Secretary Clinton Brokers a Deal to Fund the Libyan Opposition

The questions on everybody’s mind for the U.S. Secretary of State in Italy focused on the killing of Osama bin Laden. But behind the scenes, Clinton struck an international deal to fund the opposition in Libya.

05.05.11 12:57 PM ET

On a visit to Rome today, U.S. Secretary of State Hillary Clinton made crucial headway with NATO allies in tackling the ongoing chaos in Libya. Clinton and Italian Foreign Minister Franco Frattini met with the Libya Contact Group—made up of representatives from 22 countries and six international organizations—for a three-hour summit that resulted in a unanimous decision to set up a fund to back the Libyan rebels. The fund will initially be fed by international donations and oil sales by the opposition, and will eventually draw from Libyan dictator Muammar Gaddafi’s own frozen assets, including some $30 billion now held in the United States.

Italy also promised to eventually funnel millions of euros of Gaddafi’s frozen Italian assets to the fund as well. Kuwait pledged $180 million to the fund, and Qatar promised an additional $400 million. The United Kingdom declined to pledge any cash to the cause, but said it remained committed to its decision to expel two Libyan diplomats.

The deal came shortly after Clinton’s morning press conference, in which most of the reporters’ questions focused on the death of Osama bin Laden, which has quickly if momentarily overshadowed Libya’s struggle in the global news cycle. One reporter wanted to know Clinton’s thoughts during the bin Laden raid, particularly in one moment where she was photographed covering her mouth in apparent dismay and horror at the live feed of the daring operation. Clinton’s response was coy: “Those were 38 of the most intense minutes,” she said. “I have no idea what any of us were looking at that particular millisecond when the picture was taken.” She also demurred on America’s relationship with Pakistan, which experts predict will fray over suspicions that rogue elements in the Pakistani Army or intelligence services had a hand in protecting bin Laden over the years. “It is not always an easy relationship,” Clinton said. “But on the other hand, it is a productive one for both of our countries.”

During their three-hour summit, the group decided unanimously to set up a fund to back the rebel opposition. It will be fed by international donations and oil sales—and eventually by Gaddafi’s own frozen assets, including some $30 billion now held in the United States.

Clinton also addressed the ongoing democratic uprisings in the Middle East. She had stern words for Syria’s government, warning Damascus that “there are consequences for this brutal crackdown that has been imposed on the Syrian people.” She also addressed whether the U.S. will work to actively remove Gaddafi from power. The issue is a delicate one, given the close relationship between Gaddafi and Italy’s own prime minister, Silvio Berlusconi, and it clearly made Frattini nervous at the morning press conference. Italy has long been one of Libya’s closest allies and the countries still share millions of euros in business deals, which now hang in the delicate balance between war and peace. Ousting Gaddafi in a midnight raid is hardly something Italy wants to be associated with. Clinton took pains to draw out the differences between bin Laden and Gaddafi: “Osama bin Laden was a sworn enemy to the United States and all humanity,” she said, calling Gaddafi a different type of nemesis. Nevertheless, Clinton stressed that it is time for Gaddafi to go. “We are implementing a U.N. resolution to protect Libyan citizens,” she said. “It is abundantly clear that the best way to protect civilians is for him to leave power.”

Clinton will spend the rest of the day meeting with Berlusconi and Italian President Giorgio Napolitano, before addressing the United Nation’s Food and Agriculture Organization tomorrow morning and then heading back to Washington. The next Libya Contact Group meeting will be held in Istanbul in late June.

Barbie Latza Nadeau, author of the Beast Book Angel Face, about Amanda Knox, has reported from Italy for NEWSWEEK since 1997 and for THE DAILY BEAST since 2009. She is a frequent contributor to CNN Traveller, Departures, Discovery and Grazia. She appears regularly on CNN, BBC, and NPR.