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Libya coerced US oil companies to pay for terrorism settlements, leaked cable shows

By Reuters
Thursday, February 24, 2011 10:15 EDT
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LONDON (Reuters) – Libya’s ruling family tried to coerce billions of dollars from Libyan and foreign oil companies, and its leader Muammar Gaddafi exhorted the United States to sow division in Saudi Arabia, leaked American diplomatic cables reveal.

One cable seen by Reuters, sent from the U.S. embassy in Tripoli, shows Gaddafi’s government exerting heavy pressure on U.S. and other oil companies to reimburse Tripoli the $1.5 billion Libya had paid in 2008 into a fund to settle terrorism claims from the 1980s.

The amount was the initial payment in a planned $1.8 billion fund. The cable suggests Gaddafi intended foreign oil companies to provide full funding for the scheme, which at the time was a key factor in improving ties between Libya and the United States.

Even before Libya paid into the fund, Gaddafi, “who prides himself on being a shrewd bargainer, made it clear that he intended to extract contributions from foreign companies to cover the … initial outlay,” according to the April 2009 cable titled “GOL ratchets up pressure on oil companies to contribute to U.S.-Libya claims fund.”

Senior Libyan officials met representatives of 15 oil producing and service companies — including Marathon, ConocoPhillips, Occidental, ENI, Total , Wintershall, PetroCanada, Repsol and StatoilHydro — to say they must contribute or Libya’s National Oil Corporation (NOC) would be compelled to “reconsider our relationship with you,” the cable says.

Prime Minister-equivalent al-Baghdadi al-Mahmoudi is cited as telling oil firms that if they did not comply, there would be “serious consequences.”

When Challenger Drilling’s representative said it would have legal difficulties if it chose to contribute to the fund, the officials “were quick to offer possible mechanisms that would allow (the companies) to circumvent such problems,” the cable said, citing a representative from Hess who later complained that “pressure had turned into coercion” at the meeting.

The instinct to ask oil companies for money was apparently not new. An earlier cable, sent in July 2008, relates how one of Gaddafi’s sons, National Security Adviser Muatassim al-Gaddafi, was demanding “$1.2 billion in cash or oil shipments” from the NOC itself.

The reported attempts by Gaddafi’s sons “to use the NOC as a personal bank” alongside doubts about prospects for meaningful reform, suggest “the regime remains unchanged with respect to the way it conducts key elements of its business,” says the cable headlined “National Oil Corporation chairman Shukri Ghanem may seek to resign soon.”

Muatassim may have intended to use some of the funds to establish a military or security unit akin to that of his younger brother, Khamis, and to pay for unspecified “security upgrades” he wanted to make in his capacity as National Security Adviser, the cable says.

Gaddafi had laughingly dismissed the claim, the cable says; but it cites a Libyan businessman outside the NOC as stating Gaddafi’s children are “undisciplined thugs”: “No one can cross or refuse such people … without suffering consequences, particularly when the matter is to do with money.”

“TOO MUCH FREEDOM”

The cables, obtained by WikiLeaks and seen by Reuters, also offer insight into Gaddafi’s views on regional neighbor Saudi Arabia.

One cable recounts how, in 2006, Gaddafi had urged the United States to call for “self determination” for tribal groups of Saudi Arabia, “who would presumably choose a government other than the present monarchy.”

Gaddafi’s comments came on a visit by the late Democrat Congressman Tom Lantos, then a member of the U.S. House Foreign Relations Committee, and were made in Gaddafi’s desert encampment on the outskirts of Sirte, according to the cable from August 2006 headlined “Congressman Lantos stresses bilateral achievements and regional challenges with Libyan officials.”

In an hour-long meeting, Gaddafi mainly expounded on the rise of Wahhabism in Saudi Arabia, “which has become one of his standard topics,” said the cable; he also lobbied for support for a plan to create “Isratine” — a secular Jewish-Palestinian state — as the best solution for lasting peace in the Middle East.

The cable separately recounts how a speech on political and economic reform by another of Gaddafi’s sons, Seif Al-Islam Gaddafi, had earned a rebuke from Egypt’s leader Hosni Mubarak. Lantos had congratulated Seif on his speech, it says. “Seif immediately noted that President Mubarak of Egypt called his father, the leader, to express his displeasure with the speech, saying it called for ‘too much change and too much freedom’ and warning that the country should be more conservative in its approach to change.”

Seif claimed not to know what his father’s reply to Mubarak was, the cable says, commenting that since the speech was broadcast widely on state-run media, it must have had the tacit blessing of the leader.

The cable also points to a bizarre sense of humor within Libya about the politics of dictatorship in the region. On the Lantos visit, it says, the delegation was shown an in-flight movie — an Egyptian film called “The Leader” — which makes fun of Middle Eastern dictatorships:

“Security personnel and a local translator confirmed that many of the jokes in the movie … could be aimed at Gaddafi or Mubarak, including a scene showing disregard for members of the cabinet,” the cable says.

It goes on to comment that “it is unclear if this was to show that the leader does in fact have a sense of humor about his monopoly on political power, or that a certain degree of toleration exists in Libya, or that the Libyans love a movie that pokes fun at Egyptian politics — if in fact the Libyans intended any message at all.”

(Editing by Simon Robinson)

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  • Anonymous

    Gee, other’s countries leaders aren’t morons, why ours?

  • http://twitter.com/btmfdrsheaven rebecca meritt

    I feel so bad for big oil being coerced by these thugs, it’s kinda like the thugs that are gonna make me pay $5 dollars a gal or I can just walk cause they’re not gonna do business with me. Jeebus,what goes around comes around!

  • http://pulse.yahoo.com/_KJJ4KEVT2Z5RDHTIRGJOUWL2EA Paul M

    Cable received by Reuters! Who owns Reuters? Spinning some truths with bold faced lies. Classic disinfo-journalism.

  • Anonymous

    Ahhh da poor oil companies got squezed for a few billion dollars.
    They would understand slightly better what the consumer is paying for their nasty products.
    (This happens all the time, big oil, big deals and the US gov’t in the middle. That’s why we will never, ever get aways from Oil, gas and coal even if the planet caught fire.)

  • lyris

    This may be the way to get rid of Gaddafi as we helped to get rid of Mubarak. Sometimes out of mistakes comes good.

  • lyris

    At the risk of driving the teabagging/gop/paranoids crazy, why doesn’t our government start getting involved in oil?

    I’d like to see gas stations owned by our government too. Imagine how our economy would improve, and the privately own would have to deal with not getting so much power. And wouldn’t have much hold on our government or us.

  • Anonymous

    And sometimes not. It remains to be seen. I for one would like to see us go out of the regime change business. But I don’t think we ever will.

  • Johnny Warbucks

    Well, there go so many tinfoil conspiracies. Oh, never mind, I forgot WikiLeaks itself is a conspiracy.

    I got a big scoop. Qaddafi made another incoherent rant on state teevee today. This time, he’s blaming Osama bin Ladden and Al Qaeda. The bastard is desperate. That was a message to the US to invade. He is being coached by his pal, the other tinpot dictator with the beard and big cigar. Oddly enough, the other one released one of diatribes blaming the Western media (the one that is not allowed in Libya. The same on he praised so highly for the coverage of Egypt), Israel, NATO and the barber who wouldn’t trim his beard right before Qaddafi’s speech. If the whole thing weren’t so morbid and tragic, it would be comic. Those two nuts on one side blaming everybody and the wolves on the other side, waiting and salivating. Those poor Libyans. How my heart aches for them! This is not Egypt.

  • Johnny Warbucks

    Don’t despair, Gerry. The winds of change are blowing. Besides, the US is broke. Caput. Done.

    http://www.nytimes.com/2011/02/24/world/middleeast/24saudis.html?_r=1&hp

    And consider the source. Imagine how things are really panning out.

  • http://profiles.yahoo.com/u/6EX2KJ7LSZMDCBZWCH62Q7CABY Sandra

    This is exactly how Reagen ramped up US support for the Libyan airstrike , false translations, false accusations blaming Libya for unrelated events (or even event the US committed), etc. It’s like a carbon copy of 1985-1986 and westerners are duping themselves again.

    If you see it on your nightly news, 70% of what you saw is bullsh*t.

  • http://profiles.yahoo.com/u/6EX2KJ7LSZMDCBZWCH62Q7CABY Sandra

    Ahem, consider WHERE you heard it from.

  • Johnny Warbucks

    I hope you’re wearing the tinfoil. I heard the gamma rays are particularly strong today.

  • Johnny Warbucks

    Yes, Al Jazeera. The same Al Jazeera that reported the Egypt protests. Are you objecting to those too or no?

  • alfredo

    We govern by the golden rule. That’s why those who have the gold rule. It’s not that they are morons exactly, although they are. They do what is in their interest not ours.

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