Loved ones of those killed in the 1988 jetliner bombing, who were told he would likely die within three months, feel betrayed. U.S. lawmakers are investigating whether oil giant BP pushed for his release from prison to get Libya's oil and are assailing Scotland for freeing him.
With the anniversary Friday of al-Megrahi's release, the case is once again the window through which Libya is viewed. The North African nation, for years a pariah state under U.N. and U.S. sanctions for sponsoring terrorism, now seems to have nowhere to go but up -- and is quietly rebuilding after decades of isolation.
The circumstances surrounding al-Megrahi's release have "reinforced an idea that Libya is still somehow a place that's problematic," said John Hamilton, a Libya expert and contributing editor to Africa Energy.
"It's reminded everyone of that -- if they really needed reminding."
While the U.S. and Scotland trade verbal blows and BP tries to defend itself, the nation Moammar Gadhafi has led for four decades is reintegrating into the international community -- brimming with confidence that foreign firms are eager to tap into its oil and rebuild an infrastructure crumbling under the sanctions it endured for more than a decade.
Maybe a little too eager, as BP has learned.
Already under scrutiny because of the Gulf of Mexico oil spill, BP is the focus of a U.S. Senate Foreign Relations Committee investigation into whether its $900 million offshore exploration deal with Libya was a factor in the release of the only person convicted in the bombing over Lockerbie, Scotland. Of the 270 people killed, 179 were Americans.
BP and British officials have repeatedly denied that the oil giant played any role in the decision to free al-Megrahi on compassionate grounds just eight years into a 27-year prison sentence.
"Everything we've done on the Lockerbie case over the last 20 years -- that is, from the investigation to the trial to the conviction to the incarceration of Mr. Megrahi and to his eventual release under compassion grounds -- has been done following the precepts of Scottish jurisdiction and Scots law," Scottish First Minister Alex Salmond said Wednesday.
"Some people say that the Scottish system has too much compassion," he said. "But at the end of the day, I think I'd rather be first minister of a society with too much compassion than be first minister of a country with too little compassion."
In the U.S., many are convinced that al-Megrahi's freedom was merely a matter of commerce.
"If we were to pursue this, it would put pressure on BP and the Libyan government," said New York Sen. Charles Schumer, one of four Democratic senators spearheading efforts to investigate the Libyan's release.
"Sunlight is a great disinfectant, and the more we shine the light on this, the uglier it gets," Schumer told the AP. "If we keep the spotlight, both legal and public pressure on the governments, then sooner or later we'll succeed. Because what they did was so wrong, and makes them look so bad."
Scottish Justice Secretary Kenny MacAskill has been repeatedly blasted by the families of the U.S. victims for freeing al-Megrahi, despite their appeals to keep him in prison.
Dr. Karol Sikora, a cancer specialist and dean of the Buckingham University School of Medicine, was among those who suggested that al-Megrahi, who suffers from prostate cancer, had three months to live. He is now eating his words.
If "I could go back in time, I would have probably been more vague and tried to emphasize the statistical chances and not hard fact," he told Britain's Observer newspaper on Sunday -- comments that have further outraged victims' families.
"There are people in Scotland who request compassionate release and don't get it," said Susan Cohen, whose 20-year-old daughter, Theodora, died in the bombing. "There are people who die in Scottish prison."
"He may outlive me," the 72-year-old Cape May Court House, N.J., resident said in an interview this week.
Libya has largely stayed silent, refusing to be goaded into the trans-Atlantic scuffle and instead charting a careful course through the Lockerbie minefield.
From the moment a year ago when al-Megrahi limped slowly down from the plane that carried him home, his return was viewed, at least in Libya, as the end of a troubling chapter in the country's history.
For more than a decade, Libya's 6 million people felt the crush of sanctions enacted because of a litany of their government's transgressions as long as it is varied.
These include the 1986 bombing of a Berlin disco, the bombing of a French UTA airliner three years later, as well as the reported assassinations of dissidents, including a former Libyan foreign minister allegedly snatched in Egypt and thrown into a steel plant smelter.
There was also Tripoli's support for the Irish Republican Army, Palestinian radicals, the German Baader-Meinhof gang and a long line of African dictators and despots.
Lockerbie, however, resonated most loudly and enduringly.
Gadhafi eventually handed over al-Megrahi and another Libyan suspect, who was acquitted in a 2001 trial. The Libyan leader also paid billions of dollars in compensation to victims' families and renounced his weapons of mass destruction program -- moves that paved the way for the lifting of sanctions and the country's re-emergence on the world scene.
But the curtain was raised on the Lockerbie drama again the day al-Megrahi flew home, escorted triumphantly by one of Gadhafi's sons.
Television footage showed thousands of Libyans on the tarmac of a military airport, waving Libyan and Scottish flags. But the hero's welcome was short-lived.
As it became clear that the display -- part of a broader annual youth day celebration -- was drawing protests from the U.S. and Britain, the crowd, which had been building for hours, was thinned in the span of 30 minutes.
The damage was compounded by reports about al-Megrahi's elegant living conditions.
He resides with his wife and children in south Tripoli's posh Damascus neighborhood, home to ministers and ambassadors. The family's two-story villa is surrounded by a well-manicured garden with a fountain. In the garage are a Toyota Land Cruiser, a Hummer and a BMW 7 sedan.
Visitors to his home say al-Megrahi spends his days on a hospital bed, surrounded by bottles of medication, and moves around with a cane. His forays outside are mostly limited to visits to the Tripoli Medical Center -- one of the country's best hospitals -- to treat his prostate cancer.
He refuses to speak to the media, apparently on orders of Gadhafi's government, and his lawyer in Scotland did not respond to requests for comment.
Though the arguments swirling around his release are about justice and politics, victims' families say the real issue is business.
Even before Megrahi was freed, it was clear that Libya was the new "it" market -- a nation that needed just about everything after years of sanctions.
Flush with oil money, Libya was eyeing investments in Europe, most notably in Britain and Italy. The country was luring back foreign oil companies, and trade with the U.S. and the U.K was booming, even as Gadhafi proved he remained as unpredictable as ever.
The growing ties are clear, even if they don't sit well with the victims' families.
In February, a U.S. trade delegation came to Libya, headed by Assistant Commerce Secretary Nicole Lamb-Hale. The U.S. Embassy in Tripoli described the visit -- the first of its kind in some 30 years -- as "the latest example of the increasing importance of the economic and commercial relationship between the United States and Libya."
"I don't think (improving ties) has anything necessarily to do with Megrahi, but put another way -- if Megrahi had died in Scotland, I don't think relations would be going as well as they are," said Charles Gurdon, managing director of the London-based risk consultancy Menas Associates.
"It was one of the issues that needed to be resolved."
Trade has taken off. U.S. exports to Libya totaled $351.9 million in the first six months of 2010 compared to $33.26 million in the same period in 2009 and $39.2 million for all of 2004.
U.K. government figures show that British exports to Libya, excluding services, totaled $660 million in 2009, up 51 percent from 2008.
The victims' families say it was just a matter of business trumping justice.
"It was a question of justice, and the one little bit of justice they had was taken away" with al-Megrahi's release, said Frank Duggan, president of the Victims of Pan Am Flight 103, an advocacy group that represents some of the families of those killed.