Moammar Gadhafi's aides in 2009 demanded U.S. firms make huge payments to Tripoli to help foot its $1.5-billion settlement for Lockerbie bombing victims or risk losing lucrative contracts in Libya, The New York Times reported Thursday.
Moammar Gadhafi's aides in 2009 demanded
U.S.
firms
make huge payments to
Tripoli
to
help foot its $1.5-billion settlement for Lockerbie bombing victims or risk
losing lucrative contracts in
Libya
, The
New York Times reported Thursday.
Libyan officials warned executives that if the companies -- many of them global
energy giants -- did not comply, there would be "serious consequences"
for their oil leases, according to a State Department report on the meeting
cited by the newspaper.
The extraordinary request by the Gadhafi regime and the Times report highlight
Libya's culture of corruption and political patronage that has swelled since
2004, when the United States re-opened trade relations with Tripoli and
multinationals scrambled to exploit Libya's vast oil reserves.
Gadhafi and sons manipulated U.S. firms eager to operate in the North African
nation, reportedly amassing a multi-billion-dollar stash that has helped the
embattled regime stay in power, even as Western airstrikes pound Libyan forces
and rebels mount a challenge to Kadhafi's four-decade rule.
"
Libya
is a
kleptocracy in which the regime -- either the Gadhafi family itself or its
close political allies -- has a direct stake in anything worth buying, selling
or owning," one State Department cable read.
Business interest in
Libya
surged in 2008 when
Tripoli
reached a settlement over the country's role in the 1988 Pan Am bombing over
Lockerbie
,
Scotland
.
The Times said at least a dozen major
U.S.
firms
sought to gain a foothold in
Libya
,
including Boeing, Raytheon, ConocoPhilips, Occidental, Caterpillar and
Halliburton.
Many of the firms balked at paying
Libya
's terrorism
settlement, but a February 2009 State Department cable said that when the
regime made its demand, executives suggested "smaller operators and
service companies might relent and pay."
Several industry executives and a person close to the settlement, all of whom
declined to be identified, said the payments went through, but they declined to
name the firms, the Times said.
Some major companies struck expensive deals with the government. In 2008,
U.S.-based Occidental Petroleum shelled out a $1.0 billion "signing
bonus" to Libya as part of a 30-year deal, while Canadian oil giant
Petro-Canada made a similar payment in 2007, the paper said, citing cables and
company officials.
Caterpiller also became ensnared in
Libya
's
strong-arm tactics.
It was on the verge of signing an equipment deal in 2009 when
Libya
demanded Caterpillar partner with a firm controlled by the Gadhafis. The
machine maker resisted, and was blocked from the work, the paper said, citing
the State Department.
Juan Zarate, a former top White House official in president George W. Bush's
administration, said Washington made "a deal with the devil" when it
resumed business with Libya in 2004.
"The hope was that with normalization, Gadhafi would serve less as the mad
dog of the
Middle East
and more as a partner,"
he told the Times.
"But I don't think this is the way anyone would have wanted it to work
out."
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