MARK COLVIN: The transparency lobby group Global Witness says it's obtained a document laying out some of the details of the Western banks that handle the oil billions of the Gaddafi regime.
The anti-corruption group says the two banks most heavily involved were HSBC and Goldman Sachs.
The document is called the "Libyan Investment Authority-Management Information Report," and it's dated to June the 30th last year.
That's six months before the start of the uprising which turned into a civil war.
At the moment Colonel Gaddafi is having to finance his war machine without access to more than $30 billion in assets frozen by the US. But it's believed he still has access to vast reserves of cash elsewhere.
Robert Palmer is a campaigner with Global Witness.
He spoke to me from London.
ROBERT PALMER: Corruption is not just what happens in Africa or Asia, it's what happens in London and New York and Tokyo when you have major financial institutions willing to do business with corrupt politicians.
MARK COLVIN: And then specifically in Libya, you're saying that one bank or maybe a couple of banks are doing most of the business for the Gaddafi clan?
ROBERT PALMER: We have a document which is the investment position of the sovereign wealth fund of Libya, the Libyan Investment Authority as of June last year and it shows a whole range of investments across many different financial institutions.
However HSBC is listed as having just under $300 million of cash. But what's really important about this is the cash accounts are what allow the Libyan Investment Authorities to make all their other investments.
So without access to HSBC's bank accounts, the Libyan Investment Authority would not be able to invest in the rest of the economy.
MARK COLVIN: Now a lot of people would have heard you talk about a sovereign wealth fund; why shouldn't a bank deal with a sovereign wealth fund?
ROBERT PALMER: We're not saying that banks should not deal with sovereign wealth funds, what we're saying is that there is a danger in corrupt states such as Libya that state money is abused for personal gain.
MARK COLVIN: Are you saying that the sovereign wealth fund isn't really a sovereign wealth fund it's actually a slush fund for Gaddafi and his family?
ROBERT PALMER: The prosecutor at the International Criminal Court has said that Gaddafi makes no distinction between state and personal assets. What we would like to know is what checks HSBC had in place to ensure that these funds, these state funds, were not abused for corruption.
And that's the real challenge when it comes to dealing and handling state money from a corrupt country and a country such as Libya, there is a very thin dividing line between state assets and personal assets.
MARK COLVIN: What controls is a bank like HSBC obliged to make?
ROBERT PALMER: So under the global anti-money laundering standards, banks are required to know who they're dealing with, know who their customer is but also if it's a high risk customer carry out extra checks. You want to have an understanding of who controls this fund, where it's being used, where it's being invested. Does the pattern of this spending match what we expect?
Now there's been a lot in the public domain about how Colonel Gaddafi's son Saif al Islam had a huge amount of personal control over the Libyan Investment Authority. So what concerns us at Global Witness is the potential for these funds, across all the LIA's investments could be abused for the personal gain of the Gaddafi family, which is why we're calling for transparency.
What we want is new laws requiring banks and investment funds to publish all the state funds that they manage. This would cost nothing and would allow citizens to see that state revenues are not being stolen by corrupt leaders.
MARK COLVIN: Are you mainly focused on getting this stuff made transparent now or are you interested in making sure that let's say some of the Gaddafi family get out after all of this, that they can't get hold of the billions afterwards?
ROBERT PALMER: We want to have in this case to ensure that the Libyan Investment Authority funds are not able to be abused for corrupt purposes. These funds are currently frozen, so that's less likely but what is important is to get a change in the way banks deal with state funds.
They shouldn't think of state funds as this is safe, this is government money, this is low risk. I think banks really need to be aware that when they're dealing with an authoritarian regime such as Libya, there's huge risk that state funds can be abused for personal gain and that banks need to make sure that they have really good checks in place to know who has control over these accounts, where is this money being spent?
And I think one of the really important change would also be - greater transparency over how these funds are managed.
MARK COLVIN: So if laws need to be changed, who needs to change them; states or in some way a body that transcends states?
ROBERT PALMER: This needs to be an international effort. Money laundering and the movement of illicit money around is an international phenomenon and you just have to look at this portfolio of assets to see the range of countries and financial institutions in with the Libyan Investment Authority invested.
There is a tiny little known body called the Financial Action Task Force buried in a small office in Paris - this is meant to set the global standards of how to deal with dirty money and we think the Financial Action Task Force, should come out with a recommendation that banks should publish the state assets that they hold.
MARK COLVIN: Even Swiss banks which were for such a long time absolutely closed up were eventually able to pried open to some degree, but it did take a very long time; do you think this will take a very long time?
ROBERT PALMER: I think it does take time to change people's perceptions, however I think what has happened with the Arab Spring over the last six months has brought about a change in perception.
People are slowing starting to understand the role that our financial system played in facilitating corruption, that the regime of dictators such as Colonel Gaddafi would not be possible without access to funds and resources and banks willing to handle their money.
So I think we're going to see hopefully a shift over the coming years in perception about the risks of doing business with these sorts of customers.
MARK COLVIN: Robert Palmer, London campaigner with Global Witness.
We contacted HSBC today but they said they would not be commenting.
Earlier today Goldman Sachs and JP Morgan Chase also declined to comment to the US CNBC network, citing client confidentiality rules.
And Societe Generale told CNBC that it dealt with many sovereign funds and complied with all applicable rules and regulations.
