Lost in the "Universe of Waivers"

The State Department Fights the Treasury Department to get the Banco Delta Asia Deal Unstuck

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.

Snap!

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?

Think...think...think.

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.