On Top of Everything Else, Now Libya Has a Corruption Scandal to Worry About

For the last two months, Libya has faced its worst oil crisis since the 2011 uprising. Ever since the Petroleum Facilities Guard units in Cyrenaica accused government officials of corruption in oil sale deals, crude oil exports have shuddered to a halt. These claims were magnified by the news, revealed in September, that officials in Tripoli had bribed the federalists to give up on their demands. But rather than yield to the government’s offer, the federalists chose to expose the government’s "corrupt practices," which are now being linked to Prime Minister Ali Zeidan himself.

In August, supporters of the 1951 constitution’s decentralized, federalist state declared themselves in control of the Cyrenaica region, which includes approximately 60 percent of Libya’s oil resources. They announced that they were shutting down all the oil terminals in eastern Libya, effectively holding the government in Tripoli ransom by depriving it of essential revenues. The head of the federalist group, an ex-revolutionary commander and former head of Cyrenaica’s Oil Facilities Guard named Ibrahim Jathran, immediately launched a charm offensive in eastern Libya to foster support for his cause. Jathran insists that the central government is complicit in the oil sector’s widespread corruption, and backs his claims with tangible evidence such as official documents and recorded statements from officials. He’s refused the government’s repeated demands to reopen the oil terminals, insisting that they first conduct a transparent and independent investigation.

In a recent victory, Jathran was able to trick government officials to offer bribes to end the conflict by luring them into unannounced negotiations. The head of the General National Congress (GNC) energy committee, Naji Mokhtar — who is also an owner of several petrol stations in Libya — offered Jathran up to 30 million Libyan dinars (more than $23 million) in both cash and authorized checks.

Jathran exposed the plot during a press conference on Sept. 23, just a few hours after he’d secured all the evidence he needed, including bank transfer receipts and the checks signed by Mokhtar. The announcement sent shockwaves throughout Libya and prompted a quick response from Mokhtar, who denied Jathran’s claims that he made any payments — only to come clean in a TV appearance less than 48 hours later, saying he had acted in an individual capacity and out of good will. The federalists have challenged his claims, insisting that Prime Minister Zeidan (pictured above) authorized Mokhtar’s actions and deposited the required funds into his accounts so Mokhtar could act on his behalf.

Indeed, after Prime Minister Ali Zeidan’s brief abduction earlier this month, his opponents claimed to have evidence that implicates Zeidan in the bribes scandal. The evidence showed documents by which the prime minister authorized payments to Jathran and his men. However, the public prosecutor refused to make a statement on the subject, insisting that investigations are continuing, and that the government would only comment on it once the investigations conclude.

In a press conference this past Sunday, the prime minister stated he had knowledge of the payment to Jathran, but claimed the payment was a gesture of goodwill in order for Jathran to withdraw his men from the oil terminals and handover their weapons.

Despite this assertion, Libyan media and activists are raising questions about whether the authorities were actually attempting to cover up the real and existing corruption Jathran sought to expose. Further, the incident begs an important question: how many other "goodwill" payments have the authorities made? This bribery incident has raised fears that, instead of spending money on much-needed development, the authorities are throwing money at any problem they don’t want to address. In the two years since Qaddafi’s fall, Libya has had two budgets totaling more than 114 billion Libyan dinars — yet there’s been no visible improvement in conditions on the ground. No one has been able to explain convincingly how the money was spent, abetting rumors of widespread corruption and the mismanagement of public money.

Lawmakers launched an investigation immediately after Jathran’s press conference and referred the matter to the public prosecutor. In one of the hearing sessions, GNC President Nuri Abusahmain presented evidence that Mokhtar’s personal account was indeed accredited with 3.7 million Libyan dinars by an official government account, which would have required the authorization or at least the knowledge of the prime minister himself. Shortly after this transaction, Naji Mokhtar deposited 2.5 million dinars into Jathran’s bank account. These details have now been corroborated by the prime minister himself, but he continues to insists that this was not a bribe, but rather a gesture of goodwill.

Many in Libya, however, are skeptical about government-sanctioned investigations, which are often deployed to absorb public anger. Dozens of continuing investigations related to assassinations, kidnappings, and administrative irregularities have yet to conclude; some have been stretched over more than two years. All of this is leading the public to question whether the government is truly willing to be transparent and fight corruption. Naji Mokhtar and those who facilitated his actions could face up to three years in prison, yet Mokhtar continues to participate in GNC sessions.

Failure of the government to address the closure of the oil terminals has led the International Monetary Fund (IMF) to reevaluate the performance of the Libyan economy, projecting that Libya’s GDP will contract by 5.1 percent in 2013 after previously projecting growth of over 20 percent. Zeidan’s government promised to make serious efforts to enhance transparency and fight corruption, but these promises are yet to translate into real action on the ground. In January 2013, a few months after Zeidan’s appointment as prime minister, the government stopped publishing information about its oil sales deals and revenues, which was considered a huge setback for transparency in post revolution Libya. These recent events have galvanized public support for Jathran’s cause and weakened support for the government in eastern Libya. The lack of official transparency seems to have affirmed the claims of widespread corruption, reinforcing a public sentiment that could be summed up as follows: "Better to keep the oil under the ground than see the revenues wasted."

The government and the GNC need to start practicing what they preach and honor their promises of transparency and accountability. If government officials aren’t held accountable for committing punishable criminal offenses, it’s hard to expect ordinary citizens to trust the government and its efforts to complete Libya’s democratic transition. This culture of impunity not only undermines the effectiveness of the democratic process, but could also pave the way for undemocratic forces to dominate the scene.

Mohamed Eljarh is the Libya blogger for Transitions. Read the rest of his blog posts here.