It is critical to bear in mind that for the preceding decade and more, Qadhafi had consistently denied that he was engaged in WMD programs, denying also any links with Islamist terrorists or terrorists of any kind. This lie was accepted by the international policy community, and yet when Qadhafi admitted what GIS had long said was the case — that such Libyan WMD programs did, in fact, exist8 — he was greeted as a reformer by the UK Government of Prime Minister Tony Blair, and also by some US politicians. Equally significant is the fact that Qadhafi had ensured that, through the Lockerbie settlement, significant funds (up to $900-million) were to go to Washington and New York law firms, providing a pressure point on Washington policymakers of almost unprecedented levels. For many politicians, there was more to be gained by carefully assisting Qadhafi than in exposing him.
The current refusal to acknowledge the regional linkages which tie the Saddam Administration in closely with the actions of Iran, Syria, Libya, Egypt and the Palestinian and other subsidiary subnational or transnational groups (including al-Qaida) is, to a large extent, governed in the US by the fact that there is strong pressure, not least from the US State Dept. and Secretary of State Colin Powell, not to “widen the war” in the face of international and domestic pressures. However, this position significantly hurts the incumbent US Bush Administration, which took a major political gamble by taking the war to Iraq based on an “intuitive” understanding of the threat which Saddam Hussein posed to regional and Western interests.
For many career intelligence and diplomatic officials, acknowledgement of the Iraq-Libya-Egypt-Iran-DPRK linkages (but particularly Iraq-Libya), at this stage, would be embarrassing. These officials have chosen the approach that, if all goes well, the Libya “problem” will now go away, albeit leaving a considerable gap in the public knowledge which could be politically beneficial to the re-election of US Pres. George W. Bush..
Source; Iraqi WMD Debate and Intelligence: the Links to Libya