U.S. Drops Financial Sanctions Against Qaddafi Defector

The Obama administration, looking to lure more of Libyan leader Muammar al-Qaddafi's henchmen away from the regime, has agreed to unfreeze the assets of a prominent Libyan official who defected last week.

The Treasury Department announced Monday it would lift financial sanctions against Moussa Koussa. Qaddafi's ex-foreign minister had fled to Britain to escape the fighting between the regime and rebel forces backed by the United States and NATO, marking a significant defection from Qaddafi's inner circle.

The United States is now taking a delicate approach with Koussa.

The ex-minister is suspected of having blood on his hands as a long-time adviser to Qaddafi, and U.S. officials want to interrogate him about possible terrorist activities. But the administration also wants to convince other wavering Qaddafi officials that it's in their self-interest to defect.

David Cohen, undersecretary of Treasury for terrorism and financial intelligence, made clear that the United States was trying to create an incentive for Qaddafi loyalists.

"As we've said from the beginning, these sanctions are preventive and are not intended to be permanent," he said in a statement. "Koussa's defection and the subsequent lifting of sanctions against him should encourage others within the Libyan government to make similar decisions to abandon the Qaddafi regime."

At the same time, he warned that Treasury would soon announce more sanctions against officials other than the 13 already on the list.

"Those who continue to serve in the Libyan government should be put on notice that Treasury will continue to aggressively identify and target senior officials for sanctions," Cohen said.

Dan Senor, a fellow with the Council on Foreign Relations, described the announcement as a strategic move by the United States at a time when its military is pulling back and the war is in danger of entering a "stalemate."

"Trying to flip these Libyan officials could become a substitute for the U.S. playing a more prominent role in trying to drive this through war fighting," he said.

He said western officials will want to get Koussa's insight "on how to peel others way." He noted that, so far, Koussa has not been offered immunity.

"If he's been close to Qaddafi, he's got a lot of blood on his hands and so this is the balance they're trying to strike," Senor said.

Rebels claim Koussa was one of the Libyan officials behind the 1988 bombing that killed 270 people over Lockerbie, Scotland, most of them Americans. A State Department official, asked about Koussa's involvement, said last week that the administration is "pursuing" him for information.

Though the administration is freeing up his assets, the White House said last month that it was looking at the possibility of sending at least part of the more than $30 billion seized from Libyan officials to finance the rebels.

However, the possibility of funding, and even arming, the opposition, has been a touchy subject, amid claims that Al Qaeda has a foothold in the movement. One Algerian official told Reuters this week that Al Qaeda is trying to exploit the conflict to acquire weapons.