US embassy cable - 02MILAN338

UNCLAS SECTION 01 OF 02 MILAN 000338 
 
PARIS FOR RESSLER 
DEPT FOR S/CT, EUR/WE, EB/ESC, DRL/BA, INR/NESA, 
NEA/ENA, PM/SRP 
 
E.O. 12958:  N/A 
TAGS:  PTER, PINR, PINS, PREL, PGOV, PHUM, EFIN, ECON, 
EIND, MARR, MOPS, IT, LY 
 
SUBJECT:  QADHAFI'S SON ON ITALY-LIBYA RELATIONS 
 
1.  SUMMARY: SEIF QADHAFI, SON OF LIBYAN LEADER 
MUAMMOR QADHAFI, SPOKE AT ISPI (INSTITUTE FOR THE 
STUDY OF INTERNATIONAL POLITICS) IN MILAN, JUNE 10 ON 
"LIBYA AND ITALY: ECONOMIC AND POLITICAL ISSUES WITHIN 
THE MEDITERRANEAN AREA."  SEIF QADHAFI, WHO WAS 
INTRODUCED AS THE PRESIDENT OF THE "LIBYAN 
HUMANITARIAN FOUNDATION, HEAD OF THE NATIONAL 
CONSULTING GROUP," AND AN EXPERT ON BUSINESS 
CONSULTING AND ARCHITECTURE, SPOKE ON THE OBLIGATION 
FOR ITALIAN COMPENSATION FOR COLONIAL CRIMES AS ONE OF 
THE PRECONDITIONS FOR BETTER RELATIONS BETWEEN NORTH 
AFRICA AND EUROPE.  HE MENTIONED THE UNITED STATES 
ONLY IN PASSING, SAYING THAT U.S. BASES IN ITALY 
SHOULD NOT BE USED TO ATTACK LIBYA AND THAT THERE WAS 
NO EVIDENCE THAT HIS COUNTRY WAS INVOLVED IN 
LOCKERBIE.  HE SAID THAT LIBYA'S INVESTMENT IN FIAT 
WAS STRICTLY A BUSINESS DECISION.  MANY OF HIS 
STATEMENTS WERE ILLOGICAL, ALMOST BIZARRE, AND THE 
ITALIAN AUDIENCE LEFT SOMEWHAT CONFUSED AND 
UNIMPRESSED.  END INTRODUCTION AND SUMMARY. 
 
ELIMINATE THIS BLACK SPOT 
------------------------- 
 
2.  SEIF QADHAFI BRIEFLY REVIEWED ANCIENT HISTORICAL 
AND CULTURAL TIES BEFORE JUMPING TO ITALY'S OCCUPATION 
OF LIBYA.  HE REFERRED TO MASSACRES AND CONCENTRATION 
CAMPS AND SAID THAT LIBYA IS STILL SUFFERING AND 
PEOPLE ARE STILL DYING DUE TO WHAT ITALY DID.  THIS IS 
THE REASON THAT LIBYA IS BACKWARD TODAY.  LATER IN HIS 
TALK HE SAID THAT ONE MILLION LIBYANS WERE KILLED BY 
THE ITALIANS, MANY IN CONCENTRATIONS CAMPS.  THERE IS 
NO DIFFERENCE BETWEEN THESE DEATHS AND THE JEWISH 
DEATHS IN WORLD WAR II CONCENTRATION CAMPS.  THE 
QUESTION IS NOW HOW TO ELIMINATE THIS "BLACK SPOT." 
 
AND HERE IS WHAT ITALY HAS TO DO 
-------------------------------- 
 
3.  QADHAFI SAID THAT A PERMANENT BILATERAL TREATY AND 
COMPENSATION IS NECESSARY.  A SMALL HOSPITAL, SMALL 
SCHOOL OR CLEARING THE MINEFIELDS IS NOT ENOUGH TO 
ABOLISH THE BLACK SPOT.  WHAT ITALY SHOULD PROVIDE IS 
EDUCATION AND INVESTMENT, EDUCATION BEING THE MOST 
IMPORTANT.  ITALY SHOULD FINANCE SCHOLARSHIPS FOR 
LIBYANS TO STUDY IN ITALY OR IN EUROPE, "AND NOT 10 OR 
20 OR 80, BUT AN IMPORTANT NUMBER."  IN ADDITION, THE 
GOI SHOULD SPONSOR AN EXCHANGE OF PROFESSORS. 
 
4.  QADHAFI SAID THE GOI CLAIMS THAT THEY HAVE NO 
MONEY IN THE BUDGET FOR COMPENSATION, BUT THIS CAN BE 
SOLVED THROUGH INCREASED INVESTMENT INSTEAD. 
INVESTMENT SHOULD BE DIRECT PRIVATE SECTOR TO PRIVATE 
SECTOR.  INVESTMENT FLOWS SHOULD NOT INVOLVE THE STATE 
BECAUSE OF GOVERNMENT CORRUPTION: "LIBYA OR ITALY, IT 
IS THE SAME THING."  HE STRESSED THIS AGAIN LATER IN 
HIS TALK, SAYING THAT FUNDS SHOULD NOT BE CHANNELED 
THROUGH THE LIBYAN GOVERNMENT BECAUSE OF BUREAUCRATIC 
INEFFICIENCY AND CORRUPTION.  MORE SPECIFICALLY, 
QADHAFI PROPOSED THAT THE GOI GIVE TAX RELIEF TO 
LIBYAN COMPANIES THAT LOCATE IN ITALY, ITALIAN 
COMPANIES THAT INVEST IN ITALY, OR ITALIAN BANKS WHO 
MAKE LOANS TO LIBYAN COMPANIES.  THIS, QADHAFI CLAIMED 
WOULD NOT COST ANYTHING TO THE ITALIAN BUDGET. 
 
5.  TRYING TO MAKE THE MORAL ARGUMENT FOR 
COMPENSATION, QADHAFI SAID THIS IS WHAT SWITZERLAND 
DID FOR ISRAEL; SO THE SAME THING SHOULD BE DONE BY 
ITALY FOR LIBYA.  HIS VOICE RISING, GADDAFI SAID, "WE 
HAVE A RIGHT TO BE COMPENSATED.  MEMBERS OF MY FAMILY 
DIED IN THAT WAR."  HE WENT ON TO CLAIM THAT FRANCE 
WAS PRESSURING ITALY NOT TO DO ANYTHING FOR LIBYA 
BECAUSE THEN FRANCE WOULD BE OBLIGATED TO DO THE SAME 
THING FOR ALGERIA.  HE NOTED THAT PRIME MINISTER 
BERLUSCONI HAS BEEN INVITED TO LIBYA, BUT HE CANNOT 
VISIT UNTIL THE COMPENSATION ISSUE IS RESOLVED, HE 
ADDED. 
 
CONDITIONS FOR BETTER RELATIONS WITH EUROPE 
------------------------------------------- 
 
6.  SHIFTING FROM BILATERAL RELATIONS TO REGIONAL 
RELATIONS, HE SAID THAT AN AGREEMENT BETWEEN NORTH 
AFRICAN NATIONS AND THE EU DEPENDED ON CERTAIN 
PRECONDITIONS.  FIRST, EACH SIDE MUST AGREE NOT TO USE 
THEIR TERRITORIES AS A BASE TO ATTACK EACH OTHER. 
THAT MEANS, FOR INSTANCE, THE U.S. COULD NOT USE BASES 
IN ITALY TO ATTACK LIBYA.  SECOND, THE EU SHOULD LIFT 
ITS MILITARY EMBARGO ON LIBYA.  BOTH OF THESE ARE 
VITAL FOR LIBYAN SECURITY AND ARE PRECONDITIONS FOR 
NEGOTIATION.  LATER, HE COMMENTED THAT NATO EXPANSION 
TO THE SOUTH (TO INCLUDE LIBYA) WOULD BE "WISE, A VERY 
GOOD IDEA." 
 
7.  ON THE OTHER SIDE OF THE EQUATION, NORTH AFRICAN 
COUNTRIES MUST SUPPORT DEMOCRACY AND HUMAN RIGHTS.  IF 
THERE WERE DEMOCRACY AND HUMAN RIGHTS IN NORTH AFRICA, 
THERE WOULD BE "NO ILLEGAL IMMIGRATION" AND "NO BOMBS 
IN PARIS."  HE LATER CONDEMNED "FAKE DEMOCRACY" IN THE 
MIDDLE EAST, WHERE LEADERS CONSTANTLY ARE ELECTED WITH 
99 PERCENT OF THE VOTE.  "ONE LEADER RULING FOREVER IS 
NOT DEMOCRACY," HE SAID (WITHOUT IRONY). 
 
8.  TURNING TO IMMIGRATION, QADHAFI NOTED THAT ILLEGAL 
IMMIGRATION IS A BIG PROBLEM IN LIBYA.  ILLEGAL 
IMMIGRANTS ENTER HIS COUNTRY, CAUSING PROBLEMS AND 
COMMITTING CRIMES BEFORE MOVING ON TO ITALY.  BECAUSE 
THE MAJOR VICTIM OF IMMIGRATION IS ITALY, ROME SHOULD 
HELP LIBYA WITH JOBS AND INVESTMENT TO KEEP THESE 
ILLEGAL IMMIGRANTS OUT. 
 
 
LIBYA AND FIAT: STRICTLY BUSINESS 
--------------------------------- 
 
9.  QADHAFI SAID LIBYA'S RECENT INVESTMENT IN FIAT WAS 
A STRAIGHT BUSINESS DEAL.  THE GOVERNMENT PURCHASED A 
PIECE OF FIAT THROUGH A GOL INVESTMENT COMPANY.  IT 
WAS A NORMAL INVESTMENT: "WE HAVE LOTS OF EXTRA HARD 
CURRENCY," HE SAID.  (NOTE:  ACCORDING TO THE ITALIAN 
FINANCIAL PRESS, IN FEBRUARY 2002, THE LIBYAN ARAB 
FOREIGN INVESTMENT COMPANY, LAFICO, PURCHASED 2 
PERCENT OF FIAT.  EARLIER, LAFICO PURCHASED 
APPROXIMATELY 5 PERCENT OF SOCCER CLUB JUVENTUS, WHICH 
LIKE FIAT IS CONTROLLED BY THE AGNELLI FAMILY.  SIEF 
QADHAFI IS A BIG FAN OF JUVENTUS AND IS SOMETIMES SEEN 
AT THEIR GAMES.  COMMENT: SO FAR, THE JUVENTUS 
INVESTMENT HAS TURNED OUT BETTER THAN THE FIAT 
INVESTMENT.  WHILE FIAT IS IN SERIOUS FINANCIAL 
TROUBLE, JUVENTUS WON THE ITALIAN A LEAGUE 
CHAMPIONSHIP IN MAY.  END COMMENT.  LAFICO IS ALSO 
SAID TO OWN SMALL PIECES OF ENI AND TELECOM ITALIA. 
THE LIBYAN ARAB FOREIGN BANK ALSO OWNS 5 PERCENT OF 
BANCA DI ROMA.  END NOTE.) 
 
LOCKERBIE 
--------- 
 
10.  QADHAFI DID NOT BRING UP LOCKERBIE HIMSELF, BUT 
RESPONDING TO A QUESTION FROM THE AUDIENCE HE SAID 
THAT THERE WAS NO EVIDENCE THAT LIBYA WAS BEHIND 
LOCKERBIE.  LIBYA WAS CONDEMNED BEFORE THE TRIAL AND 
THIS IS DISCRIMINATION AGAINST ARABS.  BESIDES, MANY 
OF THE VICTIMS' FAMILIES DO NOT THINK THAT THE 
CONVICTED MAN IS GUILTY. 
 
11.  COMMENT:  THE SPEECH WAS DELIVERED TO AN 
INTERESTED, OVERFLOW CROWD.  HOWEVER, QADHAFI PROBABLY 
DID LITTLE TO ADVANCE ITALIAN-LIBYAN RELATIONS. 
SPEAKING IN ENGLISH, SOFTLY ALMOST INAUDIBLY AT FIRST, 
HE QUICKLY PICKED UP PACE AND VOLUME WHEN HE BEGAN TO 
TALK ABOUT ITALIAN WAR CRIMES AGAINST LIBYA.  HE 
SEEMED FIXATED ON THE NEED FOR ITALIAN REPARATIONS AND 
HIS TALK WAS FULL OF UNREALISTIC, ILLOGICAL AND 
SOMETIMES BIZARRE ASSERTIONS AND RECOMMENDATIONS. 
NEAR THE END HE STARTED TO RAMBLE, AND SOME OF HIS 
STATEMENTS WERE NONSENSICAL, BUT THAT TO COULD HAVE 
BEEN DUE TO LANGUAGE PROBLEMS.  AT THE END, THE 
AUDIENCE ONLY ASKED A FEW QUESTIONS, CLAPPED POLITELY 
AND QUICKLY FILED OUT, A FEW SHAKING THEIR HEADS. 
THEY SEEMED MOST UNIMPRESSED.  END COMMENT. 
 
MCELHANEY