Hoard of Cash Lets Qaddafi Extend Fight Against Rebels

The current levels would be worth about $30 million to $40 million a day, but export markets are now virtually closed to the country, as international banks refuse to provide letters of credit for oil company shipments, according to Greg Priddy, a global oil analyst with the Eurasia Group in Washington.

“I don’t think they are deriving a lot of income from the export market right now,” Mr. Priddy said. “The international banks don’t want to touch it.” Still, several small Libyan refineries remain open, and Mr. Priddy said they were probably refining oil for the domestic market and fuel for Colonel Qaddafi’s military operations.

With other sources of income drying up, the Libyan leader is heavily dependent on his pile of cash, and apparently spending it to stay in power. He is making cash payments to political supporters in Tripoli to retain their loyalty, while also buying the services of African mercenaries.

The person close to the government estimated that 3,000 to 4,000 mercenaries from Mali, Niger and a rebel group operating in Darfur, Sudan, the Justice and Equality Movement, have been hired by the Libyan government for at least $1,000 a day apiece. United States intelligence officials said they could not confirm those numbers or amount of payments.

Intelligence officials and other experts credit Colonel Qaddafi with becoming very adept at hiding his money, and said it had often been difficult to distinguish between the assets of the Libyan government, including its $70 billion sovereign wealth fund, and the Qaddafi family’s assets.

Mr. Qaddafi’s history of financial dealings indicate that he has “surreptitious accounts and unaccounted sums that are significant enough to give him security even if the world caves in on him,” said David Aufhauser, a top Treasury Department official in President George W. Bush’s administration.

Justice Department documents show that Libya had worked with Swiss banks to launder international banking transactions for years, with “hundreds” of senior Libyan officials allowed to surreptitiously move money.

Tim Niblock, an expert on Libya and professor at the University of Exeter in Britain, said he believed that Colonel Qaddafi had hidden cash as far back as the 1990s. He said that it was part of a larger effort by the Libyan leader to protect his money from both the international community and his domestic foes.

“He’s always aware that he faces problems from outside and within,” Professor Niblock said. “It would be quite foolish for him to not amass money for an eventuality like this.”

— Helene Cooper contributed reporting from Washington, and David Rohde from New York. Barclay Walsh contributed research from Washington.