Qaddafi’s claim over the Gulf of Sidra. The exercise was tentatively planned for late summer. It would boldly yet peacefully assert U.S. rights in international waters and airspace and would demonstrate to America’s friends and adversaries in the Middle East the United States’ commitment to peace and stability in the region. The Pentagon spearheaded the planning of the exercise, but other departments and agencies were involved in the process owing to the sensitive nature of it. One day before the start of the exercise Newsweek reported that the Reagan administration “will test Qaddafi’s reactions—and those of his allies in Moscow—by staging war games inside the gulf.” According to the magazine the maneuvers would serve as the administration’s “first direct challenge to the Libyan strongman.”54 (Details of the FON exercise and its surprising outcome are presented later in this chapter.)
Regarding the diplomatic components of the new Libya strategy, the administration pursued several initiatives. First it appealed to U.S. allies in Europe, Africa, and the Middle East to join the United States in condemning and isolating Libya. Several European governments advised the administration not to confront Qaddafi publicly because such an approach might strengthen him at home and enhance his stature throughout the Third World. On the other hand, President Sadat, who once described Qaddafi as “a lunatic,” encouraged American efforts to pressure the Libyan leader. Second, the administration pledged diplomatic support and significant increases in military assistance to several of Libya’s neighbors in North Africa, namely Egypt, Sudan, Tunisia, Algeria, and Morocco.55 Meanwhile, strong evidence emerged that Qaddafi’s liquidation campaign against Libyan exiles had reached the United States, which had a profound effect on diplomatic relations between the United States and Libya.
In October 1980 Faisal Zagallai, a graduate student at Colorado State University and one of the leaders of the Libyan exile dissident community, was grievously wounded when he was shot twice in the head by an assailant using a .22 caliber pistol. Incredibly, the Jamahiriyya Arab News Agency (JANA), the official information bureau of the Libyan government, announced that the attack had been carried out by one of Libya’s revolutionary committees. The FBI traced the gun to a former U.S. Army Green Beret, Eugene Tafoya, who had been recruited by the Libyan government and was serving as a Libyan agent. When Tafoya was arrested on 22 April 1981 investigators found in his possession an address book containing the names of other Libyan exiles living in the United States. The publicity over Tafoya’s arrest supported the Reagan administration’s efforts to paint Qaddafi as an international outlaw and practitioner of state-sponsored terrorism. The arrest also led to the first public action taken by the administration against the Libyan government.56
On 6 May 1981 Haig ordered the closure of the Libyan people’s bureau in Washington and gave the twenty-seven Libyan diplomats posted there five days to leave the United States.57 The official State Department announcement cited “a wide range of Libyan provocations and misconduct, including support for international terrorism.” The statement also noted that the United States was disturbed by “a general pattern of unacceptable conduct” by the Libyan government, which “is contrary to internationally accepted standards of diplomatic behavior.” The State Department also warned U.S. citizens not to travel to Libya and advised all Americans living there to leave.58 The closure of the people’s bureau was Reagan’s first signal to Qaddafi that more serious consequences were to follow if he did not curtail his involvement in international terrorism.59
One month later the Reagan administration took another step to isolate Qaddafi. On 2 June Chester Crocker, the assistant secretary of state for African affairs, announced that the United States would support all African states that opposed Libyan intervention in their countries. “The administration . . . is deeply concerned about Libyan interventionism in Africa and in particular the presence of Libyan troops in Chad,” Crocker stated. The administration announced huge increases in military assistance to Qaddafi’s neighbors in Africa and the Middle East: Egypt received $900 million in aid; Sudan, $100 million; Tunisia, $140 million; Morocco, $100 million; Somalia, $95 million; and Oman, $1 billion (for improvements to bases used by U.S. forces).60
Arguably the most important component of Reagan’s Libya strategy was economic sanctions, since they could have the most immediate and profound impact on the Qaddafi regime. Nevertheless, concerns about the U.S. oil industry, about American citizens in Libya, and about the degree of allied cooperation greatly influenced the development of a package of economic sanctions against Libya. In early 1981 Libya was the third largest supplier of oil to the United States, with Libyan oil making up 10 percent of the total U.S. supply. As long as the United States purchased $7 billion of Libyan oil each year and upwards of two thousand American workers and their families provided Qaddafi with a ready pool of potential hostages, the administration was hampered in its ability to construct a tough, comprehensive strategy toward Libya. The United States continued to buy oil from Qaddafi because Libyan light crude was especially attractive on the American market. Its low sulfur content was well suited for producing gasoline with fewer pollutants. Most refineries along the East Coast of the United States specialized in processing Libyan light crude, which meant that an embargo on Libyan oil could cause an economic slowdown in that region of the country. Even if the United States did ban Libyan oil, the Libyan economy probably would not suffer because new customers in Europe would make up the difference.
Before it could implement a stringent economic policy toward Libya the Reagan administration had to make several tough decisions. It would have to cut off the importation of Libyan oil, shouldering the economic consequences of that action, and it would have to order all Americans out of Libya. At the same time the United States would seek the cooperation of its European allies. With their support the sanctions would have had a greater chance of success. The Europeans, however, were not ready to take drastic economic steps against Libya. They were more concerned with protecting their economic interests in Libya than with confronting Qaddafi over the issue of terrorism. A number of European countries, particularly Italy, France, and Germany, were dependent on Libyan oil, and several European companies benefited greatly from Libya’s multibillion dollar development programs. The Europeans argued that until American rhetoric toward Qaddafi was matched by concrete actions, they would be unwilling to risk their economic relationship with Libya for what they considered a symbolic expression of disapproval of Libya’s involvement in international terrorism. Furthermore, several European governments had their doubts about the effectiveness of economic sanctions, citing the failure of past British sanctions against Rhodesia and U.S.-led sanctions against the Soviet Union, Poland, Iran, and Nicaragua. Ultimately the decision to ban Libyan oil was not made for another year and only then when it was prompted by a series of extraordinary events: a dogfight between U.S. and Libyan aircraft over the Gulf of Sidra, the murder of Anwar as-Sadat by Muslim extremists, and reports of a Libyan plot to assassinate Reagan.
Fundamental policy decisions regarding the Libya strategy were made by political appointees and approved by Reagan. In the ensuing policy discussions several career diplomats, intelligence officers, and Pentagon officials objected to many of the steps advocated by the appointees. Briefly stated, the political appointees were more hard-line in their approach toward Libya and in their desire to take assertive, immediate, and, if necessary, unilateral actions to contain and embarrass Qaddafi and undermine his authority in the country. At a minimum they wanted to respond publicly to his support for terrorism and his efforts to destabilize friendly governments in the Middle East and Africa. On the other hand, the career bureaucrats believed that Qaddafi was not as big a threat as the administration was portraying him. They worried that confronting Qaddafi in public might turn him into an Arab hero standing up to the United States. The careerists also emphasized that the Europeans did not regard Qaddafi as an international outlaw and that a poorly crafted Libya policy might undermine America’s fragile standing among moderate Arab leaders. They argued that the best way to handle Qaddafi was to ignore him, that is, not give him attention for his actions.
In the long run the careerists won most of the battles over the details of the Libya strategy. The individual components of the strategy were designed to produce a noticeable effect on Libya, but they were limited in scope. Each component was meant
