The Sentry
From Qadhafi’s instruments to unruly
power brokers
The Dabaibas, rather than being mere pawns of Qadhafi and his children, formed a center of discretionary power in pre-2011 Libya. During the 1990s, Ali al-Dabaiba’s ODAC was known to have been exploited by the Qadhafi family as a tool for illicitly diverting wealth from Libya, including as a means of bypassing international sanctions.
By the mid-2000s, however, the Dabaiba family had gained significant influence of its own, becoming so emboldened that it sometimes operated beyond the regime’s control. In 2007, an anti-corruption inquiry led by a Libyan judge documented a set of severe corruption cases featuring ODAC and Ali al-Dabaiba.
They were prominently cited for their pivotal role in Tripoli-based real estate scams that centered around the unauthorized relocation of government offices and the provision of preferential housing for regime functionaries. The judge found that ODAC was paying exorbitant prices for property that was often not suitable for its declared purpose, and he recommended criminal charges against Ali al-Dabaiba and others.
Despite the report’s thoroughness, few actions were taken, likely because the individuals incriminated were deemed too crucial to the Qadhafi regime. The inquiry did, however, clearly document ODAC’s increasing independence and brazenness under the Dabaiba family’s leadership, marking these as clear trends as early as 2007.
Two years later, under separate circumstances, Seif al-Qadhafi, the dictator’s second son, had then-Prime Minister al-Baghdadi al-Mahmudi informally encourage Libyan law enforcement authorities to investigate Ali al-Dabaiba’s conduct as head of ODAC.
In August 2010, they froze almost all ODAC outlays. The following month, under Mahmudi’s directive, Ali al-Dabaiba was replaced as the head of ODAC. Soon afterward, both Ali al-Dabaiba’s legal troubles and the decision to oust him were eclipsed by the widespread civil unrest that began in early 2011.
From the vantage point of foreign companies engaged in Libya, the uprisings of February 2011 caused a major rupture, compelling tens of thousands of foreign workers, including Arsel’s personnel, to flee the country.
The regime change also presented an opportunity for some companies to try to recover part of their operational losses—including those unrelated to the 2011 uprisings—by blaming the unrest. But those hopes would be largely disappointed.
A carefree trail of impunity
Post-Qadhafi, Libyan justice has been ineffective in scrutinizing the Dabaiba family’s track record from the 2000s. The international response, as well, has been insufficient, especially given the severity of the suspicions. This lack of accountability has contributed to the kleptocratic surge afflicting present-day Libya, with the Derna tragedy being just one of many consequences.
In February and March 2011, to curb the Qadhafi regime’s violent repression of popular uprisings, the United States and the United Nations imposed significant sanctions on Libyan economic institutions. However, the sanctions did not target ODAC, LIDCO, or other vehicles controlled by the Dabaiba family.
The European Union did freeze ODAC’s assets in August 2011, but it dropped those measures a year and a half later. The lack of international scrutiny into ODAC, combined with other factors, such as Ali al-Dabaiba’s concerted efforts in 2011 to fund preeminent anti-Qadhafi factions, helped ODAC survive as an institution.
In 2014, Libyan prosecutors determined that Ali al-Dabaiba had embezzled between $6 billion and $7 billion while he was the head of ODAC from 1989 to 2011.
The Libyan Attorney General’s Office asked Scottish authorities to initiate an investigation and even issued an Interpol red notice seeking him on that basis in 2014. Shortly thereafter, however, Abdelqader Radwan, the attorney general under whom most of these actions were taken, retired. His departure, coinciding with the outbreak of a new civil war in Libya, caused the investigation into the Dabaiba family to wane.
Meanwhile, ODAC carried on operating in post-2011 Libya under the leadership of Sharif Ibrahim Takita, a technocrat known to be aligned with the Dabaiba family. In 2016, a new UN-backed government in Tripoli, led by the moderate Fayez al-Serraj, ushered in a period when pragmatic Libyan factions sidelined hard-core revolutionaries, rendering the Libyan capital less hostile to former Qadhafi associates.
The following year, Abdelhamid al-Dabaiba, who had never relinquished his leadership of LIDCO, resurfaced in the political sphere. In October 2020, the United Nations Support Mission in Libya (UNSMIL) selected Ali al-Dabaiba to serve on a committee of 75 Libyan citizens that was asked to guide the preparations for Libya’s first nationwide elections in seven years.
The UN-backed committee ultimately selected Ali al-Dabaiba’s cousin Abdelhamid Dabaiba as the new prime minister amid credible vote-buying allegations. Mere months after taking office in 2021, Prime Minister Abdelhamid Dabaiba announced his intention to resuscitate “stalled projects in Libya” through ODAC.
While the body is notably less active than before 2011—many construction negotiations now circumvent it, particularly in the east—ODAC still possesses some relevance. The designs, blueprints, financing schedules, and administrative groundwork that ODAC prepared years ago for numerous unfinished projects still provide a foundation for several companies that hope to revive their contracts.
This is particularly true of the Turkish firms active in Libya before 2011. Since then, most input prices have risen substantially, necessitating a complete review and adjustment of original contracts.
But despite the changes in the economic environment, those Turkish firms that have managed to avoid bankruptcy since 2011 have demonstrated interest in reviving their old contracts with ODAC. A return to Libya would enable them to recover what they perceive as payments owed to them. The Libyan side, however, is not eager to accommodate them.
The Haftar Family’s Stranglehold
on Derna’s Reconstruction
Although the Dabaiba family holds power in present-day Tripoli, it wields no influence over Derna’s current reconstruction, which is tightly controlled by Field Marshal Khalifa Haftar and his sons, mainly Saddam, Belqacem, and Khaled. Their style of authoritarian kleptocracy, although employing different tactics and unfolding in a drastically changed Libya, presents risks analogous to the Dabaibas’ own harmful practices.
Don’t ask, don’t tell, don’t know
An array of unilateral measures enacted after the Derna floods placed the Haftar family at the helm of recovery and reconstruction efforts, granting them power over almost every facet with minimal accountability. Their near total control significantly increases the risk that a large portion of the Libyan public wealth allocated for reconstruction will be misappropriated.
Shortly after the 2023 floods occurred, Khalifa Haftar appointed his son Saddam to spearhead post-disaster security and oversee the international rescue operations. As part of their bid to deepen their supremacy in eastern Libya, the Haftars prevented Tripoli-based Prime Minister Dabaiba from visiting Derna, while Benghazi-based Prime Minister Usama Hammad was asked by the Haftar family to stay out of any decision-making related to the reconstruction.
Quite significantly, in February 2024, the speaker of the House of Representatives issued a law appointing Belqacem Haftar, another son of Khalifa Haftar, as the head of the Libya Reconstruction Fund, which selects, negotiates, awards, finances, and manages many infrastructure projects in Haftar-held territories.
The official legislation bars the Audit Bureau, the Administrative Control Authority, and other Libyan regulatory bodies from examining Belqacem Haftar’s decisions or requiring transparency in his management of the reconstruction.
Other state entities, such as the Ministry of Planning in Tripoli, are also cut out. Even the House of Representatives itself lacks both oversight and knowledge regarding the specifics of most contracts signed by the Haftars. A spokesperson for the House of Representatives did not respond to a request for comment.
When it comes to Derna, Belqacem Haftar’s Reconstruction Fund has been signing contracts through an opaque, unilateral selection process that eschews competitive tendering. What’s more, the total sum of contracts signed by Belqacem Haftar for the reconstruction of Derna could soon reach approximately 12 billion dinars ($2.4 billion).
In July 2024, the House of Representatives passed a unified national budget law, which includes allocations for Libya’s reconstruction. Under this framework, the Central Bank of Libya (CBL) will likely review each project proposed by Belqacem’s Reconstruction Fund, deciding case by case whether to issue the letter of credit essential for each project’s realization.
This leaves many vulnerabilities unaddressed, as the CBL is not intended to act as a law enforcement or supervisory body responsible for ensuring the integrity of infrastructure contracting. When asked by the press how his Reconstruction Fund will finance its work, Belqacem expressed his confidence in Libya’s official budget law, but remained vague about the details.
Belqacem Haftar’s Reconstruction Fund is not the only infrastructure vehicle fully controlled by the field marshal’s family. Even before the floods in Derna, reconstruction was already a top priority for eastern Libya’s rulers, an emphasis that had translated into a proliferation of committees and investment organs.
One consequential Haftar-linked player in the reconstruction space is the opaque National Development Apparatus, headed by Jibril al-Badri, who is known for his close ties to Saddam Haftar. All of this means almost complete opacity under the Haftar family’s rule: The Libyan public, Libya’s regulatory bodies, and international actors have little, if any, access to an overall reconstruction plan or to details about the contracts, the companies engaged, the composition of consortiums, the financial allocation for each project, the scope of work, or the origins of the funding.
Across Libya, illicit activities have been on the rise, including in territories under the Haftars’ rule. Amid this kleptocratic boom, the opacity of the publicly funded reconstruction process is especially concerning, as the Haftar family and its associates may exploit it for personal gain.
Possibilities in the context of infrastructure contracts include letter of credit fraud and money laundering. If a lot of construction business is processed through eastern Libya-based banks, the Haftars and their associates would find it easier to perpetrate such schemes under the guise of legitimate work by private contractors.
_____________________
