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US seeks to use Qaddafi’s seized funds to aid Libyans as conflict reaches stalemate

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The Obama administration wants to use some of the billions of dollars in frozen assets belonging to Libyan leader Muammar Qaddafi and his government to provide humanitarian and other assistance to Libyans affected by the ongoing civil war, US Secretary of State Hillary Clinton said Thursday.

The move, announced at a high-level meeting in Rome on how to shore up Libya’s bedraggled rebels, appeared to be the first time a country had sought to tap some of the massive Libyan wealth blocked by UN sanctions in February, according to The Washington Post.

Secretary Clinton, speaking with leaders from NATO and Arab countries, said the Obama administration would seek congressional approval to allocate the frozen funds—a standard legal procedure under US law. She did not say how much money was involved, or whether it would go to the rebels battling Mr. Qaddafi’s forces or to international humanitarian organizations.

Following the meeting, the United States announced that it would impose financial sanctions on three companies owned by Colonel Qaddafi’s government.

London-based Dalia Advisory Ltd, Libya’s state broadcasting company and Lafico Algeria Holdings, an Algeria-based subsidiary of the Libyan Arab Foreign Investment Company, were added to the US sanctions blacklist.

The sanctions prohibit US transactions with the firms and seek to freeze any assets they may have under US jurisdiction.

Dalia is owned by the Libyan Investment Authority (LIA), which was established in 2006 to manage the country’s oil revenues. In mid-March, the LIA and the Libyan Arab Foreign Investment Company were sanctioned by the United States.

Thursday’s meeting of the so-called Libya Contact Group brought together foreign ministers from various countries involved in the anti-Qaddafi campaign, including France, Britain, the United States, Italy and Qatar as well as representatives of the Arab League and the African Union.

As the conflict in Libya has ground into stalemate, the revolt’s Transitional National Council, which controls the region of eastern Libya around Benghazi and has been recognized by both France and Italy, appealed for loans of up to $3 billion.

But efforts to unblock state assets frozen in overseas accounts, or to allow the protesters to get past UN sanctions that prevent their selling oil on international markets, have been held up.

“It’s not easy. There are Libyan assets that are frozen and for legal reasons unfreezing them is difficult,” Foreign Minister Alain Juppe of France told France 24 television on Wednesday.

The plan is to set up a type of “trust fund... under international control” that would aid Libya’s opposition, said Foreign Minister Franco Frattini of Italy, according to Agence-France Presse.

Mahmoud Shammam, chief spokesman for the transitional council, said the protesters urgently needed $1.5 billion to cover immediate running costs, according to Reuters.

“We need this for medical supplies, for food supplies, to keep the minimum functions of normal life—electricity, running hospitals,” he said.

Other protesters have spoken of needing $2 billion to $3 billion to try to shore up an administration created from scratch with no substantial sources of funding, and to pay the state salaries on which most people depend.

Mr. Juppe said the Rome meeting would also try to build contacts with defectors from Colonel Qaddafi’s government and officials who want to leave it. “There are a lot of officials from Tripoli who want to talk. We are going to try to coordinate,” he said.
The Rome meeting was preceded by a press conference given by Mr. Frattini and Ms. Clinton that dealt with the military situation on the ground, which is being handled by the NATO alliance, AFP reported.

Signs of impatience with the coalition’s lack of coherence have emerged. President Nicolas Sarkozy of France is planning a separate conference of the “Friends of Libya” in the coming weeks to discuss the future of the country.

Of particular concern is the fate of civilians in the surviving pockets of resistance to Mr. Qaddafi in cities in western Libya such as Misrata and Zintan.

An aid ship defied shelling by Colonel Qaddafi’s forces on Wednesday to rescue African and Asian migrant workers from Misrata but was forced to leave behind hundreds of Libyans desperate to flee the fighting.

Misrata, a city of half a million people, has been under siege for more than eight weeks.

Aid workers scrambled to embark the migrant workers, along with journalists and the wounded, on the ship bound for revolt-held Benghazi as the port came under bombardment.

The Red Star One, sent by the International Organization for Migration (IOM), had been waiting for days to enter port because of mines laid by Colonel Qaddafi’s men. The IOM had hoped to evacuate 1,000 people but the ship had to leave with only 800 on board.

About 12,000 people have so far been rescued from Misrata, where food and medicines are running short and government shelling and snipers have killed hundreds of people.

The United States on Wednesday condemned the continued shelling of Misrata and called on Mr. Qaddafi’s forces to permit the IOM to resume evacuating wounded people from the port.

The insurgents trying to topple Colonel Qaddafi, 68, after 41 years in power had hoped for a swift victory, akin to the ousting of the leaders of neighboring Egypt and Tunisia by popular uprisings.

The United States, Britain and France, leading a NATO air campaign, say they will not stop until Colonel Qaddafi is toppled.

International Criminal Court prosecutor Luis Moreno-Ocampo said he would request three arrest warrants for the killing of pro-democracy demonstrators after amassing evidence including photographs, video and testimony by government insiders.

“Crimes against humanity have been and continue to be committed in Libya: attacking unarmed civilians including killings and persecutions in many cities across Libya,” he told the UN Security Council in New York.

“As early as January, mercenaries were being hired and brought into Libya,” he said.

He did not name his suspects but several UN diplomats and independent rights experts said Mr. Moreno-Ocampo might want Mr. Qaddafi and his son to be served arrest warrants.

(Mustapha Ajbaili of Al Arabiya can be reached at: Mustapha.ajbaili@mbc.net. Abeer Tayel of Al Arabiya can be reached at: abeer.tayel@mbc.net)