought into Britain more than £2-million in commissions earned from India. Associates say he has acted to sell arms on behalf of Russia, but Michel denied this. He said he had ”negotiated legitimate sales of civil aircraft to India”. He points out his commissions include earnings from the export of jute.
Company records show he also has a business link with the French state-owned aero engine company, Snecma, which powers Mirage fighters, the Airbus and Russian trainers. Michel denies he has been their agent.
Questions have been raised as to whether he was involved in negotiations to sell Mirage fighters to President Saddam Hussein in Iraq — a deal promoted by the French government that collapsed in 1990 when Iraq invaded Kuwait.
Michel said he had visited Iraq once but not during that period. He agreed he had concluded agricultural deals with the Iranians in the company of such controversial figures as the Saudi arms dealer Adnan Khashoggi, and the late tycoon, Tiny Rowland.
Michel’s lawyer emphasised last week he had not been involved in any improper or illegal military sales or business dealings. — Â