A powerful bipartisan group of senators led by Banking Committee Chairman Tim Johnson (D-S.D.) is proposing to give the Obama administration the authority to seize up to $10 billion worth of assets owned by the Libyan government, liquidate those assets and spend the money on humanitarian efforts in Libya.
Johnson said his bill, the Libyan Assets for Humanitarian Relief Act, is based on a proposal that the Obama administration proposed to Congress some weeks ago.
The issue of taking Libyan assets falls under the jurisdiction of Johnson's Banking Committee. His bill is co-sponsored by ranking member Richard Shelby (R-Ala.). The measure is also co-sponsored by Foreign Relations Committee Chairman John Kerry (D-Mass.), Armed Services Committee Chairman Carl Levin (D-Mich.) and ranking member John McCain (R-Ariz.), Homeland Security and Government Affairs Committee Chairman Joe Lieberman (I-Conn.) and Sen. Jack Reed (D-R.I.), a senior member of the Armed Services and Banking committees.
The bill would allow the president to seize $8 billion in Libyan government assets that are thought to be located within the United States, plus another $2 billion if needed to "avert an imminent humanitarian emergency." Johnson estimates that $200 million of this is already in cash in the U.S. and "available for immediate seizure and use to support humanitarian efforts in Libya."
Once passed by Congress, the president would be able to seize $4 billion immediately, and the second $4 billion could be taken and used after a 30-day notification period. Congress would have the ability to deny that second seizure by passing a joint resolution of disapproval. The additional $2 billion could be seized after the president certifies that there is a humanitarian emergency in Libya.
Johnson defended the bill by saying it would essentially allow the U.S. to distribute Gadhafi's assets back to his own people.
"It would effectively give the true owners of these assets — the Libyan people — access to some of their own money to provide relief for Libya's citizens," he said.
He also said there is precedent for this seizure going back to World War I, and as recently as the last decade. "The latest example is when we seized and used a portion of Iraqi government assets in 2003 to provide urgent reconstruction assistance and other forms of support for the people of Iraq," he said.
Any assets seized would be managed by the State Department, and would be spent on non-government humanitarian relief organizations now working in Libya. The bill would establish accounting and congressional reporting requirements on how the money is spent.
Kerry and McCain are among the senators who have supported the Obama administration's decision to intervene in Libya, in contrast to many in the House who have sought to limit military involvement there.