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With Americans out of Libya, US penalizes Gadhafi

By Erica Werner

Associated Press

Published: Saturday, Feb. 26 2011 9:22 a.m. MST

A man walks through roadblocks made by residents in the Tajoura district of eastern Tripoli, Libya, Saturday, Feb. 26, 2011. Residents there have blocked many streets with roadblocks after protesters demanding Moammar Gadhafi's ouster came under a hail of bullets Friday when pro-regime militiamen opened fire to stop the first significant anti-government marches in days in the Libyan capital.

Ben Curtis, Associated Press

WASHINGTON — The Obama administration froze all Libyan assets in the U.S. held by leader Moammar Gadhafi, his government and four of his children and abandoned the American Embassy in Tripoli in the wake of the violent crackdown against protesters.

The moves announced Friday came immediately after the U.S. ensured that Americans were safely on their way out of the North African country by air and by sea.

"By any measure, Moammar Gadhafi's government has violated international norms and common decency and must be held accountable," President Barack Obama said in a statement announcing the penalties. He said they were designed to target Gadhafi's government and protect the assets of Libya's people from being looted.

The actions struck directly at Gadhafi's family, which is believed to have amassed great wealth during his 42 years in control of the oil-rich nation.

The president condemned "the Libyan government's continued violation of human rights, brutalization of its people and outrageous threats."

The administration faced increasing pressure to join more forcefully in condemning Gadhafi, who is arming civilian supporters to set up checkpoints and roving patrols around the Libyan capital, Tripoli residents said Saturday.

Protesters demanding Gadhafi's ouster came under heavy gunfire Friday by pro-government militiamen trying to stop the first significant anti-Gadhafi marches in days in Tripoli.

"At the suitable time, we will open the arms depot so all Libyans and tribes become armed, so that Libya becomes red with fire," Gadhafi said.

The White House had held back while U.S. citizens remained in Libya. That changed Friday after the successful evacuations of embassy personnel and other U.S. citizens on a chartered airplane and a ferry to Malta.

White House press secretary Jay Carney said Gadhafi's "legitimacy has been reduced to zero in the eyes of his people." The White House later released an executive order signed by Obama detailing the penalties.

The U.S. put an immediate freeze on all assets of the Libyan government held in American banks and other U.S. institutions.

The sanctions also apply to assets held by Gadhafi, himself, and three sons — heir apparent Seif al-Islam, Khamis and Muatassim — and a daughter, Aisha. The order directs the secretaries of state and treasury to identify other individuals who are senior officials of the Libyan government, children of Gadhafi and others involved in the violence.

Stuart Levey, undersecretary for terrorism at the Treasury Department, said officials believe "substantial sums of money" will be frozen under the order. He declined to give an estimate.

Libya ranks among the world's most corrupt countries and has enormous assets to plunder. Confidential State Department cables suggest that U.S. banks manage hundreds of millions in Libyan assets, and the government has built a multibillion-dollar wealth fund from oil sales.

The executive order said that the instability in Libya constituted an "unusual and extraordinary threat" to U.S. national security and foreign policy.

But the White House stopped short of calling explicitly for Gadhafi's ouster, as France President Nicolas Sarkozy has done. The White House also held back from endorsing imposition of a no-fly zone in Libyan airspace as sought by some foreign diplomats, and a U.S. military response seemed unlikely.

The options available to influence Gadhafi are limited. The 68-year-old leader has had a rocky relationship with the West, and American officials are worried about his unpredictability as he clings to power.

Carney said other penalties would be coordinated with international allies and the United Nations. Secretary-General Ban Ki-moon was invited to Washington for talks with Obama on Monday.

The suspension of operations at the American Embassy does not mean an end to diplomatic relations with Libya. The U.S. wants to retain the ability to communicate directly with Libyan officials to appeal for restraint and an end to the violence, State Department officials said.

The U.S. maintained a stiff embargo against Libya for years, calling it a terrorist sponsor. Washington eased restrictions over the past several years in recognition of Gadhafi's decision to renounce his nuclear weapons program and his cooperation in anti-terror operations. Carney said the U.S. would suspend the limited military cooperation it had with the country.

Associated Press writers Matthew Lee, Bradley Klapper, Ben Feller and Darlene Superville contributed to this report.

Online:

Obama's executive order: http://tinyurl.com/4vusttd

Obama's letter to Congress: http://tinyurl.com/4bas6ds

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