By Michael Isikoff National investigative correspondent
NBC News
updated 2/28/2011 2:50:03 PM ET 2011-02-28T19:50:03

The U.S. government’s condemnation of Moammar Gadhafi’s regime in recent days followed an eight-year period in which U.S. and British leaders sought to appease the Libyan dictator and play down his human rights abuses in an effort to open up his oil rich country for lucrative business deals. 

Those policies — after years of international sanctions — later proved profitable for some of those officials, as they left government and went to work for companies doing business in that country.

The chief U.S. diplomat who negotiated the restoration of U.S.-Libya relations was later hired as a vice president for Bechtel, the giant engineering company, and put in charge of securing new business in Libya. The top British spymaster who helped arrange for Gadhafi to give up his nuclear weapons program was then hired by BP to oversee the oil company’s massive exploration deal in Libya.

Now, the efforts to curry favor with Gadhafi — endorsed by both the Bush and Obama administrations — are triggering harsh reactions in some quarters amid the reports of the Libyan dictator's violent suppression of the popular revolt inside his country. 

“All those people in the diplomatic world who thought somehow he would be a modern progressive leader should be ashamed of themselves,” Rabbi Stephanie Bernstein, whose husband was among the 270 people killed in the Libya-orchestrated 1988 bombing of Pan Am Flight 103, told Al-Jazeera last week. “When we make it possible for a brutal dictator to stay in power and oppress his own people we are complicit.”

Read more reporting by Michael Isikoff in "The Isikoff Files"

After Gadhafi agreed to give up his nuclear and chemical weapons programs in 2003, the administration of former President George W. Bush and British Prime Minister Tony Blair’s government moved to “normalize” relations with Libya. The one-time pariah state was removed from the list of state sponsors of terrorism, economic sanctions were lifted and full diplomatic relations were restored.

(In fact, there are now doubts about whether Gadhafi lived up to his bargain. A video recording has surfaced that allegedly shows chemical and biological weapons that have been seized in the past two days in Misrata, Libya, from a "security brigades' storage unit" by rebels opposed to Gadhafi’s regime.)

Gadhafi himself was treated to visits from a parade of senior officials, including Blair in 2004 and 2007 and then-U.S. Secretary of State Condoleezza Rice in 2008. (Gadhafi had previously heaped praise upon Rice, telling Al-Jazeera, "I support my darling black African woman. ... Leeza, Leeza, Leeza. ... I love her very much.")

Obama continues courtship
The move to cultivate Gadhafi continued under President Barack Obama’s administration. In July 2009, Jeffrey Feltman, the assistant secretary of state for near eastern affairs, traveled to Tripoli and promoted greater military cooperation between the U.S. and Libya to fight terrorism. When asked about  Libya’s human rights records (sharply criticized in multiple State Department reports), Feltman said that would not be an obstacle for Obama in securing a closer “partnership” between the two countries.

Obama “is not in the business of standing up and pointing fingers when he sees others do not live up to … these principles,” Feltman said during his trip when asked about past U.S. criticism of Libya’s human rights record.

At about the same time, prominent U.S. lobbying firms got big contracts to represent Gadhafi’s regime in Washington and burnish its international image.  And the chief of a business group that lobbied Capitol Hill for closer ties with Libya landed a top post in Hillary Clinton’s State Department.

Among the examples of the “revolving door” relationships involving top U.S. and British officials and big Western corporations doing business in Libya:

  • David Welch. The senior U.S. diplomat who led the negotiations that restored full diplomatic ties between U.S. and Libya, Welch quit the State Department at the end of 2008 and immediately went to work as a vice president for Bechtel, responsible for the company's Middle East and European divisions.. Among his duties: landing Bechtel contracts to build power plants and other projects in Libya. Bechtel announced last that it had opened up a new office in central Libya “to support expansion of business in the country.” A spokesman for Bechtel said the company's current projects in that country, including construction of a major new power plant, were begun prior to Welch joining the company.
  • Bob Livingston. A former Louisiana congressman and chairman of the House Appropriations Committee, Livingston’s Washington lobbying firm — the Livingston Group — signed a $2.4 million contract to represent Libya in Washington in 2008. Livingston told Fox8-TV last week he later “fired” Libya after Gadhafi’s government gave a hero’s welcome to Abdelbaset Ali al-Megrahi, the convicted Lockerbie bomber, after he was released from a Scottish prison and returned to Libya in August 2009.
  • David Goldwyn. An international energy consultant who now serves as the State Department’s “coordinator for energy affairs,” Goldwyn previously served as executive director of the U.S.-Libya Business Association, a consortium of major oil companies (including BP, ExxonMobil, Chevron and Halliburton) and other multinationals that lobbied for closer ties with Libya in order to facilitate new business opportunities. Goldwyn testified before Congress on the issue and, after leading a delegation of business executives to Tripoli in December 2008, talked about the “fantastically warm reception” they received from senior Libya officials. A State Department spokesman said that in his new job, Goldwyn does not work on Libya affairs.

The U.S. cultivation of Gadhafi was overshadowed by an even bigger effort to curry favor with the Libyan dictator by the British government, as documented in a report to Parliament last month.

That report showed that under the previous Labor governments of Blair and Gordon Brown, the British government went to unusual lengths to please Gadhafi, in part to nail down a $900 million oil exploration deal that BP had signed in 2007.

A key BP consultant on the project: Mark Allen, the former MI6 British spymaster for the Mideast who developed a personal relationship with Gadhafi in U.S. and British negotiations aimed persuading him to give up his nuclear program in 2003.

Documents released in the British government report shows that Allen and another BP executive personally lobbied British officials about the importance of signing a “prisoner transfer agreement” with Libya that might allow for the release of Al-Megrahi, the convicted Lockerbie bomber. Libyan officials had warned that the failure to release al-Megrahi would jeopardize the BP oil deal. (BP has consistently declined to comment on Allen’s role, but has insisted that the company never directly lobbied the British government for al-Megrahi’s release.)

(Libya’s former justice minister,  Abdel Jalil, has said in recent days he has “proof” that the bombing was ordered by Gadhafi and that al-Megrahi, a former Libyan intelligence agent, threatened to “spill the beans” if the Libyan leader did not arrange his release from prison.)

The British government report included the release of friendly letters that Brown wrote to Gadhafi, taking a personal interest in his family, extending Ramadan greetings, and expressing his interest — as he put in one Sept. 27, 2007, note — in “developing a close and productive relationship with you personally.” That letter included plugs for the BP oil deal and approval of a separate deal by General Dynamics UK and the European consortium MBDA to sell a tactical air defense system to Libya.

Brown’s government was sharply criticized in the report for making a policy decision – never publicly stated — to secure al-Megrahi’s release by the Scottish government. Brown, in a statement after the report was released last month, called the Lockerbie bombing “an unspeakable act of terrorism” and said he never pushed the Scottish government to release the convicted bomber. He also emphasized that in another letter he sent Gadhafi in August 2009 he told the Libyan leader “there should be no public celebration in Libya if he (al-Megrahi) were released” — a plea that was ignored by Gadhafi.

The policy of appeasing Gadhafi now may be causing at least some of those who implemented it some second thoughts. Blair, who twice traveled to Tripoli to meet with Gadhafi in 2004 and 2007, last on Friday personally called the Libyan leader and asked him to stop killing protesters.

In the U.S., Elliot Abrams, a former National Security Council official in the Bush administration who handled Mideast affairs, wrote an op-ed in the Wall Street Journal on Friday defending the decision to lift sanctions against Libya in exchange for him giving up weapons of mass destruction.

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“Seen from this bloody February of 2011,” Abrams wrote, “the agreement with Libya was still the right policy. Gadhafi in his bunker with control over missiles, chemical weapons, and a rudimentary nuclear program is a terrifying thought.”

But Abrams said he hoped that the Libyan people would not remember the U.S. only for the most recent chapter of its relationship with Gadhafi.

“Gadhafi’s “vicious regime has left Libya far worse than he found it on the day of his coup in 1960,” Abrams wrote. “Like Idi Amin and Emperor Bokassa, Gadhafi will soon join the pantheon of grotesque dictators who leave their countries in ruins. Given the last years — when quiet disapproval replaced forcefully denunciation as U.S. policy — we can only hope that Libyans remember the decades when we were Gadhafi’s worst enemy.”

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Video: On the brink of civil war in Libya

  1. Closed captioning of: On the brink of civil war in Libya

    >>> on the ground in libya tonight there is new pressure on gadhafi as well. those who want him out, as we said, are moving closer to the capital. and there's high sangite about what may happen next. jim maceda is in tripoli tonight. good evening.

    >> reporter: gadhafi may have told foreign journalists today that his people love him but anti- gadhafi forces have never been closer to the capital. despite a ring of soldiers and heavy armor around the city, inside libyans were daring to protest. this funeral for a man shot in the head by a sniper turned into an anti- gadhafi demonstration. but just as quickly ended after someone fired a round. and as people here heard report of opposition forces moving closer to the capital, there were signs of growing anxiety. many are standing hours outside banks to collect a $400 handout from the regime in a desperate attempt to buy support before the chaos strikes. everyone here seems to expect civil war , and the government stokes the fear.

    >> hundreds of thousands, and i repeat, hundreds of thousands of libyans will be killed and destruction everywhere for possibly year to come.

    >> reporter: throughout libya battlelines are being drawn. this amateur video apparently shows a gun battle raging between pro and anti- gadhafi forces in misrata, site of an air business about 100 miles east of tripoli with both sides fighting to a standstill. further east in benghazi, under opposition control, volunteers signed up to join in the battle and a transitional government is taking shape to run day-to-day affairs. but back in tripoli , gadhafi 's regime remains in charge. this weekend, gadhafi 's son saef visited supporters brandishing an assault rifle and promising more weapons. everything is fine, he said. we're going to be victorious.

    >> you can see the smoke.

    >> reporter: but the government has had to bomb its own weapons deep oes deep inside rebel controlled territory to keep the other size from using them. the opposition is now on tripoli 's doorstep, barely 30 miles away in zawiya. these scenes captured sunday by international news cameras show what was once gadhafi 's heartland have become a den of protests. thousands called on their lead are to step down protected by soldiers with tanks and machine guns. there's a real sense of foreboding here, brian. many libyans believe gadhafi when he says he will turn this country red with fire rather than be defeated.

    >> jim maceda in tripoli for

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