In Backing Benghazi, U.S. Places Bet Against Qaddafi's Staying Power

Obama recognizes Libya's opposition movement in a high-stakes gamble

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The Obama administration’s decision to formally recognize Libya’s opposition movement as the country’s legitimate government represents a high-stakes gamble that Libyan strongman Muammar el-Qaddafi’s hold on power has weakened so much that funneling money and diplomatic aid to the rebels will finally bring about his ouster.

Libya’s Transitional National Council, headquartered in the eastern city of Benghazi, had already been recognized by dozens of countries, including key American allies such as Australia, Britain, France, and Germany. Still, the U.S. move on Friday will confer more than just additional diplomatic legitimacy on the rebels. It will also give the cash-starved rebels access to some of the roughly $34 billion in Qaddafi-related funds that the Treasury Department froze months ago and will clear the way for the United States to begin providing weaponry, armaments, and ammunition to the insurgents.

More broadly, the move—which Secretary of State Hillary Rodham Clinton announced in Istanbul on Friday—represents the clearest signal yet that the administration believes that Qaddafi’s time is running out.

“I am announcing today that, until an interim authority is in place, the United States will recognize the TNC as the legitimate governing authority for Libya, and we will deal with it on that basis,” Clinton said, to the applause of other diplomats. "Increasingly, the people of Libya are looking past Qaddafi. They know, as we all know, that it is no longer a question of whether Gaddafi will leave power, but when.”

The NATO-backed rebel offensive against Qaddafi loyalists has proceeded far more slowly than many American and European officials had expected, but observers say that the insurgents are steadily solidifying the control over eastern Libya while making inroads into the country’s west, including key areas on the road to the capital, Tripoli. Western officials believe that Qaddafi’s hold on power is weakening in the face of unrelenting NATO air strikes, waves of defections from his government and security services, and a cash crunch caused by foreign moves to freeze his regime’s financial assets.

“Qaddafi’s back is against the wall,” French Prime Minister Francois Fillon told his country’s Parliament earlier this week.

Other Western military and intelligence officials believe that the Libyan strongman is actively looking for ways of safely leaving Tripoli, a sign that even the mercurial Qaddafi realizes the game may be up.

Still, U.S. recognition of the TNC doesn’t mean that the rebels will immediately gain access to the $34 billion in Qaddafi-related funds frozen in American financial institutions as part of the largest such sanction in American history. Neither does it answer the key question of just how much money the insurgents—who have said they have immediate need for at least $3 billion—will eventually receive.

In an interview on Friday, a Treasury official said that Clinton’s announcement “helps pave the way toward making some of the frozen assets in the United State available to the TNC,” in effect signaling that it would not involve all of the funds frozen under the 1976 International Emergency Economic Powers Act.

The Treasury official also noted, “There remain legal issues that must be addressed, and in the coming weeks we will consult with the TNC and our international partners on the most effective and appropriate method of making additional significant financial assistance available to the TNC.”

The upshot is that it could be weeks, if not longer, before the rebels gain access to even a portion of the frozen money. Britain has seized an additional $50 billion in Qaddafi funding, and it is similarly unclear when the rebels will gain access to that, or in what amount.

In the meantime, the rebels and their staunchest backers hope that U.S. recognition will lead to a quick infusion of money. Speaking at the same conference as Clinton, Turkish Foreign Minister Ahmet Davutoglu said his government supported the rebels’ request for the immediate release of $3 billion of frozen Libyan assets to alleviate what he described as a "grave" humanitarian situation in contested parts of the country. The Obama administration has for months walked a cautious line on Libya, arguing that Qaddafi had lost all legitimacy and needed to step down but that the United States will not force him to do so. Freeing up some of Libya’s frozen money could make it easier for the rebels to oust Qaddafi on their own, which is why they are so relieved that Obama has at last decided to put his money where his mouth is.

This article is from the archive of our partner The Wire.