UPDATE 1-Suspicion surrounds Vienna death of Gaddafi oil boss

Tue May 1, 2012 12:30pm EDT

Related Topics

* Former Libyan oil boss could not swim

* Found dead in the Danube

* Had defected from Gaddafi in last phase of uprising (Adds description of scene, quotes)

By Michael Shields and Alex Lawler

VIENNA/LONDON, May 1 (Reuters) - The mysterious drowning of Muammar Gaddafi's former oil boss in Vienna has shaken friends and colleagues, who say they suspect enemies may have hunted down and killed the man who knew more than anyone else about the Libyan dictator's billions.

The body of Shokri Ghanem, who served for a time as Gaddafi's prime minister and ran the Libyan oil industry for years, was found floating in the Danube River on Sunday morning a few hundred metres from his home, fully clothed.

According to police he drowned, possibly having fallen into the river after a heart attack while on an early morning walk. Preliminary autopsy reports show no sign of foul play.

Friends say he did not know how to swim, and they had warned him to be careful of enemies in his Austrian exile.

Ghanem, 69, was one of the most powerful men in Gaddafi's Libya - effectively controlling the purse strings of the government and the Gaddafi family - until he defected to the opposition in May last year as rebels bore down on Tripoli.

His decision to switch sides was a turning point in the uprising that eventually drove Gaddafi from power. The former Libyan leader was eventually caught by rebels and lynched.

Ghanem moved to a comfortable exile in Vienna, headquarters of OPEC, where two daughters live with their families. He was still closely associated with Gaddafi's rule by Libya's new leaders and had ruled out returning home.

He would have had enemies among Gaddafi's opponents because of his years at the centre of power, as well as among the late leader's friends and kin because of his decision to defect. And he would have had unrivalled knowledge of years of oil deals worth tens of billions of dollars.

Friends doubted the official account of his death.

"I thought that was ridiculous. You don't go down to the Danube, have a heart attack and fall into the river," said a former oil minister of another OPEC country who had remained a close friend of Ghanem.

His body was found at 8:40 a.m., floating near a promenade on the Danube, an area lined with bars and restaurants, where Viennese gather in the summer to sunbathe and drink beer. Police say he had been in the water a few hours, since about dawn.

There is no rail along the water's edge, and it was not the first time a dead body had been found floating there.

"We didn't know who it was. We thought it could have been someone who had too much to drink and fell into the water: that happened a few years ago," said Moussa Rembetiko, who has run a Greek restaurant there for 14 years.

Atlan Yalvac, manager of the Fish Tower grill, said he had arrived to open the restaurant on Sunday morning and found police standing around the body, which lay on the pavement where they fished it out. "It was horrible. Terrible."

"NORMAL LIFESTYLE"

Those who knew Ghanem universally describe him as a cheerful character, quick with a joke. Friends said that exterior hid a wary mind, forever worried about threats to his safety but determined to try to lead a normal life in his Austrian exile.

"Given where he was, yes I think I would be worried. Without any doubt, I would have been very worried. In fact I think he said at times he felt he was being followed. But that might have been his imagination, who knows," said the former OPEC minister, who asked not to be identified.

"He used to go around Vienna on the streetcar, on the bus. He wasn't hidden and had a chauffeur day and night, nothing of the sort. In that sense he tried to maintain a normal lifestyle."

Friends had advised Ghanem to be cautious, said Issam Chalabi, who ran Iraq's oil industry in the 1980s and had recently set up a consultancy with Ghanem in Vienna.

"We used to tell him, 'be careful, keep a low profile'," he said. "The problem is that he angered the previous regime because he had defected and the new Libyan leadership did not approve of him because he was involved with opaque contracts."

Like others, Chalabi was unconvinced by the official account. "For him to be found in the River Danube, in the morning, fully clothed - you know that he doesn't swim, he can't have fallen just like that. I think we have not heard the end of the story," Chalabi told Reuters.

"The one who pushed him knows that he cannot swim."

HEALTH TESTS

There were suggestions that Ghanem had health problems. Nihal Goonewardene, a Wasington-based friend of Ghanem's since graduate school in Boston, said Ghanem had told a houseguest on Saturday evening that he was not feeling well and left early on Sunday for a walk from which he did not return.

A few days before, he had told a friend that he had recently had a series of medical tests and was concerned about getting bad results, Goonewardene told Reuters.

For now, the family has said little in public. Ghanem's nephew, Loayi Ghanem, told Reuters an autopsy would be carried out on Wednesday and the family hoped to bring the body back to Libya on Thursday. A man who answered the telephone at Ghanem's home said the family did not wish to speak about the incident.

Austria's Krone tabloid quoted a daughter as saying "for us it is 90 percent (probable) that the cause was a heart attack".

Ghanem, who was also close to Gaddafi's son Saif al-Islam, was privy to potentially damaging information including on oil deals with Western governments and oil companies. Such deals are now under investigation by Libya's new leaders.

As chairman of Libya's National Oil Company (NOC) since 2006, Ghanem helped steer Libya's oil policy and held the high-profile job of representing Libya at OPEC meetings in Vienna.

It was a time when Libya was being accepted back on the international stage after decades as a pariah. Western countries were hoping Gaddafi and Saif al-Islam would carry out reforms. Their companies were signing huge contracts.

"I think he knows more about what really went on in NOC than anyone else alive - not alive now, he's dead," said the former OPEC minister who asked not to be named. "Obviously there are matters there that would not pass muster in a normal society. Where was all the money going?"

In 2009 Ghanem quit briefly, but returned to work for the Gaddafis until the weeks before their downfall.

"As head of NOC, he was seeing all the income Libya had. And this family of Gaddafis, as time went on they wanted more and more money. One of them came and asked for a billion dollars, that's when he resigned," said the former minister.

"I think at that moment he was terribly worried. What I have never known is why he went back." (Reporting by Michael Shields in Vienna, Alex Lawler and Samia Nakhoul in London, Tom Heneghan in Paris and Marie-Louise Gumuchian and Ali Shuaib in Tripoli; Editing by Peter Graff)

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