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Lost in the "Universe of Waivers"
The State Department Fights the Treasury Department to get the Banco Delta Asia Deal Unstuck
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The Washington Post reports that Wachovia Bank is willing to handle the North Korean funds at Banco Delta Asia…

…if it gets the necessary blessing from its regulators a.k.a. the Treasury Department.

Wachovia, by the way, is on the long list of US banks (two; the other was HSBC, according to the Financial Times) that handled transactions for BDA prior to September 2005.

It didn’t take two months to find that bank, which seems to indicate that the State Department has entered into the realm of desperate, last-second improvisation in trying to get the money moving.

Then, according to Yonhap, we get this :

The U.S. Treasury deferred all questions to the State Department.”That request was initiated by the State Department, so you need to speak with them,” Treasury’s spokeswoman, Molly Millerwise, told Yonhap through e-mail.


The Washington Post story puts the State–Treasury conflict (something we’ve been blogging on since March—see Treasury’s Not So Secret War Against the Six Party Agreement ) on the front burner again.

U.S. government officials first disclosed the request made to Wachovia. Treasury officials declined to comment, but sources said that many officials are dismayed that the administration is now asking a major U.S. bank to work around an order issued two months ago. Some White House officials have also objected to using a U.S. bank, but Secretary of State Condoleezza Rice supports the possible deal with Wachovia.

Maybe the media will turn its attention to what Treasury’s Daniel Glaser really did on his trip to Macau after the BDA rule was announced on March 14 (a seemingly gratuitous visit during which he presented further “evidence” from Treasury dossiers on a case that was already closed, but might have been a foray to intimidate the government of Macau into more enthusiastic cooperation)…

…and why Glaser spent ten days in Beijing in end-March/early April working on “implementation” of the BDA agreement but apparently accomplished nothing.

First time, by the way, I’ve seen a report that “White House officials” and not just Treasury Department types are opposing the BDA deal.

I’d guess you’d have to say the only “White House official” who has the juice on Asian matters to oppose Condoleezza Rice—President Bush’s favorite apparatchik—and blithely shrug off the humiliating two month farce this has become for US diplomacy is probably Vice President Cheney.

That kind of backup would explain the Chinese-style passive-aggressive stalling that Treasury is bringing to bear on the issue.

The Treasury Department has not been involved in the effort to find a financial institution to handle the money, leaving the search to the State Department. But Treasury would need to grant significant waivers, such as special permission for a U.S. bank to deal with Banco Delta Asia. One senior U.S. official said that it is not clear “what universe of waivers” would be needed to ease the bank’s concerns that it would not be putting its reputation at risk.

Ah, the “universe of waivers”.

How could we conceivably get around a rule—a rule, by the way, not a law—that can be unilaterally revised or even discarded by the Treasury Department according to its own secret and arbitrary criteria?

What in the “universe” could we do?


How about:

“The Treasury rule against Banco Delta Asia will go into effect on June 1, 2007”.

Because if the ruling is about the bank—as it’s supposed to be—and not about the money—which we’ve already agreed to give to North Korea—that should give enough time to get the money out electronically and solve the problem before the doors swing shut on BDA.

I think that should take care of it.

Creative readers are welcome to suggest improvements in the comments.

(Republished from China Matters by permission of author or representative)
• Category: Foreign Policy • Tags: BDA, Daniel Glaser, North Korea, Treasury 
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  1. David says: • Website

    So, who is in charge of US foreign policy in Asia Pacific..President Bush/State Dept or UST?

    At what stage will the US realise that they are being made to look like utter “fools” (insert word of your choice) by this absurd farce?

    More will come out on this sorry tale, and it will not make favourable reading for Bush, Asher, Levey, Cheney or Glaser. That is not an idle comment, but a statement of fact. There are more details and issues yet to be made public.

    The question is, does anyone in the White House actually care any more about anything?

    Iraq is collpasing, Bush’s chum in the World Bank has gone, the Gonzales scandal won’t go away and W is drinking again.

    An imploding presidency is very dangerous for everyone.

  2. China Hand says: • Website

    The conventional narrative would be that Dick Cheney is in charge of our foreign policy…but the truth is, now he’s only in charge of obstructing it. I guess he’s hoping some new outrage by Iran, North Korea, and the dozen or so other regimes whose nuts we’re still assiduously twisting will discredit the realists and allow hardliners to regain pre-eminence. I certainly don’t relish the idea of the Bush administration running out the clock for another year and a half in such a bloody and self-destructive manner.

  3. David says: • Website


    Cheney is now mentally unstable, no idle comment, fact:

    1 He is elderly

    2 His health is failing, 4 or more severe heart attacks and possible strokes

    3 The medication he takes has addled his mind.

    In short, he is senile and demented.

    The policy towards Iran merely serves to push the Iranian people closer to their President.

    They have no love for him, but have a real loathing for outside interference from the US.

    Leave them be, and they will topple the regime in Tehran by themselves.

    Keep pushing them as W is doing, and the US will find itself with a real problem that makes Iraq look like a picnic.

    The world and the US cannot survive a further 18 months of Bush; someone needs to do something about it now.


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