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Image: Blair and Gadhafi
Stefan Rousseau  /  AP file
Britain's Prime Minister Tony Blair, left, shakes hands with Libyan leader Col. Muammar Gadhafi in his tent outside Tripoli, in Libya, on March 25, 2004.
By Michael Isikoff National investigative correspondent
NBC News
updated 2/7/2011 8:44:07 PM ET 2011-02-08T01:44:07

Internal British government documents provide revealing new details about how that country’s last two prime ministers — Tony Blair and Gordon Brown — sought to curry favor with Libyan dictator Muammar Gadhafi in an effort to smooth the way for hundreds of millions of dollars in commercial contracts with oil giant BP and two big British defense firms.

Those efforts ultimately prompted Brown’s government to “do all it could” to try to win the release of Abdulbaset Ali al-Megrahi, the former Libyan intelligence agent convicted of blowing up Pan Am Flight 103 over Lockerbie Scotland on Dec. 21, 1988, killing 270 people, according to an official  British report released Monday.

“Megrahi’s health remains a key high-risk issue. We do not want him to die in a Scottish jail, with the likely negative consequences for our relations with Libya,” read a Jan. 22, 2009, memo from the British Foreign and Commonwealth Office to senior officials in Brown’s government.

Those “consequences,” the documents show, were Libyan threats to cut off several lucrative British commercial contracts, including a $900 million oil exploration deal that BP had signed with Gadhafi’s government in 2007 as well as contracts by two big defense firms, General Dynamics UK and MBDA, to provide “tactical communications” and other equipment for  an air defense system for Libya.

Megrahi was ultimately freed by the Scottish government in August 2009 on “compassionate’ grounds — a decision that was roundly denounced at the time by U.S. officials and families of the Lockerbie victims. 

The report, commissioned by British Prime Minister David Cameron, uncovered no “smoking gun” proving that British officials under Brown or BP directly pressured the Scots to free Megrahi. But it did find that British officials, including  Brown, repeatedly tried to mollify Gadhafi over the issue. 

Click to read the report and supporting documents

Once they were unable to secure Megrahi’s  release as part of a prisoner transfer agreement (PTA) with Libya, British officials effectively coached the Libyans on how they could gain freedom for the terrorist by emphasizing to the Scots that he was dying of prostate cancer and had only three months to live.

“We now need to go further and work actively, but discreetly to ensure that Megrahi is transferred back to Libya under the PTA or failing that released on compassionate grounds,” reads a Jan. 22 2009 Foreign Office memo.

'They cut deals that set the terrorist free'
The new disclosures in the report prompted angry reactions Monday from members of Congress who have repeatedly denounced British and Scottish officials for covering up the commercial interests that led to Megrahi’s release.

“The U.K. didn’t just turn a blind eye to Al Megrahi’s release -- they cut deals that set the terrorist free,” said Democratic Sen. Bob Menendez of New Jersey, who represents the families of many Lockerbie victims.

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His Democratic colleague, Sen. Frank Lautenberg, added: “The families have suffered long enough and it’s time to acknowledge the truth: justice was traded for commercial interests.”

As a practical matter, there is little, if anything, that the New Jersey senators or others in the U.S. Congress can do about the issue. Although he purportedly was on his deathbed at the time of his release, Megrahi remains alive today, eighteen months later,  living in a luxury villa with his family outside Tripoli. But U.S. officials say there is virtually no chance that the Libyans would ever consent to him being sent back to prison.

The New Jersey senators, along with Democratic Sens. Charles Schumer and Kirsten Gillebrand of New York, renewed their calls for a new investigation of the release by the British and Scottish governments, but officials in both London and Edinburgh say they have no intention of ordering further inquiries.

Still, the new material is likely to further enrage family members in the U.S. and other critics of the Megrahi decision, if only because it starkly shows how much business interests weighed on the minds of British officials as they dealt with the fate of a man who Cameron told the House of Commons had been convicted of the “the largest mass murder in British history.”

The report, by Sir Gus O’Donnell, Britain’s most senior civil servant, notes that then British prime minister Tony Blair visited Libya on May 30, 2007, and signed a memorandum of understanding to negotiate a Prisoner Transfer Agreement that would allow the return of Libyan prisoners in British jails.

While there, the report notes, Blair witnessed the signing of an oil exploration and production sharing agreement between BP and the Libyans.

Brown turns on the charm
When Brown took over from Blair in July 2007, he wrote a warm letter to Gadhafi seeking to ensure that relations stayed on firm ground and that further such business deals were signed.  

“Dear Colonel Qadhafi,,” he wrote on July 25, 2007, using an alternative spelling of the Libyan leader’s name. “I am delighted to write to you as Prime Minister. I look forward to developing a close and productive relationship with you. … I know that your close personal relationship with Tony Blair played a vital role in helping the relationship between our countries develop.”

Brown told Gadhafi then that he hoped “we can do more together” in a number of areas, including health care and defense. He also said he hoped Libya would “invest productively through the City of London,” and that companies in both countries would  strengthen their commercial links.”

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Problems began to develop shortly after that letter. In seeking to negotiate the prisoner transfer agreement, the British team at first took the position that Megrahi should be excluded. (British officials had promised the U.S. earlier that anybody convicted of the Lockerbie bombing would serve out their sentence in a British jail.)  The  Libyans made it clear that they wanted Megrahi to be released and “this issue was … a red line for them” that could jeopardize the pending business deals.

This prompted Brown to write an even more effusive letter to Gadhafi reassuring him of his commitment to maintaining close ties between the two countries.

“Dear Colonel Qadhafi, I wanted to write to wish you a belated Ramadan Kareem and to wish you and your family well in this holy month,” he wrote on Sept. 26, 2007.”

Brown went on to promise that the British government was working to “fulfill all the undertakings agreed during Tony Blair’s visit in May” and then specifically cited “the early conclusion for contracts” with General Dynamics and MBDA. “Separately, I know that BP look forward to early Cabinet approval of their agreement with Libya so that they can begin many years of mutually productive investment in the development of the Libyan economy.”

Brown’s letters never mention Megrahi. But according to the report, the Lockerbie bomber became the central issue of tension between Libya and the U.K, and soon prompted Brown’s government to reverse its position: It agreed that the prisoner agreement should include Megrahi after all.

Former intel official lobbied on BP's behalf
One apparent factor: lobbying by BP officials, including Mark Allen, a consultant to the oil giant who had previously served as one of  the Britain’s top Mideast experts in MI-6, the country’s intelligence service.

A Nov. 19, 2007, document records a meeting that day in which Allen and Michael Daly, chief of BP’s exploration division, met with Simon McDonald, Brown’s chief foreign policy adviser,  and asked “about progress in (Her Majesty’s Government) support of the BP contract.” Allen “emphasized the financial (material blacked out) and opportunity costs of delay,” while Daly “outlined political access (to Brown’s government) as a key issue for BP.”

(BP did not immediately respond to a request for comment. But the  company has previously told NBC that it never specifically lobbied for Megrahi's release. It said its concerns were "over commercial delays due to the unresolved" prisoner transfer agreement.)

The British reversal of position on including Megrahi in the prisoner transfer agreement led to yet a third letter from Brown to Gadhafi on Feb. 18, 2009, that once again emphasized the importance of Libya-UK business deals.

“Dear Colonel Qadhafi, May I wish you, and your family well,” the letter reads.

With no mention of Megrahi, Brown wrote about his hopes to work successfully with Libya ”in the field of counterterrorism. … I would like us to draw more on your experience of countering radicalization and do more together in police cooperation.”

After once again mentioning the defense and BP oil deals, Brown also encouraged Gadhafi to invest more in Great Britain, mentioning an upcoming visit to Tripoli by the lord mayor of London. “I therefore hope you and the Libyan Investment Authority will decide to choose London as the site your international investment office,” Brown wrote.

Brown’s office did not respond to request for comment from NBC on Monday. But the BBC on Monday quoted him as saying that the report made clear that the release of Megrahi was the responsibility of the Scottish government.

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“When the issue came to me, I took the view, as the report confirms, that the British government should not pressure or attempt to use influence on this quasi-judicial decision of the Scottish minister,” Brown was quoted as saying. He cited yet a fourth letter he wrote to Gadhafi on Aug. 20, 2009, when it was clear that Megrahi was about to be released.

In that letter, also reprinted in the report, Brown reminded Gadhafi that when they met the previous month at a G8 summit, he stressed that the release of Megrahi “should be a purely, private, family occasion. A high profile return would cause further unnecessary pain for  the families of the Lockerbie victims. It would also undermine Libya’s growing international reputation.”

Read more stories by Michael Isikoff

That very day, Megrahi flew back to Tripoli aboard a Libyan government provided jet accompanied by Gadhafi’s son and was greeted at the airport by several hundred cheering people. The images of the hero’s welcome for Megrahi embarrassed U.K. and Scottish officials and were denounced by family members of the victims and Obama administration officials.

Megrahi has not been seen in public since.

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