How could anyone release the only man convicted in the bombing of Pan Am Flight 103?

Does anyone really believe that Scottish officials sent Abdelbaset Ali Mohmed al-Megrahi back to Libya for “compassionate” reasons? Yes, the former Libyan intelligence agent is purportedly dying of cancer. But as a London Times columnist asked: Would the same Scots release Robert Black, the Scottish serial killer of young girls, if he were on death’s door?

Clearly something is going on here that has little to do with compassion. Americans, who remember the Lockerbie tragedy with horror, deserve to know the real reason Megrahi was freed.

The most likely possibility falls under the heading “business and blackmail.” The Brits have extensive trade interests in Libya, and Megrahi had become an obstacle to them. (No one believes British Prime Minister Gordon Brown’s claim that the decision rested solely with Scottish officials.)

As Saif Gadhafi, a son of Libya’s leader, put it last week, “In all commercial contracts for oil and gas with Britain, Megrahi was always on the negotiating table.” His father, the mercurial Moammar, went out of his way to embarrass Brown, along with Queen Elizabeth and her son Prince Andrew (a regular visitor to Libya on trade missions), by thanking them publicly for their alleged role in Megrahi’s release.

The British had been seeking to unload Megrahi for some time since Gadhafi’s renunciation of terrorism and his scrapping of Libya’s weapons of mass destruction in 2003. Gadhafi made clear that lucrative oil deals depended on Megrahi’s repatriation.

Moreover, Gadhafi has been using his oil and gas wealth to blackmail Europeans into accepting his unorthodox behavior. Over the past year, the Libyan leader waged economic war against the Swiss after his son, Hannibal, a reputed playboy, was briefly arrested by police in a Geneva hotel based on complaints that he had been beating his servants.

In response, Gadhafi cut off crucial oil supplies to Switzerland and made two Swiss citizens living in Tripoli virtual hostages. After the Swiss president made a groveling apology, Libya promised to restore normal relations and to let the hostages go.

British expats were threatened with similar reprisals if Megrahi died in prison, according to the London Times. So home he went.

There is a second but less likely possible explanation for the Megrahi decision. Some argue the Brits knew that Megrahi wasn’t guilty and Iran was the true culprit. So why not release him? (Never mind that a neutral Scottish court found him guilty.)

To lay that one to rest, I spoke by phone with Vincent Cannistraro, a former head of counterterrorism at the CIA who directed the agency’s Pan Am 103 investigation. Cannistraro told me the evidence at first implicated a Damascus-based Palestinian group, the Popular Front for the Liberation of Palestine — General Command (PFLP-GC), which was working on behalf of Iran. Tehran had authorized and funded the bombing, he said, as a reprisal for the accidental U.S. shoot-down of an Iranian civilian airliner over the Persian Gulf in July 1988.

But this operation was foiled in October 1988 by German intelligence, which broke up a PFLP-GC cell in Frankfurt. The Lockerbie bombing happened two months later.

Cannistraro believes the PFLP-GC handed off the operation to the Libyans. The explosive device that destroyed Pan Am 103 was placed in a Toshiba cassette player — just like the bombs found in the Frankfurt bust.

“The methodology of the boom box was very coincidental,” Cannistraro said. “To me, this meant that Libya picked up the technology from the PFLP-GC, which had active members in Tripoli.” He added firmly: “There is no question in my mind that the Libyans carried this operation off.”

Among the other questions that surround the Megrahi affair is what role, if any, the Obama administration had in it. After all, 180 of 270 passengers on Pan Am 103 were Americans. The British press claims Attorney General Eric Holder was informed in advance.

Once Megrahi was released, it was dumb for the Brits or the Americans to expect Gadhafi to refrain from giving him a big public reception. Indeed, the Libyan leader is planning to honor the convicted bomber at next month’s 40th anniversary celebration of the coup that brought him to power.

Obama’s engagement policy can’t preclude serious consequences for Libya for continuing to glorify Megrahi. “The man who organized the hero’s welcome for Megrahi was the one who ordered the Lockerbie bombing — Moammar Gadhafi,” says Cannistraro. “He stuck his finger in our eye.”