Bad toys for bad boys

Straight-up Bond villain extravagances via Hannibal Qadhafi, reports the Financial Times. The dictator’s son was building himself a cruise ship with a shark tank:

Replete with marble columns, gold-framed mirrors and huge statues, the Phoenicia was to have included a 120-tonne tank of seawater for two sand tiger sharks, two white sharks and two blacktip reef sharks. Four resident biologists would have tended to the animals. The sharks’ nutritional needs mandated a dedicated food store.

No word on how much the liner cost Libyans – Hannibal skimmed off the top of the country’s port incomes – but the Phoenicia is being refitted by Swiss maritime conglomerate MSC for regular passenger duty at a cost of over US$720 million. Apparently Hannibal had extremely tacky taste and interior renovations have been rather involved. Sadly for passengers and Roger Moore enthusiasts, the shark tank will go – though that’s at least good news for the sharks.

The new Libyan government is having better luck confiscating money and properties from other Qadhafi family members, though: the UAE is freezing the accounts of the late Colonel’s wife, Safia Farkash Al Barassi, and gaining ownership of Saadi Qadhafi’s £10 million London estate that was improperly purchased using Libyan Investment Authority funds. The NTC is also looking to bring Saadi himself, living in exile in Niger, back to Libya to face trial, a proposition that, like most NTC governance efforts, is proving to be an extremely challenging task to enforce.

For their part, some African Union leaders now miss Qadhafi’s largesse in terms of foreign investments as countries are unfreezing and returning Libyan Investment Authority assets to the NTC. They’re in “good” company in the EU and the U.S.

It’s a parable for the Qadhafi era, really, that despite the presence of sharks onboard, there was a willingness to do much business with the sharks’ wealthy owners.

UPDATE: Nicholas Sarkozy, who was perhaps the most gung-ho EU leader on intervening in Libya last year, seems determined not to let reports of his campaign taking US$66 million from Colonel Qadhafi turn into a new “Bokassa’s Diamonds” episode in French politics. First Berlusconi’s Libyan investment gymnastics, and now Sarko’s alleged blood money. At least for Sarko’s peace of mind he hasn’t been accused of corruption and abetting mass killings like Francois Mitterrand was.

Bad investment

Back in the early days of Libya war, the reasons for France's rapid intervention were the subject of much discussion. One of the rumors that was floating was that Nicolas Sarkozy, France's president, was eager to cover up the Qaddafi regime's close ties with his own party and business networks including the financing of Sarkozy's presidential campaign in 2007.

The rumor has now come back with a vengeance and possibly, proof. The quality (anti-Sarkozy) website mediapart.fr has published an incendiary document suggesting that the campaign was financed through Saif Islam al-Qadhafi to the tune of €50 million. The document, which was leaked by government sources and had previously been part of the evidence in a case involving the relationship between Sarkozy's party and the arms dealer Ziad Takieddin, suggests an elaborate setup negotiated between the Qadhafis and Sarkozy's advisors. The money was laundered through a Panama-based shell company and the Swiss bank accounts of the sister of a prominent right-wing politician also close to Sarkozy, according to mediapart. Takieddin was also known to be a troubleshooter and fixer for the French Interior Ministry in seeking contracts for French companies that provide security services, including for Saudi Arabia.

In March 2011, just a few days before French jets struck Libyan army vehicles moving towards Benghazi, Saif al Islam gave an interview in which he demanded that France return the money used in the presidential campaign, threatening that he had details of bank accounts that could incriminate Sarkozy. This was ignored at the time, and dismissed as an attempt to embarrass the French. What is beyond dispute, though, is that the Sarkozy administration had close an fruitful ties with the Qaddafi regime, both formally and through back channels.

Although this remains to be confirmed, it appears consistent with widespread rumors going back to at least the 1970s of illicit financing of right-wing little parties and candidates by Arab and African dictators. Jacques Chirac for instance was commonly said to have received campaign baksheesh from Lebanon's Rafiq Hariri and Morocco's Hassan II. This latest affair is part of a growing scandal dossier involving Sarkozy party and his entourage — one that could become a major reason he loses his reelection bid in May.

I’ve been traveling for 10 days or so now — after a week in Tunis, I am now in Istanbul — and I therefore missed some of the big regional stories. Some readers wrote asking me to weigh on various issues, which I will do quickly below.

Qadhafi’s death

Frankly, I did not want to comment on this one. I thought the videos circulating of Qadhafi, notably the one in which he is sodomized by his captors with a stick, were extremely distasteful. I totally understand that he was killed (he deserved nothing else) and had I been Libyan I would have done the same. But the manner in which this was done was tasteless, and does lead one to worry about the well-armed, adrenaline pumped youth who now rule the streets of much of Libya. It does not really inspire confidence for rule of law in Libya. And for me, the big event was the fall of Tripoli, since only small areas were still under the control of the old regime.

We’ll see how it turns out in Libya — which, it seems obvious, will be torn between the centralizing effect of getting most of the country’s income from oil exports and the strong regionalisms that dominate in the country. This has been a permanent fixture of Libya politics since the state’s creation. I hope they are able to find a stable political model to integrate the reality of strong locally-based politics with the need for central planning for the country’s development, and that the rivalties between the people of Nafusa, Tripoli, Misrata and Benghazi (among others) can find a peaceful conduit.

Prince Sultan and Saudi succession

I don’t follow Saudi Arabia much, except that one has to to some extent to understand Saudi foreign policy and its regional impact. But I think this picture of the leading Saudi royals is telling: two are in a wheelchair, one cannot feed himself, and another is so fat he can barely move. They’re all super-old yet all their hair is jet-black. Yet, they are masters of the universe, among the most powerful men in the region and perhaps the planet. But they should really think about skipping a generation (not that I wish their regime well, of course.)

Egypt’s syndicates

There’s been much talk lately about how well or not well the Egyptian Muslim Brotherhood is doing in various syndicate elections. I haven’t followed all of these, but it seems they are over-selling how well they did in the Doctors’ Syndicate (where they won nationally but only have a slim majority in governorate-level syndicates). They lost big in Alexandria, which is a surprise as this is a stronghold for them. What’s interesting is that the MB tried to portray this as a big victory, which their enemies protested was an ploy ahead of the parliamentary elections. I think they did well, but not that well (no need to exaggerate the other way either). If you read French, Alain Gresh’s post on the matter is good.

The guy they supported (but who is not a member) just won the Journalists’ Syndicate election, but just barely (and the number of spoilt votes in the election is enough to to make the difference). The MB did poorly in the Cairo student elections earlier this year. I think the lesson is the MB, for all its organizational force, is not a hegemonic force among professionals and probably not nationally either. Which is good, not just because I’m not very fond of the MB, but also because Egypt needs pluralism more than anything right now. But I also think there is a tendency in the academic literature on Egypt to oversell the importance of syndicate elections to national politics. By definition, professional syndicates are a middle class battleground that is of little concern to over 60% of the population, after all.

The past two weeks have also seen major protests by police officers, as well as huge battle between the Lawyers’ Syndicate and the Judges’ Club over a judicial decree allowing judges to detain lawyers who disturb court proceedings. (I side with the lawyers because I’m not fond of judges, although in most countries a judge can declare anyone in contempt of court. But that being said I have not looked into it in detail.)

I see this as much pent-up frustration and unresolved differences sorting themselves out after the immobilism of the Mubarak era. It will be messy, and it’s necessary. Part of the difficulty of course is that few are 100% clean of working with the regime (including the MB) and that change is seen as disruptive and dangerous by many.

"Want to bunga-bunga or should we just zenga-zenga?"

An item in the Wall Street Journal reminds us that the ties between Libya and Italy's elites are very, very deep, and, as benefiting the lives of the rich and famous, sometimes produce strange little stories that illustrate much larger forces at work - in this case, the economic future of Libya following the National Transitional Council (NTC) and NATO's military successes: 

ANTRODOCO, Italy - Maurizio Faina, mayor of this small Italian town, has for three years been planning the construction of a lavish spa here thanks to one deep-pocketed financial backer: Col. Moammar Gadhafi.

Now that Col. Gadhafi is being ousted from power by his own people, "the whole plan is over, and it's sad," says the mayor, who had hoped to employ hundreds of people thanks to the €16 million ($22 million) resort.

Antrodroco's longing for Col. Gadhafi's largesse is a small, but significant, window into the vast economic ties between Italy and its former colony - a network that generated about $17 billion in annual trade before the conflict broke out.

Significantly, the spa deal began with a personal effort by Colonel Qadhafi (conduced alongside the Italian PM, Silvio Berlusconi, who has cultivated close ties with the deposed leader) and was, according to Italian sources, being managed by the Libyan Investment Authority (LIA), whose multibillion dollar assets were frozen several months ago. These assets include stakes in UniCredit, Italy’s largest bank (who largest foreign owner was, until recently, the Libyan government); Eni, the state energy company that produces the lion’s share (60%) of Libya’s oil exports; and Finmeccanica, a partly government-owned conglomerate with interests in Libya ranging from infrastructure to defense. The regime also had smaller stakes in various Italian sports, automotive, media and telecom interests – and was reported to be eying another, even larger, resort project in the Italian spa town of Fiuggi (so the Colonel would have a choice of resorts, presumably).

Faina is quoted in the Journal as being bitterly disappointed with NATO’s actions in Libya, reflecting divisions within Italy over the effort to remove Qadhafi. Although Italy accquiesced to the NATO intervention, the government was very reluctant to become too deeply involved with the campaign, though it did come to support the NTC. 

Tangled colonial and WWII history have something to do with this reluctance to intervene, of course, but so too do the awkward TV images showing destroyed military hardware that Italian firms sold to Qadhafi in the 1980s. Italy’s defense ties with Colonel Qadhafi – stalled during the 1990s because of an arms embargo – revived after 2004, as did those of other EU defense firms. Those ties are sure to resume, along with a bevy of other financial and political ties, as the NTC settles into Tripoli and tens of billions of dollars in assets held by the LIA are unfrozen by Western nations.

The spa deal is indicative of the connections between the Qadhafi regime and Western politicians and corporate executives. Qadhafi’s discovery of Antrodoco may have been accidental –he is said to have serendipitously stopped at the town on a state visit to Italy – but his further association with the town after that was anything but serendipitous. Colonel Qadhafi flew Antrodoco notables to Tripoli to discuss the venture, and the LIA was negotiating contracts with the town’s officials up until April 2011. Faina says that in the process, he got to rub elbows with Italian political heavyweights like the former chief executive of UniCredit, Alessandro Profumo, whose bank is now inextricably associated with the LIA’s wealth mismanagement.

Profumo left Unicredit in September 2010 partly because of controversy surrounding the LIA. At that time, the LIA had purchased a 2.6% stake in UniCredit, alongside the purchase of a 5% stake by the Libyan Central Bank, making the Libyan government, through these agencies, UniCredit’s largest stakeholder. According to the Financial Times, Profumo’s decision to not announce this to shareholders “triggered” his removal, especially because some of Berlusconi’s political allies in the ultranationalist Northern League objected to “Arab” investment in Italy on (xenophobic) principle. UniCredit did not reneg on the deal with the Libyan Central Bank and LIA, but did freeze their assets at UniCredit several months ago. Now the Italian government (in addition to most EU governments) are pressing for the funds to be unfrozen and given to the NTC for reconstruction purposes.

But, despite the airing of dirty laundry in public (including the revelation that Berlusconi himself has business ties to the LIA through a French telecom called Quinta Communications and Tunisia’s Bourguiba family), the awkward recent past will likely be overcome as Italy and the NTC seek a modus operandi, which will be fueled by petroulem products.

Eni, the biggest oil major in Libya, draws 13% of its total revenue from its Libyan operations and has been moving quickly to restart and shore up its operations in Libya, which were halted in February 2011. Despite its formerly close ties with Qadhafi, it moved to establish ties with the NTC as the fighting intensified. The NTC has, in turn, signaled it willingness to adhere to preexisting export agreements with Italy (the revenues from those agreements make up 95% of Libya’s foreign revenue receipts), and is now depending on Eni, and the French firm Total SA, to get oil production up and running again. As Italy’s Foreign Minister put it, “the rebels in Benghazi immediately understood that Eni would have been a reliable partner in a post-Gadhafi Libya.”

Some Italian papers are already editorializing that the Italy must seize the initiative to regain clout in Libya over Eu interlopers. From the center-right daily La Stampa comes a call-to-arms for all able-bodies men with suits and briefcases to preserve Italy's sphere of inlfuence. It is certainly forthright and accurate in its description of Italian, and, by extension, EU motives in postwar Libya:

"The factor on which the North African Great Game (a term given capital letters by historians of colonial rivalry) still pivots is the instability of a Libya which, while devastated, still owns immense energy assets and has a heritage of economic ties with several wealthy countries in the world. It is basically a huge resource market open - indeed more open than ever, amid its smoking wreckage - to the craftiest and, at the same time, the firmest bidder and protector."

[Snip]

"No more squadrons of [French] Mirages or of Rafales, no more nuclear aircraft carriers like the Charles De Gaulle, but engineers, technicians, geologists, and managers hunting for crude oil in the deserts, and fighting a cold war to prevent Italian companies from winning back their priority positions in the network of oil wells nurtured and fitted out by [ENI founder Enrico] Mattei's heirs. We should not forget that the "Libya game" was worth a turnover of at least 12 billion [euros] a year to Italy."

The editorial shows that the NTC can count on a somewhat sympathetic voice in the EU (Italy, like France, will object to just about any Anglo-American move in its postcolonial African spheres of influence). Meanwhile, a shrewd NTC leadership can look to manipulate potential foreign investors as firms rush to participate in postwar reconstruction efforts.

And despite the hiccups in the Italian economy that the war caused, so far, the NTC victory bodes well for Italian businesses. Although plunging over the summer because of the fighting in Libya, the stock values of Italian firms in Libya – especially those with infrastructure and energy portfolios – rallied when the NTC seized Tripoli, which prompted audible signs of relief from these firms. The Italian government (in addition to most EU governments) are pressing hard for the funds to be unfrozen and given to the NTC for reconstruction purposes. 

Italy may have lost a spa, but it may yet gain an even better luxury package from the NTC in return for political and economic support. But like the abortive spa, it remains to be seen what – if any – tangible benefits Libya’s populace will gain from these dealings.

"Whatchoo talkin' 'bout, Willis?"Running into this Moor Next Door post on the spelling of Qadhafi's name, and this Atlantic report that his passport spells it "Kathafi", reminded me of a meeting I a few months ago. I was meeting with a bunch of business people who know no Arabic and little about the Middle East. The conversation turned to Libya and one of them turned to me and asked why there were so many spellings of Qadhafi's name. What follows is what I said, which is very much what Kal of TMND argues, except I put it in laymen's terms, without the phonetics.

In Arabic, Qadhafi's name is spelled القذافي which if you drop the article, means
ق - ذ - ا - ف - ي or q - dh - a - f - i. The "q" letter is almost unique to Arabic (sometimes called "the language of the qaf" — sorry, it's the language of the dhad, not qaf!) and often transliterated as a "k", since its pronounciation can be difficult for non-Arabic speakers. It is standard in classical Arabic and places like Fes in northern Morocco, but northern Egyptians, urban Syrians and others often pronounce this letter as a glottal stop, while southern Egyptians and Bedouins most often pronounce as a "g", as in "go". (This is why in Syria upscale Damascenes call the regime "the government of the Qaf", because pronouncing the letter is a country bumpkin thing to do, and Eastern Sunnis and Alawites — long dominant in the regime — often do it). Hence you see Qadhafi, Kadhafi or Gadhafi. The "dh" sound also has no equivalent in many languages as a standalone letter, and to top it off is made emphatic by a shedda — a kind of accent that indicates the letter should be doubled, which is why academics use the unwieldy "Qadhdhafi." And the "dh" is often not pronounced as such — in most colloquial Arabics, it is pronounced "d". I'm not sure why it might be pronounced "th", but perhaps this was used in Qadhafi's passport because it is close to the English sound in "the", which sounds very much like "dh".

I always write Qadhafi because it's simple and faithful enough without being completely anal, like Qadhdhafi.