State Department Backs Off Grants to Kaddafi’s Kids

UPDATE, 8:30 PM: After getting complaints from Congress─and an inquiry from NEWSWEEK─the State Department backed away Thursday from awarding foreign-aid funds to two foundations headed by the children of Libyan dictator Muammar Kaddafi.

A senior State Department official said that department officials were "reworking" a $2.5 million foreign-aid earmark for Libya that, according to a memo to Congress sent last week and reported by NEWSWEEK on Thursday afternoon, was to include $400,0000 for two foundations─one headed by Kaddafi's son Saif al-Islam al-Gaddafi, and another headed by his daughter. The State official said the funds were to be used for "democracy and governance" programs in Libya and explained the initial designations for the two Kaddafi-related organizations by saying in an e-mail: "In Libya, there are no independent NGOs [nongovernmental organizations], so we are somewhat limited in terms of our civil outreach." However, the official added, the funds have not actually been obligated, and "we will listen to our appropriators and make adjustments as necessary." All of this is further evidence that Kaddafi─who for the past few years has been avidly cultivated by officials in the Bush and Obama administrations─is becoming increasingly toxic.


The State Department has designated $400,000 in international aid funds for two foundations run by the children of Libyan dictator Muammar Kaddafi, a move that two Republican members of Congress today called a misuse of taxpayer funds that should be immediately cut off by President Obama. The Congress members’ complaints on Thursday came just a day after Kaddafi delivered a bizarre speech to the United Nations in which he suggested the Israelis may have been behind the Kennedy assassination and the swine-flu virus was cooked up in a corporate lab. It also comes amid mounting international criticism of Kaddafi’s regime after it provided a hero’s welcome to Abdelbaset Ali Mohmed al-Megrahi, the former Libyan intelligence officer convicted of the 1988 bombing of Pan Am 103 that killed 270 people.

Ironically, one of the groups designated for $200,000 in State Department funds is the Kaddafi Development Foundation, headed by Saif al-Islam al-Gaddafi, the Libyan leader’s son who personally arranged for Megrahi’s flight back to Tripoli last month after the convicted terrorist was released on “humanitarian” grounds from a Scottish jail. Another $200,000—part of $2.5 million in State Department economic-support funds for Libya—is slated to go to an organization headed by Kaddafi’s daughter Aisha, to promote “women’s economic opportunities.”  “This waste of taxpayer dollars is particularly outrageous following the hero’s welcome given to the Lockerbie bomber,” said Florida Rep. Ileana Ros-Lehtinen, the ranking Republican on the House Foreign Relations Committee. Ros-Lehtinen wrote Secretary of State Hillary Clinton asking her to cut off the entire $2.5 million designation for Libya, noting that it was provided by Congress in order to “promote democracy and human rights” in Libya. “How could this assistance effectively promote democracy when entrusted to the dictator’s family?” she asked.

In a separate letter, Rep. Mark Kirk, an Illinois Republican who serves on the House appropriations subcommittee that oversees foreign-aid funding, asked President Obama to withdraw the funding request, noting that Obama had criticized the reception given by Kaddafi to Megrahi: “For the sake of the [Pan Am] victims’ families who have endured so much pain these last few weeks, I ask you to withdraw your Administration’s request.” Spokespeople for the White House and the State Department did not immediately respond to requests for comment.

The funding for Libya is a direct outgrowth of the Bush administration’s decision two years ago to remove the country from the official list of State Department “state sponsors” of terrorism. While it was on the list—the result of U.S. intelligence tying the country’s intelligence service to numerous acts of terrorism, including the Lockerbie bombing and the September 1989 bombing of French UTA Flight 772, which killed 170 people—Libya was barred from receiving any economic-assistance funds. But with Libya now off the list, the State Department just last week notified Congress that it had designated $2.5 million for a variety of economic-assistance funds, including the $200,000 to Saif al-Gaddafi’s foundation, intended to “increase transparency” and help “implement political and economic reforms.” The awards to ostensibly promote reforms are especially ironic given how the two foundations actually work, says Hafed Al-Ghwell, a prominent Libyan dissident who lives in the United States. “They are fronts for Kaddafi,” he says about the two groups.

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