Exit the Colonel (29 page)

Mustafa Ben Halim described an episode that provides an interesting parallel. In his memoirs, he questions whether he should have been more bold in resisting then prime minister Hussain Yusuf Maziq in pushing for a change from a monarchy to a republican form of government, in the late 1950s.

Ben Halim ties weak-hearted or incomplete efforts, or the fear of insufficient resolve by both the king and reformists to combat corruption and devolve power to the lower house and the cabinet to an atmosphere conducive to Gaddafi's 1969 coup.

Of course, circa 2009, the cast of characters was quite different. Instead of a kindly, paternalistic monarch who hated to say no to any supplicant, there was Colonel Gaddafi, who had an entirely different approach than mild-mannered King Idris. At the same time, many more of Saif 's contingent were clearly asking themselves what might have transpired if Saif had either the will or, perhaps more relevant, the ability to push his father harder to accede to the creation of a new constitution and concrete steps to devolve power from the Gaddafi regime to more formal organs of state. Ben Halim notes that during both the monarchy period and the rehabilitation, the US and the West had chosen the side of the status quo over attempting to encourage change:

The years following the 2003 WMD deal were mixed for Gaddafi. Suddenly, he had to cope with any number of issues that he probably had not anticipated and for which he had not developed a consistent plan. Saif had played his role well, regardless of how committed he was—or could be—to making sure the reform program was implemented. Those in his orbit, hearing his transient confessions, said he felt he had committed himself to an impossible task; the combined forces of his father, his ambitious and violent
brothers, and his father's regime fanatics were not conducive to a smooth transition. While these elements had appreciated or been told to appreciate the role of very circumscribed signaling reforms, Saif had clearly gone beyond what those invested in the regime were willing to stomach. Again, regardless of his exact feelings and motives—which were likely complex—Saif had over the course of six years managed to provide some cover to those demanding acknowledgment of past abuses (like the Abu Selim victims and their lawyers) and academics and journalists who criticized the excesses and financial abuses of regime figures. By antagonizing those opposed to real reform, giving the masses a heightened sense of political awareness, and cultivating a group of people who appeared willing to follow this path, Saif had clearly demonstrated the limits to reform, as well as a tantalizing glimpse of “what might be.”

With Saif spending increasing time in London, and voicing both public and private doubts about his political future in Libya, foreign diplomats began to pick up the thread that Saif was, in fact, losing the battle for reform with his brothers and the murky group of regime reactionaries with strong tribal connections.
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It was, after all, Mu'tassim, not Saif, whom Gaddafi sent on the first official trip to the States in 2009, as a minister no less. By some standard logic this would suggest that, indeed, Saif was on the outs: the Colonel perhaps had given Saif as much rope as he was comfortable giving, or ever wanted to give, or was being pressured by those who had done his dirty work for the previous three-plus decades to pull back, before Saif created a situation that the regime could not control. Or perhaps Gaddafi was just enjoying playing the games he always played.

From 2008 to 2010, Gaddafi apparently had given Saadi another chance to prove his leadership credentials, or, alternately to occupy himself respectably, entrusting him with the overall management of a multibillion-dollar initiative informally called the “Zwara Corridor,” encompassing a 40-kilometer stretch of coastline between Zwara and Ras Jedir.
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Following the spirit of Monitor's “economic clustering” recommendations, the Zwara Corridor was to serve as a hybrid industrial/export zone, and include a quarantine zone for alcohol-guzzling, beach-going tourists. (Unlike in Dubai, where foreigners can drink alcohol in hotels, Gaddafi had been adamant that Libya remain officially dry.)

In 2010, a number of foreign firms considered investing in this area, less for what they could do there, than as a lever into more promising contracts elsewhere in the country. The Zwara project put Saadi on a collision course of sorts with Saif, who was far more powerful, and Hannibal, whose fiefdom was maritime and port affairs. Saif had been actively courting (and been courted by) the Port of Houston for a series of port management contracts (one of which involved a proposed port at Homs, within the corridor); Saadi had done the rounds of the Gulf-based port operating companies, attempting to secure their support. Senior Libyan businessmen would confess in winter 2010 that the Zwara project was a complete mess, not only for these heightened family rivalries, but for Saadi's failure to find investors for the cornerstone refinery. Saadi did not have nearly the clout of Saif, and indeed would have needed Saif's support to move these projects forward—and yet Saif 's own long-term position in this constellation was far from clear.

Meanwhile, Mu'tassim was pressuring various of Gaddafi and Saif 's men—Shukri Ghanem first—to transfer state money into his own personal accounts so he could augment his personal militia (the one he used to shut down the Caterpillar plant back in 2005), and outgun that of his brother Khamis (the 32nd Brigade). Even as those on the outside saw Saif's star falling, Mu'tassim may well have been chipping away wildly at whatever increased confidence he may (or may not) have won from his father. Abdelrahman Shalgam, in his post-Revolution memoir on the people within Gaddafi's circle, claims that Mu'tassim had tried to intimidate Prime Minister Baghdadi Ali Mahmoudi into linking the budgets of various ministries, including Foreign Affairs, into his [Mu'tassim's] new Ministry of National Security.
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Shalgam says he urged Baghdadi to overcome his hesitation and inform the Leader of Mu'tassim's actions. Shalgam says he believes that conversation took place as Gaddafi sacked Mu'tassim sometime in late 2010, months or weeks before the Revolution. This could, in part, explain Gaddafi's subsequent reliance on Saif during the Revolution to make certain decisions (still unclear) and what appeared from television interviews and his actions to be highly varying emotional states. Anecdotal accounts paint a picture of chaos in the Gaddafi household, with Gaddafi quasi-catatonic, Mu'tassim out of control, and no one Gaddafi firmly in charge. As of February 15, 2011, Saif may well have found himself, suddenly, ruling Libya, with very little real life preparation, and under the worst circumstances possible.

CHAPTER 8

On the Eve of Revolution

CONTROL RISK GROUP

 

 

 

I
n the few months leading up to the revolution, the situation in Libya was almost as mysterious as before the rapprochement. On a macro level, Libya was growing fast; there had been some symbolic, if not always meaningful, economic reforms. At the same time, Gaddafi was clearly unleashed and exercising little restraint in his words and deeds. Many of the principal advocates of deeper, structural reforms, from Saif down, appeared to have been stopped in their tracks, while more aggressive family members, Mu'tassim in particular, and old-guard regime agents pressed their case that Gaddafi was taking the country down a dangerous path. Libya was moving forward with some bilateral relationships, such as with Italy (largely by dint of Gaddafi's close personal friendship with Silvio Berlusconi, arguably Europe's most flamboyant prime minister). But relations with the US were suffering a potentially dangerous malaise, also linked to personal issues, largely Gaddafi's feelings that the US—and the US president—was not only ignoring but outright disrespecting him.

Assessing the health of Libya in 2009–2010 depended highly on one's perspective. To the Western commercial community, the country appeared to be entering a kind of postpartum optimism. In an era of economic stagnation, “[a]t a time of global gloom, Libya is a rare source of light,” wrote Heba Saleh in a 2010 feature for the
Financial Times
.
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The economy had
been booming for four years, fed by high oil prices and rising foreign direct investment. From 2004 to 2010, average growth in GDP hovered around 5 percent; foreign reserves rose from $20 billion in 2003 to $170 billion at the end of 2010.
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The Libyan government announced it would be spending $46.6 billion on infrastructure in 2010, up 32 percent from 2009, and a commitment of $66 billion to new infrastructure between 2010 and 2012. Of that, $10 billion would go to upgrade Libya's ports; $5 billion for industrial development; $2.5 billion for civil aviation and upgrading airports in major cities of Tripoli, Benghazi, and Sebha; and $1 billion for a new rail system.
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The US construction company AECOM, which had entered the country in 2007, was by 2010 overseeing 265 contracts, covering 146 infrastructure projects in 41 cities and towns in Libya, with 300 more planned by 2020.

The Old City, long a reminder of the neglect that the regime had inflicted on the Libyan population and culture, was in full bloom, its bidonvilles or shanty towns cleared forcibly to make way for boutique hotels, shops, and restaurants; the skyline started to resemble that of Dubai in the early 2000s, with building cranes everywhere. The range of consumer goods and outlets available continued to increase, with the addition of boutique outlets like Marks & Spencer. (The agent for Marks & Spencer was Husni Bey; Gaddafi's men forced the closure of the upscale boutique at least once, on the grounds that it was a Jewish enterprise, or that Bey had not paid the proper taxes.)

In 2009, more than five years since Libya had been reintroduced to the international community, progress had been made on many fronts. While Libya did not experience the depth of privatization promised in 2004, there was progress in some non-oil sectors, including banking, where six of sixteen national banks had been privatized. In 2006 the original 1998 investment law was amended, lowering minimum requirements for foreign direct investment from tens of millions of dollars to a far more reasonable figure. The Ministry of Investment and Trade appeared to be adding constantly to both commercial and labor laws, although much of the legislation was open to interpretation, given contradictory statutes and the lack of a unified code.

Upon closer examination, some of Libya's economic successes were considerably less impressive. Overseen by Saif, with the help of his close friend Mustafa Zarti, the Libyan Investment Authority (LIA), which for a time effectively managed Libya's estimated $200 billion sovereign wealth
fund, made a series of very poor calls during its first foray into international capital markets just before the global recession hit in 2008. Goldman Sachs allegedly lost more than $1 billion in LIA funds on risky trades (the Libyans allegedly threatened to put a “hit” out on the young trader responsible).
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Weeks before the venerated US investment bank Lehman Brothers collapsed, an internal effort was made to broker an LIA-backed rescue, but when the LIA representative showed up, Lehman Brothers rebuffed the approach on the grounds that Libya did not fit the company's “investor profile” (i.e., Libya's was dirty money). As the crisis progressed, a few weeks later, Lehman executives reconsidered and tried to get LIA back into talks, but it was too late—LIA would have nothing to do with the rapidly failing Lehman. The Libyans apparently by this point felt Lehman was itself “dirty money.”
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Beneath the impressive economic numbers, those in a position to advise the Gaddafi family (particularly Saif) became concerned. In an interview with
Asharq Al Awsat
, Mahmoud Jibril said that, while he had been head of the economic development board, he had urged Gaddafi to push forward the opening at a faster pace or risk an implosion: “I went to him in Ramadan 2009 and spoke with him for an hour and 45 minutes. For most of this he said nothing, then he said: ‘We will cancel the government and distribute the wealth. Be patient: two months and everything will be finished.'”
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