The e-mail said there was in “excess of $29.7 Billion — yes, that’s a B.”
And most of the money was at one bank.
It was a piece of extraordinary good fortune for the Obama administration at a crucial moment in the efforts to address the bizarre and deadly events unfolding in Libya.
Never before had U.S. officials so quickly launched economic sanctions affecting so many assets of a targeted country.
The frenetic 72 hours leading up to the Executive Order 13566 illustrate how a process of identifying and freezing assets — something that customarily has taken weeks or months — has become one of the first tactical tools to employ in the midst of fast-breaking crises.
It also shows that government officials have learned from other recent economic sanction efforts, including against Iran and North Korea. Instead of being a secondary measure, as in the past, economic sanctions have become a centerpiece of national security policy.
The same global electronic networks that dictators use to move billions in state assets can also be turned against them, when government and financial industry officials summon the will. The successful Libyan sanctions effort relied on cooperation with a wide range of financial firms in the United States, including the bank holding the bulk of the Libyan assets, which Treasury officials have declined to identify.
Officials also would not provide detailed information breaking down the assets, which include holdings by individuals and Libya’s sovereign wealth fund. Investigators are expected to focus on whether any laws were broken in the handling of the money.
The $32 billion frozen so far by the United States represents a significant portion of the nation’s wealth. In 2009, Libya had a gross domestic product of $62 billion; its sovereign wealth fund is estimated at $40 billion and its central bank reserves at $110 billion.
The European Union has added the central bank, the wealth fund and three other Libyan institutions to its sanctions — two weeks after the U.S. action. So far, British officials have seized more than $19 billion in Libyan assets.
U.S. Treasury officials said they see their sanctions as one thrust in a broader campaign to isolate Gaddafi.
“Gaddafi is still there and is still brutalizing his people; there’s obviously still work to be done,” said David S. Cohen, acting undersecretary for terrorism and financial intelligence. “We never expected that this by itself was going to persuade Gaddafi to give up power.”
He said Gaddafi is still “paying mercenaries. He’s paying his troops. He’s in a cash-intensive business. And not having access to the Libyan Investment Authority assets, the Central Bank of Libya assets, other assets that he and his children have overseas, is going to be a problem for him.”