- The Washington Times - Friday, February 20, 2009

A just-retired U.S. diplomat who led negotiations that restored full diplomatic ties between the U.S. and Libya has taken an important job with Bechtel, a major U.S. company that stands to win major contracts in the former pariah state.

The firm approached David Welch in his final months as assistant secretary of state for Near East affairs and in December made him vice president for Europe, Africa, the Middle East and Southwest Asia, said a Bechtel spokesman, Francis Canavan.

Mr. Welch did nothing illegal by taking the job, but his new duties illustrate the revolving door that leads so many former U.S. government officials to lucrative posts in the private sector using contacts they developed while on the federal payroll.

Mr. Welch declined to comment about his new duties and referred questions to Mr. Canavan.

Mr. Canavan said Mr. Welch, who is a former U.S. ambassador to Egypt, would be working on all Bechtel matters in Europe, Africa, the Middle East and Southwest Asia. “Libya is part of this territory,” he said.

Although Mr. Canavan would not discuss specifics, he said, “This is a part of the world in which we’ve operated for decades, and very successfully.”

Bechtel owns 40 percent of the Power Generation Engineering and Services Co., a joint venture with the Egyptian Ministry of Electricity that has a contract to build and design power plants in and around Tripoli, the Libyan capital.

Gal Luft, director of the Institute for the Analysis of Global Security, a Washington think tank, said Libya, which was under U.S. sanctions for more than two decades, is an “underinvested market” that would be attractive to Bechtel.

“First, there is liquefied natural gas. It is something that Bechtel has a core competence in, and is very important to European energy security because the Europeans are trying to get off of Russian gas, so they are looking to North Africa,” he said.

“Then there are refineries. Libya has light sweet crude … the most desired crude. It is one of the few places left that has this. Bechtel is in a position to compete on bids to upgrade refineries in Libya,” he said.

All told, the Libyan market potentially represents a “couple of billion dollars” for an energy and engineering company such as Bechtel, Mr. Luft estimated. He said Mr. Welch would be an asset in seeking Libyan contracts. “Of course he is an advantage,” Mr. Luft said. “He knows the culture; he knows the government.”

Mr. Welch drew up much of the fine print that binds U.S.-Libya relations today. He took part in negotiations that restored full U.S. diplomatic relations with Libya in 2006, after Libya’s renunciation of nuclear weapons and payment of compensation to relatives of those who died on Pan Am Flight 103 - brought down by a bomb in 1988 over Scotland.

In August, Mr. Welch helped negotiate a fund for Libyan victims of 1986 U.S. air strikes on Tripoli and Benghazi. The strikes were retaliation for Libya´s role in bombing a German nightclub frequented by American servicemen.

No law or regulation prohibits former diplomats from taking jobs in which they seek to influence foreign governments. Indeed, by joining Bechtel, Mr. Welch trod a familiar path for senior U.S. officials, who often are recruited by U.S.-based multinational firms seeking contracts abroad.

Bechtel was once headed by George P. Shultz, a former Treasury secretary who became President Reagan’s secretary of state. Former career diplomats such as Thomas Pickering, an undersecretary of state for political affairs in the Clinton administration, have worked for or now work for Boeing Co.

Bill Buzenberg, executive director for the Center for Public Integrity, said Mr. Welch’s new position was “definitely exhibit A of how the revolving door benefits these corporate interests.”

He added that the new role “does not quite pass the smell test. … You’d like to think this was not laid out in advance, that he was doing Bechtel’s bidding as he was negotiating for the U.S. in normalizing relations with Libya.”

Mr. Canavan adamantly rejected Mr. Buzenberg’s remarks.

“That is not only offensive to David Welch, it is offensive to anyone who has served in the U.S. government,” he said.

Former U.S. diplomats who have served with Mr. Welch also defended his integrity.

“I’ve known David Welch for a long time,” said David Newton, a senior Arabist - as is Mr. Welch - and an ambassador to Iraq from 1984 to 1988. “He is a careful diplomat.” He added, however, that “Bechtel would be strongly in the running for revitalizing Libya’s energy sector.”

Another former ambassador, David Mack, said it was wrong to assume that Mr. Welch did his diplomacy with Libya with an eye toward a job at Bechtel after retirement.

The two biggest issues in Mr. Welch’s area - Iraq and the Arab-Israeli conflict - were largely taken out of his portfolio, Mr. Mack said. “Lebanon and Libya were two things he spent a lot of time on, not because they were the highest priority for the U.S. government, but because he was looking for something where he could make a mark … and advance U.S. national interest.”

Edward Gnehm, a former director general of the foreign service, said that current regulations restrict retired U.S. diplomats from lobbying the U.S. government on behalf of certain companies. For example, he said, “If I were ambassador in Jordan and during that time the administration sold a particular piece of hardware to the Jordanians, if I then went and worked for the company that produced that item, I would never be able to go back to the [U.S.] government and lobby on that type of item.”

Mr. Gnehm added that there are no such restrictions on lobbying foreign governments in a similar way.

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