I have in my hand a list of names...

Nothing like a good conspiracy theory to liven up a dusty diplomatic and banking dispute.

Via Onefreekorea , the March 19 Washington Times informs us that Congressman Ed Royce (whose positions closely follow those of the hardline crowd on North Korea) wrote a letter to Condoleezza Rice accusing the State Department of trying to “unravel” the Treasury sanctions against North Korea by approaching Wachovia Bank to handle the BDA money:

By asking Wachovia to deposit the money in an effort to clear the way for the closure of the North's main nuclear reactor, the State Department is trying to "unravel" the Treasury Department's decision to ban U.S. banks from dealing with Macao's Banco Delta Asia, wrote Mr. Royce, who is a member of the House Financial Services and Foreign Affairs Committees.

This supports my take on the underlying dynamic: that the State Department took the initiative in approaching Wachovia and announced the deal in order to put Treasury in the difficult position of either giving a thumb’s up—or refusing to cooperate and thereby openly admitting that Treasury recalcitrance (and not North Korean scheming or finicky attitudes of international bankers) is holding up the remittance.

Royce’s letter and Bolton’s op-ed both seem to be weak efforts to divert the focus from Treasury obstruction to alleged State Department perfidy.

Onefreekorea tries to connect the dots on Royce and Bolton’s behalf by accusing Christopher Hill of criminal conspiracy to engage in moneylaundering.

So here’s something I though I’d never see: U.S. government officials more-or-less openly engaging in a conspiracy that would land anyone else in a federal prison for international money laundering.

The underlying rationale is that US law is preventing the release of the BDA funds, and, by actively seeking to involve an intermediary bank to handle the money, Hill is seeking to evade those laws.

Big problem with this argument is that, although the Treasury Department asserted that some of the funds were illicit, it didn’t prove it—which is why BDA was stigmatized as “a bank of money laundering concern” and not “a money laundering bank”.

The only action taken against those funds was a request to the Macau Monetary Authority to freeze them.

Considering the fact that Macau has not seen fit to initiate any criminal proceedings with respect to BDA and there is no apparent legal basis for characterizing the funds as illicit, Onefreekorea’s effort at intimidation of Christopher Hill looks rather ineffectual as well as ignoble.

So, count the criminal money laundering charge against Christopher Hill as another example of misleading rhetorical chaff thrown by the hardliners in an attempt (I know I’m mixing metaphors here) to muddy the waters and whip up a firestorm of allegations against the State Department in order to derail the Six Party Agreement.

I see this a last ditch effort to assert that the Six Party Agreement is not only flawed, but also tainted by improper State Department activity, so it should be ditched in favor of that one shining beacon of consistency and legality, the Patriot Act sanctions against BDA.

However, I think that a narrative requiring war on enemies in the State Department as well as North Korea will be too much for anybody beyond the hard core of the hardliners to swallow.

Also, since President Bush has endorsed the deal, pushing this line would also require a Hirohito defense for the Commander in Chief—that he was a dupe of evil forces exploiting his ignorance and gullibility to promote their sinister designs.

That’s just too much political baggage for one lousy agreement with North Korea to bear.

So I think the hardliners will be placed in an uncomfortable position in which burden of proof is on the Treasury Department to demonstrate that its resistance—and not the State Department’s persistence—is justified.

That is, of course, if anyone pays attention—which nobody seems to be doing. There’s been no sign of that Wachovia trial balloon reappearing this week.

Maybe the whole matter will finally be resolved by Treasury Secretary Paulson in the context of the give and take between the US and China at the Strategic Economic Dialogue.

If so, we might have to wait a few more weeks.