AL-QADHAFI: THE PHILOSOPHER-KING KEEPS HIS HAND IN

C O N F I D E N T I A L SECTION 01 OF 04 TRIPOLI 000068

SIPDIS

DEPT FOR NEA/MAG (JOHNSON),INR/NESA (HOFSTATTER) AND S/P
(BEHRMAN)

E.O. 12958: DECL: 1/27/2019
TAGS: PGOV PREL ECON EFIN KCOR PINR LY
SUBJECT: AL-QADHAFI: THE PHILOSOPHER-KING KEEPS HIS HAND IN

REF: A) TRIPOLI 37, B) 08 TRIPOLI 994, C) 08 TRIPOLI 0036,
D) 08 TRIPOLI 481, E) 08 TRIPOLI 530, E) 08 TRIPOLI 478 (NOTAL),
F) 08 TRIPOLI 515, G) 08 TRIPOLI 227, H) 08 TRIPOLI 896,
I) 08 TRIPOLI 936, J) TRIPOLI 0017

CLASSIFIED BY: Gene A. Cretz, Ambassador, U.S. Embassy -
Tripoli, U.S. Dept of State.
REASON: 1.4 (b),(d)



1. (C) Summary: Despite a carefully cultivated image as a
philosopher-king with no formal title and persistent rumors that
he is relinquishing day-to-day decisionmaking as part of an
orchestrated succession by one of his sons, Muammar al-Qadhafi
remains intimately involved in the regime's most sensitive and
critical portfolios. He has used an influential but obscure
administrative entity to politically vet commercial contracts
involving GOL funds and ensure that opportunities to extract
rents from those contracts are distributed to key regime allies.
In addition to his activist role in commercial affairs,
al-Qadhafi's recent interventions in other high-profile issues
undermine the claim that he is an oracle above the fray. He
personally briefed GOL officials before their discussion with
U.S. counterparts on the disposition of eight C-130H aircraft
Libya purchased in the 1970's, but never took delivery of
because of deteriorating bilateral ties. He has taken a close
interest in sensitive human rights cases, and appears to be the
author of the regime's position on detained human rights
activist Fathi el-Jahmi and the GOL's heated response to
Emboffs' request to visit a predominantly Berber town. Although
he has done so quietly, al-Qadhafi has also played an active
role in the process of political-economic reform currently under
discussion in Libya, to include personally selecting members of
a committee reviewing a draft constitution and urging
conservative regime elements not to oppose possible upcoming
elections. Part of his involvement stems from the fact that the
Jamahiriya system has few formal decisionmaking structures and
opaque lines of authority. Another aspect is that Libya remains
a kleptocracy in which the regime has a direct stake in anything
worth buying, selling or owning. Al-Qadhafi's mastery of
tactical maneuvering has kept him in power for nearly 40 years;
however, the unholy alliance of corruption and
cult-of-personality politics on which the system has been based
is ultimately limiting. Squaring the circle between an old
guard whose livelihood depends on the status quo and a new, more
predictable and transparent system in which a greater number of
ordinary Libyans can productively participate is the key
challenge facing al-Qadhafi in the autumn of his reign. The
reality is that no potential successor currently enjoys
sufficient credibility in his own right to maintain that
delicate equilibrium and keep the project going of transforming
(at least superficially) the Jamahiriya. In that regard,
al-Qadhafi is the architect of his own gilded cage and cannot
yet relinquish day-to-day decisionmaking, even if he wants to.
End summary.


BACKGROUND: REVOLUTIONARY TURNED SAGE


2. (C) Libyan leader Muammar al-Qadhafi has since the early
1990's sought to propagate his image as "Guide of the
Revolution". While the de facto head of state, he holds no
formal title or position, and has periodically made public
remarks to the effect that while he is a sort of uber-political
counselor to the revolution and its offshoot, the Jamahariya, he
is not involved in day-to-day decisionmaking. Al-Qadhafi was
part of a group of self-described Free Officers who staged a
bloodless military coup on September 1, 1969, wresting power
from King Idriss al-Sanussi, who was then on holiday in Ankara.
Al-Qadhafi was appointed President of the Revolutionary Command
Council on September 13, 1969. In March 1977, he announced that
a new "Jamahiriya", described as "a state of the masses" would
replace the Libyan Arab Republic. The new entity, officially
titled the Great Socialist People's Libyan Arab Jamahiriya,
theoretically allowed the people to govern directly through the
General People's Congress, of which al-Qadhafi became Secretary
General (Prime Minister-equivalent). In 1979, he resigned his
positions and authored the Green Book, in which he articulated
the "Third Universal Theory", which purports to be the logical
corollary of (and improvement on) socialism and capitalism. In
1989, al-Qadhafi declared himself Guide of the Revolution and
adopted the de facto role of head of state, but without formal
portfolio or responsibilities. With the imposition of
international sanctions in the early 1990's, al-Qadhafi largely
withdrew from the media limelight, and only re-emerged in
earnest after sanctions were lifted in 2003-2004. He has since
advocated various trans-national agendas, most recently for a
proposed unified African government, and has cultivated the
image of an international philosopher-king, a la Nelson Mandela
or Vaclav Havel. On the margins of last year's Revolution Day
festivities in Benghazi, a visiting group of African tribal
leaders bestowed upon him the title "King of Kings", together
with the requisite golden crown and scepter.


AL-QADHAFI: SHOW ME THE MONEY


3. (C) Notwithstanding his carefully cultivated image as a man
of history above pettifogging details, a protege of Abuzeid
Dorda, former Prime Minister and now the influential Chairman of
the Housing and Infrastructure Board, recently told us that
Muammar al-Qadhafi personally reviewed all contracts involving
GOL funds that were worth more than USD 200 million and
exercised a great deal of influence over which foreign companies
were awarded contracts through the Committee for Oversight and
Audit. The Committee for Oversight and Audit, known as the
'riqaba' committee, is a powerful GOL entity that reviews all
contracts involving public funds, ostensibly to ensure that they
are fairly awarded and consistent with Libyan law. In reality,
after the contracts are approved at the level of the General
People's Committees (ministry-equivalents) and, in the case of
particularly large contracts, at the level of the General
People's Congress (typically by the office of the Prime
Minister-equivalent),the contracts are sent to the 'riqaba'
committee for what amounts to political vetting.


4. (C) Al-Qadhafi has used the 'riqaba' committee to ensure that
political patronage is properly distributed, i.e., that GOL
entities headed by regime loyalists administer particularly plum
contracts, ensuring that they are well-positioned to extract
rents from foreign companies. He also uses it to direct
contracts to companies from countries with which he has good
relations as a tangible symbol of goodwill, and to prevent large
contracts from being awarded to companies from countries with
which he has political issues. Several well-informed contacts
have told us that when cartoons depicting the Prophet Muhammad
were re-published in a Danish magazine in 2007, al-Qadhafi
reached out through the 'riqaba' committee to direct that
contracts for management of infrastructure projects worth tens
of millions of dollars that had initially been awarded to two
Danish firms be given to other companies. In addition, the
'riqaba' committe and Prime Minister's office acted swiftly to
prevent imports of Danish goods (Danish butter only recently
reappeared on the shelves after an absence of more than a year).
More recently, al-Qadhafi has used the 'riqaba' committee,
together with the office of the Prime Minister, to harass Swiss
companies after the arrest in Geneva last July of his son,
Hannibal al-Qadhafi, and the ensuing Swiss-Libyan contretemps.
As reported ref B, Swiss companies were informed last December
that they had to liquidate all their assets within a month.
U.S. companies experienced a surge in harassment by the GOL,
some of it reportedly directed personally by al-Qadhafi, in the
wake of a decision by a U.S. judge in January 2008 to award
roughly $6 billion in damages to families of seven Americans
killed in Libya's 1989 bombing of a French-operated UTA
passenger plane (ref C). (Note: The situation improved after a
comprehensive U.S.-Libya claims agreement was signed in August
2008 and implemented in October 2008. End note. ) Prime
Minister al-Baghdadi al-Mahmoudi, reportedly with the knowledge
and at least tacit blessing of al-Qadhafi, has mounted a
campaign through his office and the 'riqaba' committee against
the Tripoli branch of U.K. department store Marks and Spencer as
a means to harass longtime rival Husni Bey, a partner in the
Tripoli branch.


5. (C) A well-connected Libyan national employed with a U.S.
company operating here confirmed that al-Qadhafi is deeply
involved in the work of the 'riqaba' committee. Although the
nominal threshold for a contract to be reviewed by al-Qadhafi is
USD 200 million, the reality is that he reviews a large number
of contracts of lesser value. Typically, al-Qadhafi focuses on
contracts with foreign companies of particular concern,
including the U.S., Britain, Russia, China, Italy, Egypt and
Tunis. Our contact told us al-Qadhafi personally directed
Abuzeid Dorda to reduce the number of infrastructure and
development contracts awarded to Turkish companies for a raft of
projects in December 2007 to avoid giving the impression that
Libya favored "the Ottomans". Al-Qadhafi ignored Dorda's
protest that the Turkish companies had submitted the most
competitive bids and were best-qualifed, suggesting that
political credentials count for at least as much as technical
ability.


6. (C) In addition, our contact said the 'riqaba' committee's
writ extends far beyond auditing and review and into actual
project management and contract execution, which has ironically
better allowed 'riqaba' members to extract rents and bribes.
Its officials, most of whom are appointed for political loyalty
rather than technical expertise (many are members of the
Revolutionary Committees and/or relatives of senior regime
figures),are not well-qualified to play such a role. Noting
senior regime officials' "paranoia" about being "cheated" by
foreign companies and the extreme sensitivity to pervasive
rumors that senior regime elements are corrupt, our contact said
an inordinate amount of time and energy is spent by foreign
contractors justifying their expenses and operational decisions.


AL-QADHAFI AS POLITICAL BOSS


7. (C) In addition to his activist role in commercial affairs,
al-Qadhafi's recent interventions in other high-profile issues
undermine the claim that he is a remote seer. As reported ref
D, a senior MFA interlocutor told us on the margins of a meeting
last May to discuss the disposition of eight C-130H aircraft
Libya purchased in the 1970's (but never took delivery of
because of deteriorating bilateral ties),al-Qadhafi personally
met with Libya's team to stress that any movement on resolving
the issue must be contingent on securing USG guarantees that
export licenses would be granted for those items. Al-Qadhafi
was fully conversant with details of the case and was concerned
that U.S.-Libya engagement on C-130's was a deliberate ruse or
an issue on which the USG would ultimately be unable to deliver
because of opposition from Congress, either of which would
greatly embarrass the regime and strengthen the hand of
conservative regime elements skeptical of re-engagement with the
U.S. In December, a key contact told us that while other senior
regime officials supported broader military-to-military
cooperation with the U.S., al-Qadhafi was concerned about having
large numbers of U.S. advisers and trainers present in uniform
in Libya given that "evacuation" of U.S. forces from Libya in
1970 was seen as a key accomplishment of the regime.

8 (C) Al-Qadhafi also actively follows sensitive human rights
issues. In March, a request for GOL assistance in facilitating
a visit by an Emboff to the predominantly Berber town of Zuwara
prompted an angry demarche in which our interlocutor hotly
denied that there was a Berber minority in Libya, decried the
Embassy's "unacceptable interference" in Libya's domestic
affairs and threatened Emboffs with physical harm if they
visited the town (ref E). A key MFA interlocutor told us that
only al-Qadhafi himself could have authored such a sharply
worded message in official correspondence. As reported ref E, a
senior regime official cautioned the Embassy in June against
pushing too hard on the case of detained human rights activist
Fathi el-Jahmi. Claiming that al-Qadhafi had personally
authored the regime's policy on el-Jahmi, he made it clear that
al-Qadhafi had closely tracked (and taken issue with) the
Embassy's engagement with el-Jahmi's family and visits to him by
P/E Chief. Later, a senior MFA interlocutor, citing a
conversation with National Security Adviser Muatassim al-Qadhafi
(Muammar al-Qadhafi's son),said Muammar al-Qadhafi was
personally following el-Jahmi's case and was "upset" that the
U.S. kept raising it (ref F). (Note: El-Jahmi's public
criticism of al-Qadhafi and his stewardship of Libya prompted
el-Jahmi's arrest. End note.)


9. (C) Although he has done so quietly, al-Qadhafi has also
played an active role in the process of political-economic
reform currently under discussion in Libya. In March 2008, he
called for a program of radical privatization and government
restructuring (ref G),and has since been actively involved in
the debate about whether and how to implement his vision (ref
H). Describing al-Qadhafi's decision to scale back
privatization and government restructuring, the HIB's Dorda told
us that " ... al-Qadhafi is a philosopher, but he is also
responsible". More recently, well-informed contacts told us
that al-Qadhafi quietly supported efforts by a special committee
to develop a draft Libyan constitution, and had personally
selected about half of the members of the committee (ref I).
Al-Qadhafi has reportedly kept his role quiet to allow his son,
Saif al-Islam al-Qadhafi, to play a leading role in what could
be a popular reform initiative and to afford himself maximum
latitude to cajole reluctant old guard members into accepting
it. At the end of a televised meeting on December 28 to discuss
Libya's reaction to the commencement of Israeli military strikes
against Gaza, al-Qadhafi instructed that television and
recording equipment be switched off and announced to the
assembled group of political, military and security officials
that Libya was entering "a new political period" and would hold
elections for "some key offices (NFI) soon" (ref J). Most
recently, al-Qadhafi conducted a DVC with students at Georgetown
University on January 21, in which he addressed a variety of
domestic and international issues, and published an editorial in
the New York Times on January 22. The editorial focused on
al-Qadhafi's proposed single state "Isratine" solution to the
Arab-Israeli conflict.


10. (C) Comment: Despite persistent rumors that he is in ill
health and/or delegating day-to-day decisionmaking as part of an
orchestrated succession by one of his sons (most bet it will be
Saif al-Islam),al-Qadhafi remains actively involved in the
regime's most sensitive and critical portfolios, and in many
that are not obviously so important. Part of that is because
the Jamahiriya system of which he is the original author
features few formal decisionmaking structures and opaque lines
of authority, placing a premium on personal fiefdoms and
delicate relationships between regime figures who have been in
power for decades. A further complication is the fact that
Libya is a kleptocracy in which the regime - either the
al-Qadhafi family itself or its close political allies - has a
direct stake in anything worth buying, selling or owning.
Referred to in Libyan parlance as "the politics of the black
hand", it is the tried and true method of indulging - and even
encouraging - corruption by favored regime officials, in part so
that al-Qadhafi has a cudgel with which to beat them to help
ensure their political loyalty. Al-Qadhafi's mastery of
tactical maneuvering in what remains an essentially tribal
society (with the attendant complication of family/clan ties)
has allowed him to remain in power despite a notoriously
fractious and inchoate body politic for nearly 40 years;
however, the unholy alliance of corruption and
cult-of-personality politics on which the system has been based
is ultimately limiting. Senior members of the regime have made
a handsome living by dint of political loyalty and a skill set -
smuggling, bribes, extortion, and the more prosaic winning of
contracts by virtue of connections alone - that are not as
saleable or lucrative in a transparent economy in which the rule
of law obtains. Squaring the circle between an old guard whose
livelihood and political standing will be seriously impacted by
proposed political-economic reforms and a new, more predictable
and transparent system in which a greater number of ordinary
Libyans can productively participate is the key challenge facing
al-Qadhafi in the autumn of his reign. The reality is that
neither Saif al-Islam nor any other potential successor
currently enjoys sufficient credibility and power in his own
right to maintain that delicate balance and keep going the
project of transforming (at least superficially) the Jamahiriya.
In that regard, al-Qadhafi is the architect of his own gilded
cage and cannot yet relinquish day-to-day decisionmaking, even
if he wants to - and it is far from clear that he does. End
comment.


CRETZ