Why Libya Wants In

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During his visit to South Africa in March 1998, Bill Clinton was enjoying a scheduled lunch with Nelson Mandela when an unscheduled visitor was suddenly invited in. It was none other than Prince Bandar bin Sultan, Saudi Arabia's maverick ambassador to Washington. The prince gets around--Clinton had asked him over for a movie and popcorn at the White House--but here he seemed far afield. Yet as a bemused U.S. President sat and listened, Bandar suddenly began to press him on an unwelcome and delicate topic: Libya. Then Mandela joined in.

The point of this tag-team effort? To persuade Clinton to support an easing of U.N. sanctions on Libya imposed after the destruction of Pan Am Flight 103 over Lockerbie, Scotland, a decade earlier. That, in turn, would be a first step toward allowing American companies back into a country that the U.S. officially labels a terrorist nation. Caught off guard by the unscripted arm twisting, the President offered no reply. But the forceful appeal appalled several staff members, notably National Security Adviser Sandy Berger.

The episode offers an inside glimpse of the enormous sensitivity that still surrounds the murder of 270 people in the Pan Am bombing. A reckoning of sorts now looms: on May 3 the two Libyans charged with blowing up the aircraft will stand trial in the Netherlands. Once that trial concludes, the long ban on U.S. commercial activity with Libya could be lifted. Says Ronald Neumann, the top State Department official in charge of Middle East affairs: "Change can now be imagined." Indeed, a quiet but intense lobbying campaign for detente has been launched by U.S. businessmen with ties to both the current Administration and that of former President George Bush.

Chalk it up to Colonel Muammar Gaddafi's charm offensive. The Libyan leader has not only agreed to cooperate with the Pan Am trial; he has also signaled through official and unofficial channels that he is ready to do business with Washington. For starters, he has booted a number of radicals out of his country, including the infamous Abu Nidal. It may come as a surprise to those who remember the '80s--when Libya was implicated in the bombing of a discotheque in Germany that killed two American servicemen--to hear a senior U.S. official say, "At this moment, [Gaddafi is] out of the terrorism business."

Corporations are always quicker to forgive than countries. And Gaddafi has thrown out a welcome mat for hundreds of executives from Britain, France, Italy, Russia, China and Canada. Lured by the country's nearly $12 billion in annual oil revenue, they've flocked to Tripoli's few good hotels looking for deals--big ones. One of many companies on the ground is Airbus, the European aircraft consortium, which is primed to sell 24 passenger jets worth at least $1.5 billion to Libya's national carrier. That kind of uncontested sale does not sit well in Seattle, where Boeing is based.