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U.S. freezes Libyan assets, takes steps to aid refugees

By Joby Warrick and Karen DeYoung
Washington Post Staff Writers
Monday, February 28, 2011; 4:37 PM

GENEVA - U.S. and Europeans leaders took new steps Monday to tighten the noose on Libya's besieged government, with the U.S. Treasury announcing the freeze of $30 billion in Libyan assets.

"As of today, at least $30 billion in government of Libya assets under U.S. jurisdiction have been blocked," David Cohen, Treasury's acting undersecretary for terrorism and financial intelligence, said in Washington. "This is the largest blocking under any sanctions program ever."

The action was taken under an executive order issued Friday by President Obama. The order covers assets belonging to longtime Libyan leader Moammar Gaddafi, four of his children, the Libyan government and its entities, such as the Libyan Central Bank and the Libyan Investment Authority. Cohen said he has no details on the types of assets that were frozen or the banks involved, but he said the freeze order covers "any bank that is organized under the laws of the United States or any branch operating overseas of a U.S. bank."

There was no indication before the freeze that the Gaddafis or the Libyan government had tried to liquidate a significant amount of assets, Cohen told reporters. He said Treasury is still "considering whether to add to the list of individuals who have been designated." Because of a combination of U.S., European Union and U.N. Security Council sanctions, the United States now believes that all Gaddafi and Libyan assets worldwide are frozen, Cohen said.

In Geneva, U.S. and European leaders focused on sending aid to rebels and refugees, toughening sanctions and calling for the ouster of Gaddafi, who has ruled Libya for more than 41 years.

Secretary of State Hillary Rodham Clinton, addressing a meeting of the U.N. Human Rights Council, announced new efforts to stem the Libyan humanitarian crisis. Some $10 million in relief funds have been set aside by the U.S. Agency for International Development, and two teams of experts are being dispatched immediately to Libya's borders to assess the refugee crisis and organize the delivery of aid.

U.S. officials are particularly concerned about shortages of medical supplies and a breakdown in distribution networks that is preventing food from getting into the country.

Clinton predicted that additional punitive measures would be announced within the coming days by European allies, which have maintained closer economic and diplomatic ties with Libya than the United States has.

The European Union, meeting in Brussels, voted to approve wide-ranging sanctions similar to those adopted over the weekend by the United States and the United Nations. The European Union also slapped Libya with an arms embargo and imposed a visa ban for members of Gaddafi's inner circle, as world powers moved quickly and in virtual lockstep to punish the Libyan government for its violent crackdown on demonstrators.

The new actions are being carefully calibrated to ensure that ordinary Libyans are not harmed, Clinton said at a news conference at Geneva's Palais des Nations.

"We are very aware of the need to block access to resources and assets that Gaddafi and his family could get a hold of," she said. "At the same time, we are well aware of the need to keep resources coming in so the people themselves can use them to meet specific needs."

In her address, Clinton catalogued the atrocities that Gaddafi's regime is alleged to have committed and said the international community is "speaking with one voice" in demanding his immediate removal.

"They have used heavy weapons on unarmed civilians. Mercenaries and thugs have been turned loose to attack demonstrators," Clinton said. "There are reports of soldiers executed for refusing to turn their guns on fellow citizens, of indiscriminate killings, arbitrary arrests and torture.

"Col. Gaddafi and those around him must be held accountable for these acts, which violate international legal obligations and common decency," Clinton added. "It is time for Gaddafi to go. Now, without further violence or delay."

While the Obama administration has repeatedly demanded legal accountability for Gaddafi, Clinton hinted that the United States might be willing to accept a deal in which the Libyan leader would voluntarily agree to exile in a third country. She raised the possibility at a news conference in which she was asked whether Gaddafi might be permitted to seek refuge with Zimbabwe's leader, Robert Mugabe.

"I was almost rendered speechless by the idea of him and Mugabe together," Clinton said to resounding laughter. "We want the violence to end, and if the violence could be ended by his leaving . . . that might be a good thing."

But she added that U.S. officials still believe that "accountability has to be obtained for what he has done."

Clinton sought to clarify the administration's policy for dealing with wave of unrest that has swept the Middle East in the past two months, responding to criticism that the White House has been slow and inconsistent.

"Democratic change must grow from within each country. It cannot be implanted from outside, and the West certainly does not have all the answers," she said. "The first steps of change have come quickly and dramatically in some places, such as Egypt and Tunisia. It is proving tragically difficult in Libya. In other nations, it is likely to be more deliberate and methodical. In all cases, we will support citizens and governments as they work for progress."

Two senior administration officials involved in the consultations Clinton is having with European and Middle Eastern allies here said a military no-fly zone above liberated areas of eastern Libya was among the options discussed.

Enforcing such a no-fly zone would prevent Gaddafi's regime from ordering air attacks on protesters or rebel-held areas.

"As the secretary said, all options are on the table," said one of the officials. Both insisted on anonymity, citing the sensitivity of ongoing diplomatic discussions.

The officials said the State Department is dispatching humanitarian teams to Libya's eastern and western borders to provide aid to a tide of refugees streaming out of the country.

The officials confirmed that the Obama administration remains in touch with key figures in the Gaddafi government, including Foreign Minister Musa Kusa, but they declined to elaborate on the substance of the discussions, including the possibility of fractures within the ruling clique.

"We're sending them the same messages in private as we're doing in public," one of the officials said.

European officials also are bracing for what some fear could be a mass migration - perhaps hundreds of thousands of people - headed across the Mediterranean Sea into Europe.

In France, Prime Minister Francois Fillon announced that two planeloads of French doctors, nurses and medical supplies were en route to the rebel-held city of Benghazi on Monday in what he described as "the beginning of a massive humanitarian support operation to the populations of liberated territory" in Libya.

Criticized for a slow reaction to the revolts in Tunisia and Egypt, President Nicolas Sarkozy seemed eager to demonstrate clear-cut backing for the uprising against Gaddafi and to position France as a friend of whatever government might take over the oil-rich North African nation.

In addition to formally endorsing the package of sanctions and travel restrictions approved Saturday by the U.N. Security Council, the 27 E.U. countries went a step further by expanding the number of senior Gaddafi advisers and family members who would be subject to a visa ban.

Individual European Union members called for still harsher measures. German Foreign Minister Guido Westerwelle, after meeting with Clinton, said his government supported a freeze on all payments to Libya for the next 60 days, citing reports that Libya is hiring foreign mercenaries to conduct violent crackdown on protesters.

"We must do everything to make sure no money is going to the Libyan dictator's family so they won't have an opportunity to hire new foreign soldiers to repress their people," Westerwelle said.

Clinton is using the Geneva trip to rally international support for a campaign of steadily increasing economic and diplomatic pressure against Libya as well as humanitarian aid for its citizens. Administration officials have stressed the importance of a unified, multilateral response, noting that European nations have far stronger diplomatic and economic ties to Libya.

Although Gaddafi appears determined to hold on to power at all costs, others in his inner circle "may in fact be rational and may be in interested in self-preservation," a senior administration official said.

The speed with which the security council and the larger international community responded to the violence in Libya came as a welcome surprise to a White House that in the past has often struggled to build a global consensus.

"The lesson of history is that when it comes to these kinds of crises there tends to be international disunity," the senior administration official said. "Here we have managed to have the most united front imaginable. But it is important that we move to the next stage."

warrickj@washpost.com DeYoung reported from Washington. Staff writer William Branigin in Washington and correspondent Ed Cody in Paris contributed to this report.

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