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As Qaddafi Falls, K Street Rises As Qaddafi Falls, K Street Rises

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As Qaddafi Falls, K Street Rises

Two Libyan dinars -- a rebel-made fake one (top) and an official one (bottom) -- were on display at a market in the rebel stronghold city Benghazi in this April photo.(MARWAN NAAMANI/AFP/Getty Images)

photo of Chris Frates
August 23, 2011

Influence peddlers who once worked for Libyan leader Muammar el-Qaddafi’s regime are scrambling to publicly sever ties with the strongman while their competitors are helping his country's rebels gain a valuable foothold in Washington.

After years spent working under the radar, public-affairs firm Brown Lloyd James and the consultancy Monitor Group this summer disclosed millions of dollars earned working on behalf of Qaddafi’s government, according to disclosures filed retroactively with the Justice Department.

On the other side of the fight, Patton Boggs and the Harbour Group have signed on with the Libyan Transitional National Council, which the United States, Canada, Britain, Spain, and Germany now recognize as the country’s legitimate government. Both firms worked to help the council gain that recognition after being retained this spring.

 

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And the firms are giving Libya’s new government a sweet deal on their services. Patton Boggs is charging the council by the hour with a $50,000 monthly cap and an agreement not to seek payment until the rebels have ample funds. The Harbour Group, meanwhile, is working pro bono. Of course, the discounts reflect a move by both companies to get in on the ground floor of what could be a long-term, multimillion-dollar relationship.

Ali Suleiman Aujali, the TNC ambassador to the United States, is working to get the transitional government access to roughly $35 billion of Qaddafi-related funds the United States froze after the uprising began.

David Tafuri, a partner at Patton Boggs, recently traveled to the rebel stronghold of Benghazi to plot strategy with transitional government leaders on how best to get some of that money unfrozen to address humanitarian needs and fund the political transition. Most of his efforts have primarily targeted Treasury and State department officials, Tafuri said, but he has also found bipartisan support on Capitol Hill.

Sens. John Kerry, D-Mass.; John McCain, R-Ariz.; Joe Lieberman, ID-Conn.; Tim Johnson, D-S.D.; and Marco Rubio, R-Fla., have backed releasing some of the money for humanitarian purposes; Johnson sponsored a bill to that effect, Tafuri said, but the legislation got lost in the furor over raising the debt ceiling. Now, the TNC is looking to the Obama administration to release the money through executive order or to have Treasury direct banks to release some of the funds to the rebels, he said.

Tafuri and the Harbour Group’s Richard Mintz spent some of Monday shepherding Aujali between meetings with officials and interviews with journalists. Tafuri handles much of the legal and lobbying work, while Mintz does media and public relations. Aujali’s team met with officials from the Treasury and State departments and did about a dozen interviews with English- and Arabic-speaking outlets.

Much of the day was spent answering questions about the TNC, Mintz said. Some of that groundwork was laid in May during the Washington visits of rebel government leaders Mahmoud Jibril and Ali Tarhouni, who were introduced to White House, State Department, and congressional officials.

“They are making the connections with the right people. They are moving at the right time. They are making the right statements,” Aujali said of Mintz and Tafuri. “What more do you need?”

And while Mintz and Tafuri are building friendships with an eye toward opportunity, others are publicly fleeing relationships that have become liabilities.

In March, The Boston Globe reported that Monitor Group, a consulting firm founded by Harvard professors, had received $250,000 a month between 2006 and 2008 for services intended to generate good press and “international appreciation of Libya.”

In July, the group terminated its relationship with Libya and reported taking in more than $6.7 million in fees and expenses between October 2006 and January 2009, according to disclosures filed with the Justice Department. The law requires those working to influence U.S. policy or public opinion on behalf of a foreign principal to regularly report.

In August, W2 Group, a holding company whose public-relations firm has represented Rwanda and Jordan, reported earning $75,000 for helping Libya with a 2007 press event. Company chairman Larry Weber told National Journal that one of his firms was subcontracting with Monitor Group and that none of his firms have done any business on behalf of Libya since.

And public-affairs firm Brown Lloyd James dumped several years worth of disclosures in July detailing its work on behalf of Libya. The firm organized Qaddafi’s trip to the U.N., for which it originally reported receiving about $1.3 million in reimbursement for logistical expenses. But in an amended disclosure and a statement sent to NJ, the firm said the figure it reported was incorrect. It received about $575,000, which left “a significant number of expenses … unpaid,” the statement said.

The firm explained the confusion by saying, “As a small firm, we have struggled with the speed of compliance and our registrations were admittedly a bit of a mess,” adding that it has beefed up staff to “ensure these registrations are done in a timely way.”

Between January 2008 and April 2010, Brown Lloyd James had a contract worth almost $1 million with Hassan Tatanaki, a businessman with ties to Libya’s oil industry. But an official with the firm said it has only collected about half that amount.

“The scope of our work included assisting the Libyan nationals deepen its ties to U.S. and international political communities by assisting [Qaddafi’s son] Saif (sic) Qaddafi’s initial efforts to organize student exchange programs and university research programs with Libya,” the firm wrote in its disclosure.

In a statement, Brown Lloyd James said, “Hassan played an important role in trying to help his countrymen form bonds with Americans through business, the arts, education, and media. … When the Libyan regime proved irredeemable in Hassan’s eyes, beginning more than a year prior to the so-called ‘Arab Spring,’ he grew disenchanted with his work, and our efforts to create a bridge between Libya and the West ended.”

The firm’s statement ended, “We do not currently perform any work in Libya.”

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