Libya set to get back $37 billion from U.S.

@CNNMoney October 20, 2011: 3:45 PM ET

Libya's frozen assets in the United States are ready to be thawed.

WASHINGTON (CNNMoney) -- Even before Moammar Gadhafi's death Thursday, the Treasury Department was already starting to thaw some $37 billion worth of frozen Libyan assets to make them available to the new government in Tripoli.

The new Libyan government will get all the money. Eventually.

Earlier this year, the United States froze its piece of what some analysts believe to be as much as $150 billion in assets that had been available to the Gadhafi regime around the world.

Outside of the United States, those assets range from real estate to stakes in the Italian bank UniCredit, the British publisher Pearson, which owns the Financial Times, and Italy's soccer club Juventus.

In September, the United Nations gave the United States the green light to release $1.5 billion in U.S.-held Libyan assets as humanitarian aid to the Transitional National Council, which was recognized as the new government of Libya in July. So far $700 million has been distributed, according to Treasury.

"We remain in close contact with the TNC, the State Department and our international partners, and are committed to releasing assets frozen worldwide in a manner consistent with the wishes of the Government of Libya," a Treasury spokeswoman said.

Last month, Treasury also partially lifted some Libya sanctions. That opened the door for U.S. companies and individuals to do business with the Libyan National Oil Corp. and other companies in Libya, as long as the transactions don't benefit anyone affiliated with the Gadhafi regime.

The question of what to do with the frozen assets has been a big talker in Congress, especially in the wake of mounting budget deficits that have only widened with years of navigating conflict in the Middle East and Africa.

Some lawmakers want to use frozen Libyan assets to reimburse NATO countries for military operations. Others want to link frozen assets to Libyan cooperation with investigations into Gadhafi-era terrorist attacks, according to a Congressional Research Service report released Sept. 29.

Sen. John McCain told CNN on Thursday that, during his visit to Tripoli a few weeks ago, new government officials told him they're willing to reimburse the United States for its role in helping end the Gadhafi regime. So far, that tab has run about $1.2 billion, according to Pentagon and State Department officials.

"Obviously, it's their money," said McCain, in Arizona Republican on the Senate Armed Services Committee. "They are willing to reimburse us and our allies. They're obviously are going to be a very wealthy country."

The Transitional National Council has been lobbying for months for a broader release of frozen funds for its use.

And international financial analysts say that, using Iraq as an example, the United States will try to release those funds, which will likely go first to reconstruction, as soon as possible.

"It's anyone's guess on how quickly we can free that up, but they'll probably move pretty quickly," said Glenn Simpson, a senior fellow in corruption and transnational crime at the International Assessment and Strategy Center.

The Congressional Research Service report said the Transitional National Council will be under pressure to maintain order and support for the new regime.

"While a lively political atmosphere has emerged in opposition-controlled areas, political support for the TNC among the broader population may be contingent on the council's ability to provide basic services and financial support via salaries and subsidies," the report stated.

Indeed, the report suggested that the transition period will require "sustained attention and resources beyond the scope of the current fighting."

McCain and other Republicans want the United States to use whatever funds are available to help some 30,000 wounded in the effort to take down the Gadhafi regime. He called it a "key requirement," saying the new Libyan government has told him it would reimburse the United States when it gets access to frozen funds.

"They don't know how to care for these kinds of wounds, we could create enormous goodwill in helping out in that respect," McCain said.

- CNN's Jennifer Rizzo and Jamie Crawford contributed to this report. To top of page

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