U.S. Tries To Use Libya's Assets For Aid Purposes

Originally published on June 14, 2011 6:32 am
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How much is known to be frozen of Gadhafi's money?

STUART LEVEY: Well, I think the most recent figures I've seen are somewhere between $38 and $40 billion frozen by the United States. And then another significant sum frozen in other countries. I don't have exactly the number.

INSKEEP: Tens of billions of dollars here.

LEVEY: Tens of billions of dollars, definitely.

INSKEEP: Now, is that Gadhafi's money? Is it Gadhafi's name on the checkbook or is it the government of Libya?

LEVEY: This is the government of Libya's money. These are assets that are held by the Central Bank of Libya, the Libyan Investment Authority, perhaps the Libyan Oil Company. Very little of this, my educated guess would be, would be in the names of individuals.

INSKEEP: Thirty-eight to forty billion dollars. And what is that - bank accounts, real estate, other kinds of assets?

LEVEY: It's all of those things, but most likely a very small percentage of it is cash in bank accounts. And it is for that reason I think that when people are starting to talk about using the assets that becomes a more complicated process.

INSKEEP: Oh, because you've got some real estate and maybe the book value is a billion dollars for a property, but who knows what you can sell it for right now or how much time that would take.

LEVEY: Well, that's part of the reason. But the other part of the reason is that when we block assets in the United States, we block all interests in property. And so when it's a bank account held by a sole entity that's fairly simple. But when it's a real estate investment or shares in a nonpublic company, you block the interest in the property but it's very hard to monetize that and use it.

INSKEEP: You can't sell a portion of property, for example. But you could sell if it's a certain number of shares of stock you can make that kind of the sale.

LEVEY: If there's a public market for something. So it's possible to sell interest in property, but it's more complicated.

INSKEEP: Suppose you resolved the practicalities, you find whatever mechanisms that makes legal sense and practical sense and you free up a few billion dollars or tens of billions of dollars over the coming months, is there any reason to be wary of handing that money over in any form to the transitional government in Eastern Libya?

LEVEY: I think that we would still run into complications in the case of Libya, which is why I strongly suspect there is a desire to look at just donating money. Or using these frozen assets as collateral, to get people to make loans to the rebels, that they would then pay back at a future time.

INSKEEP: I want to ask about the flipside of this money. We're talking about the benefit of making use of this money and what the U.S. would see in some positive way. But, of course, the original purpose was not that - that's a bonus if you can get that to work. The original purpose was to put pressure on or punish Moammar Gadhafi and his government. How effective has that been?

LEVEY: I do think it is a very powerful sanction. I think that if people believed that it would be some sort of silver bullet, which would lead him to resign and leave immediately, that was unrealistic. But over the medium term, the government of Libya is in a very difficult situation. So it's very hard for them to maintain and run their economy. There's no doubt that Gadhafi and his inner circle have access to some assets but, over time, this is a very powerful sanction.

INSKEEP: Doesn't it seem apparent that he does still seem to have money to put an army in the field, however ragtag it might be? His people are still fighting, we can presume they're still being paid.

LEVEY: I think that's probably a fair assumption, but the question is for how long? I think if you combine the pressure of sanctions with the military pressures that's being applied, there is a reasonable chance that over time this will have the desired effect. But sanctions alone, and even sanctions with these other measures, are not going to necessarily work on the prescribed time scale.

INSKEEP: Stuart Levey, thanks very much.

LEVEY: Thank you.

INSKEEP: It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.