By Rachelle Younglai and Susan Cornwell
WASHINGTON (Reuters) - The United States on Tuesday tightened financial sanctions on the Libyan government and two influential senators pushed back against calls to halt funding for American involvement in NATO operations there.
Senators John Kerry and John McCain introduced a measure to formally authorize the U.S. military intervention in Libya for up to one year, and warned against critics who want Congress to act to stop U.S. involvement.
A Senate vote would send a message that Washington was committed to the conflict and would not abandon allies who were leading it, Kerry said. Pulling the plug would "doom the Libyan operation" and "undermine the very core of NATO," he warned.
The U.S. Treasury said it was blacklisting nine companies for being owned or controlled by Muammar Gaddafi's government.
The sanctions will prohibit U.S. transactions with the nine companies, including the Arab Turkish Bank, Tunisia-based North Africa International Bank and Lebanon-based North Africa Commercial Bank, the department said.
The Treasury also removed sanctions against former oil minister Shukri Mohammed Ghanem because he defected from Gaddafi's government in May.
Earlier this year, the United States lifted sanctions against former Libyan foreign minister Moussa Koussa, who fled to Britain on March 30, in an attempt to persuade other officials in Gaddafi's government to defect.
"To the extent that sanctioned individuals distance themselves from the Gaddafi regime, these measures can be lifted," Adam Szubin, the director of Treasury's Office of Foreign Assets Control, said in a statement.
Other companies targeted in this new round of sanctions included subsidiaries of the Libyan Investment Authority, which was established in 2006 to manage the country's oil revenue.
SNATCH DEFEAT FROM JAWS OF VICTORY
Kerry and McCain were responding to criticism from some lawmakers in both parties that U.S. involvement in the NATO attacks, mainly confined to logistical support and intelligence, is illegal because it has not been endorsed by a vote in Congress.
NATO is leading the United Nations-sanctioned mission to protect Libyan civilians from Gaddafi's forces. It has become a predominantly air campaign whose unstated goal appears to be to drive the Libyan leader from power.
Kerry, a Democrat, and McCain, a Republican, argued against efforts in the House of Representatives to cut off funds for U.S. engagement. This would "snatch defeat from the jaws of victory," Kerry said on the Senate floor.
McCain was the Republican nominee for president in 2008.
In the House, anti-war Democrat Dennis Kucinich plans to propose an amendment halting funds for the Libyan war when a defense spending bill comes to the floor later this week.
Some liberal Democrats and conservative Republicans are expected to support such a measure, but it was unclear whether it could pass the House.
Kerry, who is close to the administration of President Barack Obama, said he agreed with the administration that the U.S. intervention in Libya was too limited to require congressional authorization.
House Speaker John Boehner, a Republican, has harshly criticized Obama's handling of Libya, and scoffs at Obama's argument that the operations do not amount to "hostilities." But Boehner has not explicitly endorsed cutting off funds.
(Editing by David Storey)