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Wednesday, February 23, 2011

Searching the leaked U.S. cables
Here is a handy way of searching the Wikileaks cache of leaked State Department cables:
http://dazzlepod.com/cable/

And there is also the search option provided by Aftenposten:

Søk i Wikileaks-dokumentene

http://www.aftenposten.no/nyheter/uriks/wikileaks/

Type in the English keyword (the cables are all in English).

QADHAFI INC.

This cable was found, for example, on Dazzlepod.
(Scroll down past numbers to body copy.)

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R 100926Z MAY 06
FM USLO TRIPOLI
TO SECSTATE WASHDC 0829
INFO ARAB LEAGUE COLLECTIVE
AMEMBASSY VALLETTA 
AMEMBASSY ROME 
DEPT OF COMMERCE WASHINGTON DC
USLO TRIPOLI

********************************************************************************

S E C R E T  TRIPOLI 000198 

DEPARTMENT FOR NEA/MAG, NEA/PI 
LONDON FOR TSOU 

EO 12958 DECL:  4/26/2016 
TAGS ECON, ECIN, ETRD, PGOV, LY 
SUBJECT: QADHAFI INCORPORATED 

REF: TRIPOLI 33, 53

CLASSIFIED BY: Elizabeth Fritschle, Pol/Econ Chief, U.S. Liaison Office, Department of State.
REASON: 1.4 (b), (d)

¶1. (C) SUMMARY. Qadhafi often speaks out publicly against government corruption, but the
politically-connected elite has direct access to lucrative business deals. This commercial access
can easily be cut off when individuals fall out of favor. The Qadhafi family and other Jamahiriya
political favorites profit from being able to manipulate the multi-layered and regularly shifting
dynamics of governance mechanisms in Libya. They have strong interests in the oil and gas sector,
telecommunications, infrastructure development, hotels, media distribution, and consumer goods
distribution. The financial interests of Qadhafi and his key allies present both opportunites and
challenges for reform efforts in Libya. Any reform is likely to be cyclical over the long-term. END
SUMMARY

--------------------------------------- 
Saif’s Call For Freedom of the Press Equals Net Profit
--------------------------------------- 

¶2. (C) As with many other regimes, politically-connected members of the Libyan elite have direct
access to lucrative business contracts. Qadhafi often speaks out publicly against government
corruption and sometimes dismisses officials who are caught in gross improprieties. In some cases,
it appears that falling out of favor politically can trigger the discovery of improprieties in
business dealings that might not otherwise come to public attention. As reported reftel, Saif
al-Islam’s One-Nine group will reportedly start marketing foreign publications in Libya in the near
future. The Qadhafi Foundation, Saif’s quasi-NGO, is hailing the move as an example of freedom and
reform in the Jamahiriya. XXXXXXXXXXXX The Qadhafi family will clearly accrue significant financial
gains from having exclusive rights to distribute foreign press in Libya, as well as effective
censorship over any troubling articles that might appear. The One-Nine group gets it name from the
September 1, 1969 anniversary of the Muammar Qadhafi-led military coup that overthrew King Idris.

---------------------------------------- 
Oil and Gas Revenues Channeled to Qadhafis and Political Elite
------------------------------------------- 

¶3. (S) All of the Qadhafi children and favorites are supposed to have income streams from the
National Oil Company and oil services subsidiaries. Saif is involved in oil services through
One-Nine Petroleum and other Qadhafi family members and associates are believed to have large
financial stakes in the Libyan Tamoil oil marketing company based in Europe and Oil Invest.
AbdelMagid al-Mansuri, the former “director” of One-Nine Petroleum, was responsible for the
ill-executed “U.S.-Libya Economic Forum” held at the Corinthia Hotel December 2004. The Forum was
viewed as a blatant attempt to tie up lucrative percentage deals for Libyan elites looking for
representative relationships with U.S. companies. During 2004, the internet-based publication Libya
al-Yown distributed information tracing a large number of sweetheart deals to One-Nine’s Oil and Gas
division XXXXXXXXXXXX in Scotland, home to a well-connected Libyan expatriate community. It is
believed that millions of dollars are distributed to politically connected Libyans and Libyan
expatriates via the XXXXXXXXXXXX. XXXXXXXXXXXX

--------------------------------------------- ---- 
Aisha Competes with Saif on Charitable Activities and Broad Commercial Interests
--------------------------------------------- ---- 

¶4. (C) Dr. Aisha Muammar Al-Qadhafi, General Secretary of the Wa’atassemo Charity Society, is
patron of the December 4-7, 2006  Infrastructure Libya: The International Exhibition and Forum for
Libya’s Infrastructure and Economic Development implemented by the UK conference organizer
Montgomery and Associates. Also listed as cooperating organizations are the General People’s
Committee for Planning, the General Board of Infrastructure and Urban Development, and the Inspector
General of Housing and Utilities. At the same time, there will be a U.S.-Libya Oil, Gas and Energy
Exhibition and Forum at the same International Fairgrounds, also under Wa’atassemo sponsorship, and
coordinated by U.S. company Nathan and Associates. Until recently, Aisha has been in the public eye
based on charitable activities, sponsoring human rightsseminars and the situation in Iraq (with a
distinct focus on the negative effects of the presence of U.S. and foreign troops), signing up for
the international advisory board for Saddam Hussein’s defense strategy, and promoting social welfare
for women and children. She now appears to be branching out into areas that will give her more
direct connections with the energy and construction sectors, especially since the government has
announced that housing development will the major focus of the 2006 budget distributions.
XXXXXXXXXXXX said that Aisha was actively looking to branch out into other areas, perhaps because of
her recent marriage to a Qadhaf al-Dam with additional business interests.  Aisha is also reported
to have financial interests in the private St. James Clinic of Tripoli, one of the two most
trustworthy medical facilities that supplement the unreliable health care available through public
facilities. In addition to health care management and referrals to hospitals to Malta and elsewhere
in Europe, the clinic has an extensive aesthetic surgery practice.

--------------------------------------------- ------ 
Competition Between Siblings led to Takeover of Coca Cola Plant
--------------------------------------------- ------ 

¶5. (C) The recent controversy over the Coca Cola plant in Tripoli also highlighted Qadhafi family
involvement in commercial enterprise. While three different sons Saadi, Mohammed and Mutassim, were
all rumored to be fighting at different points over who had the right to the representative license,
the dispute was supposedly argued before the courts and resolved through mediation. The very twisted
tale of the Coke franchise, reported in Tripoli 53, continues to confound the local business and
diplomatic community attempts to ascertain exactly what interests are in play. One well-connected
consumer goods distributor said that Qadhafi’s son Mutassim was involved in setting-up the Coca-Cola
franchise held by the Egyptian Ka’Mur group during the late 1990s.  XXXXXXXXXXXX Supposedly,
Mutassim lost control of many of his personal Libyan business interests during the period of 2001 to
2005 when his brothers took advantage of his absence to put in place their own partnerships.
Mutassim was recently spotted by Pol/Econ Chief arriving on a British Air flight at Tripoli
International Airport, greeted by a small group of well wishers and protocol assistants with
bouquets of flowers, then whisked off to the VIP arrivals lounge and into his vehicles without
passing through customs or immigration. Qadhafi son Mohammed heads the Libyan Olympic Committee that
now owns 40% of the Libyan Beverage Company, currently the Libyan joint venture Coca-Cola
franchisee. The British Ambassador to Libya reported his sources attributed the resolution to a deal
whereby Mohammed Al-Qadhafi was prevailed upon to relinquish his/Libyan Olympic Committee’s share of
the joint venture and sign it over to the Libyan Pensions Fund. Another Ambassador chimed in that he
heard it was sister Aisha Al-Qadhafi who mediated the dispute between the two brothers and got
Mohammed out of the soda business. If Libyan government officials are asked about the Coca Cola
case, the standard response is that the government was making sure that all the proper licenses and
registrations were in place.

---------------------------------------- 
Telecommunications Controlled by Mohammed
------------------------------------------ 

¶6. (S) Mohammed, who has plenty to keep him busy through his control of the General Post and
Telecommunications Committee, has major input over any telecomm or internet service. Frequent USLO
requests over the last two years to meet with the GPTC have been ignored by the Libyan government,
even requests for meetings with senior U.S. officials and Congressional delegations. Several U.S.
companies are actively pursuing contracts to provide a much-needed upgrade to the local
telecommunications network, but the Libyan government rejects any trade promotion activities for
telecom through official government channels. Based on Colonel Qadhafi’s experience overthrowing
King Idris and the recognized importance of controlling radio broadcasts in 1969, and the role of
mobile phone networking during the 2006 Benghazi riots, the family would definitely want to preserve
its strong control over the telecom sector.

------------------------------------ 
New City Planned by Saadi
------------------------------------- 

¶7. (S) Saadi is also branching out into infrastructure development. His functionaries contacted
USLO public affairs section for publications in Arabic language on economic and commercial issues.
Saadi’s staff then notified USLO that he planned to establish “a new city in the west of the
country, in the area between Zwara and the Libyan-Tunisian border. The new city will be under the
management and supervision of the Engineer al-Saadi al-Qadhafi.” As Saadi’s staffers frame the
interest, “he wants information on how the U.S. can help with this matter.” That general area of
coastline has an island that has been slated for tourist development in the last couple years
without any subsequent action, perhaps because a large oil processing facility mars the view from
the island, and also because outside investors can not get liquor licenses for hotels populated by
foreign tourists. The Qadhafi family is already in the tourism business through the large percentage
of ownership in the XXXXXXXXXXXX

------------------------------------------- 
Consumer Goods Distribution Controlled by Few Family Holding Groups
------------------------------------------- 

¶8. (C) Food distribution is also reportedly controlled by only four or five politically-connected
families. There are no large western-style food markets in Libya. There is small western-style
market in Tripoli and some smaller shops in the city that carry more imported items, but most of the
neighborhood shops go to the distribution warehouses controlled by the people with strong government
ties. The consumer products distribution are largely controlled by three merchants, including the
Husni Bey Group, a diversified holding company that runs a range of operations under the direction
of Husni Bey’s children. Bey does not characterize his company as politically well-connected, but
has learned to expand operations through key alliances and he knows how to work the system to his
benefit. More importantly, he knows how to recover when his businesses get caught up in the
financial interests of the more connected political elite. The Akida Group, run by the Akak family,
is rumored to have close ties to the ruling regime and it runs a virtual monopoly over air
conditioning equipment, heating units, and small appliances as the local LG agent.

¶9. (C) The government attempts during the 80s to instigate large socialist-style department stores
failed; the shells of the state enterprises sit empty around Tripoli and other Libyan cities. (At
least one is rumored to soon be rehabilitated as a modern shopping mall for privately owned stores.)
Starting in the mid 90s, people were once again allowed to open small businesses. During Eid
holidays, Libyan families buy new clothing to wear during the celebration and treat children to toys
and sweets from small stores. The men tend to wear traditional embroidered wool robes produced
locally or in Egypt or Syria, while women may indulge in new fashions imported from European or
Asian manufacturers. During the January 2006 Eid, local women complained that the clothing variety
available in the local shops was limited. Rumors circulating in Tripoli claimed that Qadhafi’s
second wife, as well as his daughter Aisha, own or have financial interests in many of the new
clothing stores opened in the post-sanctions era. XXXXXXXXXXXX Most of the garments in local stores
are imported from China, Malaysia and India. Small boutiques have a limited supply of expensive
goods imported from Europe, and these enterprises in particular seem to have the financial backing
of people with strong ties to the ruling elite.

------------------------------------------ 
Qadhafi Incorporated Lifestyle
------------------------------------------ 

¶10. (C) Qadhafi himself keeps a low profile in Tripoli. The Bab al-Azizia compound has facilities
for banquets and other public events, but it is not lavish in any way compared with the ostentation
of the Gulf oil state families or Hariri clan. Qadhafi’s wife travels by chartered jet in Libya,
with a motorcade of Mercedes waiting to pick her up at the airport and take her to the destination,
but her movements are limited and discrete. She hosted a banquet for diplomatic women in the Bab
al-Azizia compound on the occasion of the al-Fatah (Revolution) holiday in September that was
festive but not extravagant. Since the family keeps a tight control on the media and most of the
Qadhafi children spending excesses take place outside Libya, there is not much public reaction to
the coffers of Qadhafi Inc.  Compared to egregious pillaging of State coffers elsewhere in Africa,
or the lavish spending of Gulf Arabs, the Libyans don’t see much to complain about in their leader’s
lifestyle, as long as he does a good job of making sure other people get a piece of the pie. And
when Libyans do complain, they are removed from access to financial rewards.

------------- 
Comment
------------- 

¶11. (S) The financial interests of Qadhafi and his key allies present opportunites and challenges
for reform efforts in Libya.  At a minimum, it seems safe to say that reform will have its ups and
downs over the long-term, as individual, regime and national interests come into play. If and when
foreign publications do become available in Libya, there will be a financial gain for Saif. At the
same time, the family will still have control over monitoring what information is released to the
public. Over the long term, demand for more outside information would inevitably create pressure for
open access and more press freedom. Similarly, Libya has a stated commitment to moving forward with
WTO accession and joining international financial organizations. But it is doing so on its own
timetable, a slow timetable. Reported septel, the General People’s Congress just passed in April
2006 new agency and representation rules that run counter to WTO principles. While the General
General People’s Committee for Economy and Trade has working groups actively revising legislation to
prepare for WTO accession, it will take some time to reconcile all the different structures of the
Jamahiriya government (translation: “State of the Masses”). Libyan government officials have been
telling P/E Chief for 10 months that the WTO accession will be presented in Geneva “in a few weeks,
that only the translation has to be finished.” Institutional development is very primitive and the
Libyans have a cultural and social preference for elements of distributive economy, placing great
value on financial rewards that flow from affiliation with regime leadership, security services etc.
There was a shipment of BMWs delivered to the government in early 2006, for example, and it seems
likely that the young men driving them around town got the vehicles “distributed” through their
affilation with different government entities. With regard to reform partnership efforts, there are
the greatest opportunities to promote positive change by engaging in the Central Bank’s efforts to
establish banking controls and standards, partnering with the General People’s Committee for
Manpower and Training on civil service reform, and cooperating with the General People’s Committee
for Economy and Trade in its WTO accession efforts.

BERRY GOLDRICH

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