The most pressing Libyan issue today is not the travel ban, political agreement, or ISIL – it’s corruption, which threatens to bring down the entire country. The scale, institutionalization and legalization of corruption in post-revolution Libya have put the nation on a path with two equally-likely, catastrophic outcomes. Left unchecked, corruption will sink Libya into a failed state. Or, along the other path, corruption may actually stabilize Libya, but as an international crime syndicate.

Mr. Khalid Shekshak, head of the Audit Bureau, Libya’s top financial watchdog agency, described the situation as “well beyond corruption…we have reached the state of complete lack of concern for public funds.”

With politicians, militias, and a new oligarchy all benefiting immensely from billions of dollars in ill-gotten proceeds, war and instability in Libya have become business models. According to the UN 2016 Experts Report on Libya, “Armed groups and criminal networks have further diversified their sources of financing, including through kidnapping and the smuggling of migrants, oil derivatives and subsidized goods, as well as profits from foreign currency exchange schemes.”

Soon after the revolution, politicians, militia groups, and tribal leaders realized that the lack of structure and governance presented a clear road to untold riches. Even those who fought against the revolution were poised to cash in. All they had to do was to change uniforms and enlist in one of the many militia groups and pretend that they were revolutionaries. A simple wardrobe change was all it took.

As it was happening, Libyans watched in amusement and made jokes about these silly and opportunistic fighters. But political leaders went another direction, offering to pay every one of these militia members a very handsome salary in exchange for their loyalties. Opportunities for wealth induced more political groups to coalesce and more militia groups to organize. Battalions with a few hundred men that were formed to fight Qaddafi during the revolution swelled to thousands in a matter of weeks after the conclusion of the war.

With this process, individual enrichment eventually grew into organized cartels as networks of politicians, militia and tribal leaders, and even some foreign companies, began to closely coordinate their illicit activities. Like any growing business, the armed groups and criminal networks also diversified their sources of financing from smuggling and foreign currency exchange schemes to payroll schemes and legal manipulations.

The corruptive rot was not limited to fighters and crime bosses. From the early days of the revolution, members of the National Transitional Council that was formed to lead the Libyan revolution made individual alliances with the Gulf States. As the head of the NTC admitted on public TV, those governments were in the habit of making a generous gift of a suitcase of cash whenever one of these political leaders would visit. Most accepted these gifts and never reported them. As a result, the NTC, foreign agents and the various militia groups came to a convenient understanding of institutionalizing corruption.

The links between military and political corruption are widespread. Militia General Khalifa Haftar’s civilian sons received senior or military rankings, responsibility for military procurement and to allocate resources without oversight. According to the former spokesman for Haftar, large sums of money were deposited in the personal bank accounts of Haftar’s sons in neighboring countries. Another example is Osama Al-Juwaili. After he assumed office, funds were diverted to the Qaqa and Sawaiq militia groups in his hometown of Zintan.

It did not take long for these armed, politician-supported, groups to realize that ransoming people was profitable but ransoming the government was more so. And armed groups and warlords who occupied oil and gas facilities began to cut off the only source of income to the Libyan government. Further cementing the corrupt relationship between the political class and the criminal one, these same armed militia group and warlord leaders were put on official payrolls even after they released their natural resource hostages. An annuity, you might say, paid by the government, in perpetuity. Or perhaps just extortion money to keep them from cutting off the oil and gas again.

Mr. Khalid Shekshak, of the watchdog group, described this situation as “the apex of corruption for the government to pay the salaries of the same armed groups that are shutting down the public oil and gas fields. This is a total moral and financial failure.” The United Nations corroborated this finding in its Experts Report, publishing, “government salaries are continuing to be paid to enlisted combatants, regardless of their current unit or human rights record.”

The Libyan government isn’t just paying its own extortionists. The ranks of the Libyan diplomatic corps have more than tripled in the years after the revolution according to the Audit Bureau. Individuals are assigned to diplomatic missions who are unable to communicate in any foreign language and hold no special experience or degree. The positions are created and filled as payback to supporters of politicians and members of parliament. Ambassadors and other diplomatic corps members have become multi-millionaires overnight through many of these very suspicious, likely completely unnecessary, appointments. The money in the Libyan Foreign Service is so good that the new Minister of Health in the UN-sponsored Government of National Accord just appointed his close relative as the Health attaché to a Libyan embassy in Europe! Now he gets to appropriate funds and then spends them.

The Audit Bureau also reported in 2014 that a massive hiring fraud is being committed by almost every government ministry. Some agencies, the Ministry of Justice, for example, were shown to have more phantom employees than real ones. According to that report, 63% of those on the Ministry of Justice payroll and 51% of those paid by the Ministry of Homeland Security simply do not exist.

Smuggling and human trafficking are also widespread and involve a well-coordinated network of smugglers, warlords, and politicians—operating from deep within sub-Saharan Africa to Libya’s coast. The transportation cost to Europe ranges from a few thousand dollars per refugee to, according to some claims, up to $100,000 for a well-to-do refugee family. In 2016, the International Organization for Migration (IOM) estimated that 363,348 migrants and refugees tried to cross the Mediterranean from North Africa to Europe. The authors have confirmed with the IOM office that the vast majority of these migrants and refugees are crossing through Libya, taking advantage of the lack of security. The value of human smuggling may be as high as $346 million. And with no police, and politicians in league, Libya’s armed units have deployed their expertise in smuggling people to route fuel out of the country as well.

The Libyan Attorney General reported that almost four billion dollars worth of gasoline and other subsidized goods are smuggled annually. A gallon of Libyan gasoline is about eight cents. Just across the sea, in Malta, that same gallon can fetch six dollars – a 7,500% profit. And the smugglers didn’t pay the eight cents for it in the first place.

According to a report published by the Presidential Council and the United Nations “The ships smuggling fuel sail south from Malta to between 40 and 60 nautical miles off the Libyan coast, where they turn off the Automated Identification System. After they are loaded, they return to Malta. The vessels remain adrift at least 12 nautical miles off the coast, outside Maltese territorial waters, while they discharge the fuel on to other vessels that carry it to the coast.” Other European countries are benefiting from the smuggling of subsidized fuel too. Two Italians were arrested as part of a large fuel smuggling ring. A UN report claimed that the two were attempting to provide fuel to the Italian Navy.

As criminals do, some of the smuggling warlords have tried to paint their enterprises in legitimacy. For example, Mr. Fahmi Slim, a well-known smuggler and militia leader who spent 15 years in prison before the revolution, is now a shareholder in ADJ Trading Limited based in Malta. He also chairs the board of directors of a Libyan company, Tiuboda Oil and Gas Services Limited. In some particular lines of work, a Maltese shipping company and Libyan oil company make pretty convenient business interests.

Fuel smuggling is so bad in Libya that locals report regular shortages of seafood, despite the country’s nearly 1,100 miles of coastline on the Mediterranean Sea. There’s a shortage because many Libyan fishing vessels have been transformed into fuel carriers.

It’s probably no surprise that Libyan banks have also fallen into the hands of armed groups and their political allies and become another highly profitable criminal enterprise. The huge disparity in hard currency exchange rates between the official rate at banks and those on the black market, allows politicians and bank managers who can obtain dollars and letters of credits to sell them, pocketing the difference. Those profits, naturally, find their way into the wallets of their favored militia leaders.

In just one example, the UN identified that a well-known Tripoli warlord, Haitham al-Tajuri, arranged a scheme using a $20 million letter of credit from the Libyan Central Bank – purchased at the official rate of fifteen million Libyan Dinars and easily sold on the black market for $80 million Libyan Dinars. According to knowledgeable sources in Tripoli, his business empire, which now includes healthcare and medical services, is one of the largest in Libya.

Unfortunately, the corruption and crime is not limited to people robbing the government of money and resources. The government itself is stealing.

In the areas under the control of the HoR government in eastern Libya, the HoR created its own separate central bank. This central bank then borrowed millions of dollars from regional banks. Regional banks that refused to cooperate were threatened by the militia – paid, as you expect by now, by the politicians.

This borrowing drained the local banks of hard currency, triggering or exacerbating Libya’s ongoing liquidity problem. Making a bad situation worse, the HoR central bank agreed to print three billion dollars’ worth of unauthorized, unbacked Libyan Dinars. Liquidity issues and devalued currency ignited hyperinflation and made even poor Libyans even more poorer overnight.

So what happened to that money? Most of it went to fund General Hifter’s militia groups as well as interest free loans, transportation and living allowances, and free medical treatment trips for members of the Libyan House of Representatives and their extended families.

Libya’s “founding fathers” have not been immune. The Constitution Drafting Assembly (CDA) has been plagued by corruption and illegal activity. According to one member of the CDA who asked to remain anonymous, embezzlement and theft were wide spread within the CDA from the first days of its inception. This member provided the authors with documentation showing the alleged embezzlement by the Chief of Staff of the CDA of almost six million Libyan dinars. The Chief of Staff moved to Tunisia where he can enjoy spending his money not far away from the UN office that co-sponsors the CDA.

Yet another, almost genius way the government is stealing is by teaming up with foreign companies that have outstanding legal disputes with the former Libyan governments and rushing expensive, unprecedented cash settlements for a cut of the payment.

The Libyan Audit Bureau reported in 2015 that “billions of dollars” of public funds were at risk in these disputes, some of which are decades old. But seeing an opportunity, Libyan ministers are reaching out to foreign interests with disputed legal cases and negotiating an outlandish settlement well in excess of the disputed amount with a clause to reduce the payment if the settlement amount is paid immediately – creating urgency and a desire to ‘save’ money.

In just one example, a dispute with a French company, Sorileek, that began in 1979 was negotiated to a €37 million settlement in 2003. But that settlement was not concluded in 2003 and, just last year, somewhat spontaneously, the Minister of Justice in Tobruk signed a settlement with the company for €452 million. The new, costlier agreement also stipulated that the amount would be reduced to ‘just’ €230 million – more than six times the original amount – if it was paid within 45 days.

Contrary to common wisdom, tackling corruption from within Libya is not effective or possible: the lack of a national government, the militias and politicians’ involvement in corrupt activities, and the lack of general transparency, make tackling the problem from within Libya impossible.

Rather, a multi-pronged approach can reduce incentives for smuggling and other types of corrupt practices. European and Gulf institutions should implement effective laws to prevent corrupt Libyan officials from finding partners in Europe and the Gulf to reduce the demand for smuggled goods. Anti-corruption rules and regulations in the European Union must be made more robust with severe penalties for companies and individuals that participate in any form of corruption. Organizations such as Trace International, that rate and certify companies as corruption free, need more resources and recognition to play a major role in preventing international corporations from engaging in fraud and bribery. Contrary to the recommendations of the February 3rd Malta conference, smuggling refugees and migrants can best be stopped at the southern borders of Libya, not at the southern shores of the Mediterranean. Countries south of Libya are relatively more stable, and will be better able to utilize training and resources to stop migrants before they reach Libya. Actions working within Libya will, until the country is more stable, have to be limited. Possibilities include removing fuel subsidies so that the profit margin on fuel sales to Europe is not high. The Government of National Accord should be pressured to pay salaries to government employees with a valid national ID number.

No matter how much Libyans want, deserve or have earned their economic stability and liberties, the wealth-creating corruption trades will continue to make that impossible. As is always the case when corruption blooms, peace, security, rule of law, and democracy are simply not in the interests of those who are wining with war, instability and oligarchy. And those are the people who run Libya today. And those are the people Americans, including the new President, should keep an eye on.