* Switzerland acknowledges transfer under deal with Libya
* Says funds went to German account as future compensation
* Compensation linked to leaked mug shot of Gaddafi son
GENEVA, June 17 (Reuters) - Switzerland paid 1.5 million Swiss francs ($1.33 million) into a German bank account as part of a deal which secured Libya’s release of a Swiss businessman held for nearly two years, the Swiss foreign ministry said on Thursday.
The funds will be transferred to Libya as compensation if a Geneva criminal inquiry fails to find who leaked a mug shot of Libyan leader Muammar Gaddafi’s son Hannibal, arrested in the Swiss city in July 2008. The photo appeared in a Geneva paper.
Max Goeldi, head of Libya operations for the Swiss engineering firm ABB ABBN.VX, flew home this week, after Swiss foreign minister Micheline Calmy-Rey signed a deal in Tripoli that both sides said was aimed at ending their diplomatic row.
“So far, no money has been handed over to Libya. The plan of action foresees compensation in the event that the culprit in the ongoing Geneva criminal investigation cannot be found,” a Swiss foreign ministry spokesman told Reuters.
“In order to liberate Goeldi, it was necessary to restore trust. To this end, 1.5 million Swiss francs, an amount both sides deemed appropriate compensation for expenses linked to the Geneva investigation, was put into a German account.”
But Swiss media said on Thursday that it was unlikely that the culprit would be identified, noting that the inquiry had been stumped since last year. “It seems a done deal that the colonel’s son will pocket the sum,” the daily Le Temps said.
Swiss and Libyan officials are due to meet in Madrid on Friday to work on normalising their relations as part of the deal clinched with the help of Spain and Germany.
Goeldi’s liberation drew a line under a diplomatic row that had threatened to poison ties between Tripoli and Europe and also drew in major energy firms. ([ID:nLDE65C06B])
Libyan officials deny Goeldi’s case had anything to do with Hannibal Gaddafi’s arrest, but Goeldi’s supporters say he was an innocent pawn caught up in Libya’s retaliation against Berne.
Goeldi had been serving a four-month prison sentence for violating immigration rules until his return on Monday. He had been barred from leaving Libya since July 2008. A second Swiss businessman, Rachid Hamdani, was released last February. (Reporting by Stephanie Nebehay in Geneva and Silke Koltrowitz in Zurich; Editing by Charles Dick)