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Archive for U.S. Law
If you can stomach some appropriations law this evening, there are a few items in this year’s Appropriations Bill that should be of interest to the OFK readership. As of this hour, both the House and the Senate have passed the bill, and the President is expected to sign it on Saturday.
Those of us who were early (and naive) enthusiasts for the North Korean Human Rights Act of 2004 have grown gray and cynical over the last decade, as we watched the State Department repeal it by disinterpretation. Few executive branch officials would disregard Congress’s limits on appropriations so casually. To do so would violate the Anti-Deficiency Act, which in extreme cases, carries criminal penalties. Even unintentional violations require onerous reporting to OMB and Congress, and can cost senior officials their jobs.
Congress’s most important authority over federal executive agencies is the power of the purse. By limiting or restricting appropriations, Congress can force federal agencies to bend to its will. That’s why appropriations and authorization acts are such important tools of congressional oversight. There are some provisions in this year’s appropriations bill that show us hints that the House in particular is growing more assertive on North Korea policy.
Several of the provisions in this year’s Act are limits designed to prevent tax dollars from falling into Kim Jong Un’s hands. Provisions like these are common in appropriations bills, although most of them weren’t in State’s Fiscal Year 2013 appropriation.
SEC. 8042. None of the funds appropriated or other wise made available in this Act may be obligated or expended for assistance to the Democratic People’s Republic of Korea unless specifically appropriated for that purpose. [Page 273]
The Fiscal Year 2013 Appropriations Act contains similar language. Everything else you’re about to see wasn’t in last year’s appropriation. For example:
SEC. 7007. None of the funds appropriated or otherwise made available pursuant to titles III through VI of this Act shall be obligated or expended to finance directly any assistance or reparations for the governments of Cuba, North Korea, Iran, or Syria: Provided, That for purposes of this section, the prohibition on obligations or expenditures shall include direct loans, credits, insurance and guarantees of the Export-Import Bank or its agents. [Page 1203]
The titles referred to are within Division K of the Act, the State Department’s annual appropriation. Title II is called “United States Agency for International Development, Title III is “Bilateral Economic Assistance,” Title IV is “International Security assistance,” Title V is “Multilateral Assistance,” and Title VI is “Export and Investment Assistance.”
If you dig into the specific provisions of those titles, however, you’ll see only the most general correlation between the actual provisions and what the titles lead you to expect there. That means if you want to know how a specific provision affects a specific program, you have to know what appropriation the program is funded from.
SEC. 7032(i) Funds appropriated by this Act under the heading ‘‘Democracy Fund’’ that are made available to DRL shall be made available to establish and maintain a database of prisons and gulags in North Korea, including a list of political prisoners, and such database shall be regularly updated and made publicly available on the Internet, as appropriate. [Page 1252]
You will see a similar provision in H.R. 1771, the North Korea Sanctions Enforcement Act.
Congress is increasing funds for broadcasting to North Korea, which is also provided for in H.R. 1771. For years, the Broadcasting Board of Governors has suffered from a severe lack of funding. For years, Congressman Ed Royce made it a personal priority to fix that. With respect to North Korea, the drought is about to break. This is a much-needed boost for broadcasting as we learn that the BBC (this time, I mean the British one) will not fund broadcasts to North Korea.
SEC. 7043(d) NORTH KOREA.—
(1) Of the funds made available under the heading ‘‘International Broadcasting Operations’’ in title I of this Act, not less than $8,938,000 shall made available for broadcasts into North Korea.
(2) Funds appropriated by this Act under the heading ‘‘Migration and Refugee Assistance’’ shall be made available for assistance for refugees from North Korea, including for protection activities in the People’s Republic of China.
(3) None of the funds made available by this Act under the heading ‘‘Economic Support Fund’’ may be made available for assistance for the government of North Korea. [Page 1312]
The broadcasting appropriation is significant. The amount appropriated is infinitesimal in terms of the federal budget as a whole, but generous with regard to the Board’s needs. The migration assistance could remove an excuse for China to shun refugees who cross the border, but don’t count on it persuading China’s policy to change. It’s unlikely to be used unless there’s some severe crisis in North Korea.
The last provision I’ll mention is one that doesn’t mention North Korea by name, but could affect assistance to it.
(a) LETHAL MILITARY EQUIPMENT EXPORTS.—
(1) None of the funds appropriated or otherwise made available by titles III through VI of this Act may be available to any foreign government which provides lethal military equipment to a country the government of which the Secretary of State has determined supports international terrorism for purposes of section 6(j) of the Export Administration Act of 1979 as continued in effect pursuant to the International Emergency Economic Powers Act: Provided, That the prohibition under this section with respect to a foreign government shall terminate months after that government ceases to provide such military equipment: Provided further, That this section applies with respect to lethal military equipment provided under a contract entered into after October 1, 1997.
Section 7022 contains an “important to the national interest” exception, within the President’s discretion. Section 6(j) of the Export Administration Act is a reference to the list of state sponsors of terrorism. North Korea is not listed, but Iran and Syria — both major arms clients of North Korea — are.
The question then becomes what aid really is being provided to North Korea. Certainly North Korea hasn’t accepted U.S. food aid for years. That was Kim Jong Il’s decision, not President Obama’s. With respect to any miscellaneous aid or exchange programs that are getting taxpayer support, and that are funded under Title III or Title IV appropriations, their funding is done for this year. Of course, Section 8042 arguably terminates all assistance to the North Korean government, although I can imagine how a program could be structured to pay the money to some gullible NGO, which would be an easy mark for the North Koreans.
Ordinarily, appropriations acts aren’t supposed to make positive law. That’s why ad hoc appropriations are a good start, but won’t be a substitute for H.R. 1771. On the other hand, without the backing of an assertive Congress that knows how to use the power of the purse, State will ignore H.R. 1771, too.
Ed Royce’s leadership of the Foreign Affairs Committee is starting to leave its mark on North Korea policy. An important part of that leadership is Royce’s ability to work effectively with tough-minded Democrats like Elliot Engel, Albio Sires, Ted Deutch, and Tulsi Gabbard, as well as with leading Republicans like Chris Smith and Steve Chabot (who leads the Asia Subcommittee).
Update 2, 9/24: So now that I’ve noticed that I was reacting quite strongly to a seven year-old post, recently retweeted by another blogger–but still, sheesh–let me offer my apologies to Mr. Lewis for the tone of my reaction, and my compliments to Robert Gallucci for at least conceding that the old policy didn’t work.
You know, Jeffrey, you ask that question with a boldness that seems to presume the absence of a ready answer. If reading the bill is too much to ask, then I’ll let Congressman Ted Deutch (D, Fla.) give you the Cliff notes version. (He’s one of 125 co-sponsors, and a respected member of the House Foreign Affairs Committee.)
P.S. I can’t speak for others who are also of the hard-line persuasion, but I’m not against talking to the North Koreans. It’s paying them I have a problem with. So now that we’ve framed the question that way, do you or do you not support paying North Korea when almost no one believes they’ll disarm? Because if we can agree that North Korea isn’t going to disarm–and just about everyone does–then I guess talking about paying them is a plan. Now tell me what you have a plan for.
P.P.S. Maybe I can put it this way: our fucking plan for North Korea is actually a plan for fucking North Korea. Or rather, fucking Kim Jong Un, financially speaking.
P.P.P.S. I should be clearer whose plan it really is–and of course, that would be Chairman Ed Royce. Ranking Member Elliot Engel was an original co-sponsor. In the interests of full disclosure, I helped the Committee staff with the drafting and legal advice.
I should also clarify that Jeffrey Lewis is really echoing Robert Gallucci’s question–expletives included–although he does so with apparent approval.
Update: 9/24: Please note the disclaimers here. Anything I write on this blog represents nothing more than my views as a private citizen. I don’t work for the House or any of its Committees or members. I use the possessive “our” above not because I speak for anyone else, but as one of those presumably painted with Gallucci’s broad brush as having no plan because I oppose a continuation of failed “engagement” and “Sunshine” policies.
Although I’ve often disagreed with Gallucci’s policy views, I respect his integrity and the honesty of his appraisals, such as this recent concession:
“The policy we have pursued over the last 20 years — engagement, containment, whatever — has failed to reduce the threat posed by North Korea to the security of the region,” Robert Gallucci said in a keynote speech during a security forum held in downtown Seoul. [Yonhap]
This makes Gallucci’s criticism seem especially strange. What good is a plan that’s no different from the one that, by your own concession, doesn’t work?
At the L.A. Times, John M. Glionna discusses litigation against North Korea and the efforts of the plaintiffs’ attorneys to find, fix, and seize North Korean assets. Here’s a teaser:
“Nobody pays attention unless these nations are held accountable,” said Han Kim, the son of the Chicago minister abducted by North Korea.
Meanwhile, plaintiffs’ lawyers continue their hunt for North Korean assets. “I don’t know whether we’ll ever be successful. That’s the sad part,” said Streeter. He said he charged each of four plaintiffs a $5,000 retainer but will receive no more until a judgment is collected. “But I want to see some of that money that Kim Jong Il is using to buy his yachts and his Courvoisier as payment to my clients,” he said. “I’ll take it in Courvoisier. I don’t care.”
Glionna’s quotes of the lawyers are interesting reading, though legally and substantively, there isn’t much there that you haven’t read right here, at this humble blog. In fact, several weeks ago, after Glionna read the page, he contacted me with a few questions about how the law has evolved in this area. I also put him in touch with Richard Streeter and told him how to find Robert Tolchin (at the bottom of his pleadings, published on my page). It’s all just another day in the life of an pajama-clad blogger rearranging and serving table scraps from the dead tree media.
It bears repeating that these lawyers are trying to collect tort judgments on behalf of American victims of terrorism and torture, something that’s completely consistent with what Congress intended when it amended the Foreign Sovereign Immunities Act after 9/11. Yet their primary opponent hasn’t been North Korea, which failed to offer any defense to the suits, but our own State Department. I can understand the State Department arguing to maintain its prerogative over the conduct of foreign relations before Congress passes a law. What I can’t understand is State continuing to frustrate a statute after it is passed and signed by the President, after it has become the settled law of the land — just as it did with the North Korean Human Rights Act.
I don’t make any secret of the fact that I’m rooting for Streeter, Tolchin, and their clients. It’s fair to suppose that none of the assets they levy will have been earmarked to buy baby formula. Today, the total amount of the U.S. District Court judgments against North Korea is approaching $500 million. By some estimates, that’s the same amount North Korea was earning from its overseas weapons sales every year until recently.
When the survivors of the U.S.S. Pueblo, joined by the widow of their captain, sued North Korea for the horrific torture they endured in 1968, the real question wasn’t whether they were entitled to compensation, it was whether they could ever collect any. North Korea, as it has done with all of the other suits against it in U.S. federal courts, refused to respond to the suit after being duly served at its U.N. mission. Consequently, the court entered a $68 million judgment for the plaintiffs (by contrast, North Korea has been litigious in the British courts).
The Hawaiian Good Luck Sign
I’ve periodically reviewed the public court records regarding each of these cases. My most recent review of the docket of Massie v. Democratic People’s Republic of Korea today indicates that Richard Streeter, who represents the Pueblo plaintiffs, is now poring through a trove of information turned over by the Treasury Department’s Office of Foreign Assets Control, or OFAC, about North Korean assets within American jurisdiction. This information is largely a matter of speculation to those of us whose access is limited to open-source information. Here, OFAC claims that public disclosure would be prohibited by the Trade Secrets Act. But as it has done in similar previous cases, OFAC agreed to share information about blocked North Korean assets with Streeter, subject to a protective order. Here’s some text from OFAC’s unopposed motion for that protective order:
OFAC has agreed to provide plaintiffs with certain information responsive to the subpoena, pursuant to the terms of the attached proposed protective order.1 Without a protective order, the release of this information might violate the Trade Secrets Act (“TSA”), 18 U.S.C. § 1905, which imposes criminal penalties for the disclosure of information falling within its terms without appropriate authorization of law. Thus, while OFAC does not waive any right, privilege, or immunity to which it may be entitled with respect to any further response, it respectfully requests that, in light of the prohibitions of the Trade Secrets Act, the Court authorize its disclosure of information responsive to plaintiffs’ subpoena via the attached proposed protective order.2
OFAC explains why the information must remain protected from public disclosure:
Here, the information OFAC is willing to disclose was provided to it pursuant to 31 C.F.R. § 501.603, which requires financial institutions and other holders of blocked property to file reports with OFAC within ten business days of 4 Case 1:06-cv-00749-HHK Document 16 Filed 10/05/09 Page 4 of 6 the blocking of the property, as well as annually. The requirement is “mandatory,” see id., and “[r]eports filed are regarded as privileged and confidential. Id. subsection (a). In the absence of a protective order, disclosure of information submitted to OFAC under § 501.603 would adversely affect OFAC’s administration of its programs relating to terrorist financing and economic sanctions, which depends in large part on OFAC’s ability to maintain the confidentiality of the information submitted to it.
This implies, but doesn’t necessarily mean, that there are assets within OFAC’s reach to satisfy the judgment. Note also that according to public court records, Streeter filed a writ of garnishment, presumably for something. This does not mean, however, that whatever assets there may be are subject to attachment. In fact, OFAC has carefully reserved its position on whether any blocked assets are subject to attachment under the Foreign Sovereign Immunities Act. One hopes that the government of this country will not frustrate the pursuit of justice by those who suffered so much to defend that same country. With Treasury now revitalizing its own hunt for North Korean assets to block, the various plaintiffs with claims against North Korea may have access to more attachable assets.
While this is an interesting glimpse at Streeter’s strategy, we’ll have to wait and see whether he manages to collect any of Kim Jong Il’s yacht money. Meanwhile, this is one more complication and disincentive for anyone contemplating new business transactions with Kim Jong Il’s regime.
Related: The Calderon-Cardona plaintiffs, who recently won that massive $378 million judgment against North Korea, filed a similar protective order, as agreed with OFAC, just last week. The court has also permitted them to register their judgment in other jurisdictions, noting cryptically that although the protective order prevents them from disclosing where the North Korean assets are, they aren’t within the District of Puerto Rico.
Meanwhile, the family of the Rev. Kim Dong Shik has also won a default against North Korea. Even so, the Foreign Sovereign Immunities Act requires a plaintiff to prove the liability of the defendant to the court’s satisfaction. No hearing date has been set, but it looks like it could happen this month.
So I will assume that Stephen Kim, the Korean-American State Department contractor who is now being prosecuted for leaking top secret / sensitive compartmentalized information was neither employed by, nor sympathetic to, North Korea given his choice of Fox News as a recipient for his leak of information that might have revealed U.S. intelligence sources in North Korea. And having said that, I really don’t care what Kim’s specific views were, I just want to know if any foreign government put him up to this. Regardless of Kim’s views, the administration is right to throw the book at those who illegally leak classified information.
One of the most inviolable rules any civil servant, contractor, or employee must respect is that confidential or classified information must never leave the office. That’s why you’ve never seen me talk about my work, and you seldom even see me allude to it. There are exceptions, recognized by law, for revealing abuse of authority or a violation of law by colleagues, but the appropriate vehicle for those reports is to report that information to the Inspector General, not Fox News or Wikileaks.
I already regret making the comparison to Robert Kim, because I only draw it because of Stephen Kim’s ancestry, which shouldn’t matter. But among South Korea’s favorite methods for exerting its extensive influence over U.S. policy toward the Koreas is to leak reports that favor its policy goals. I emphasize that I have no particular reason to believe that Stephen Kim was working for South Korea, but Kim’s case does illustrate the danger that foreign governments will use leaks to corrupt U.S. government employees for their own purposes (and in case you’re wondering, I hold precisely the same view of Jonathan Pollard, who deserves to die in prison). Ultimately, this legitimizes suspicions of dual loyalties against loyal and honest American citizens who may bring badly needed linguistic and cultural understanding to the federal service. That means that leaks of this kind are toxic for good policymaking, for the civil service, and for society as a whole, and that the Obama Administration gets my full support for this prosecution.
I think it’s safe to say that North Korea is going through something of a legal rough patch. Boycotting talks has worked well for North Korea, but boycotting trials, not so much:
A state-run North Korean bank has lost a lawsuit for not paying back a loan it borrowed from a Taiwanese bank nine years ago, the New York district court said Friday.
The District Court of New York confirmed it ordered the Foreign Trade Bank of Korea to pay compensations of just under US$6.77 million to the Mega International Commercial Bank (MICB) in a ruling made earlier in the week. [Yonhap]
By which they really mean the U.S. District Court for the Southern District of New York. Nit, picked.
The North Korean bank is widely viewed as Pyongyang’s main foreign exchange earner with branch offices in Europe, the Middle East and Hong Kong.
Hallelujah. We’ve finally located an institution capable of holding North Korea to the same standards as other human beings. I wish all of these plaintiffs the best of luck in collecting their winnings. But as the article notes, with all of these judgments piling up — by my count, fast approaching $500 million, or about a year’s worth of counterfeiting/dope peddling/proliferating income — people are going to hesitate to do deals with the regime if they think their funds, instead of going toward their North Korean partners, are likely to get attached by third-country courts to satisfy judgments in America.
The down side of this is utterly lost on me.
Hey, did the State Department threaten the Bank of China and the Bank of Shanghai? Or to put the question more bluntly, did someone just grow a pair?
A diplomatic source here said the U.S. will blacklist more North Korean entities and individuals in the coming weeks so that international financial institutions would cut off ties with them.
Any foreign banks refusing to sever business ties with the North Korean entities and individuals in question will have U.S. financial institutions suspend ties with them, the source said. “Think of Citibank or Bank of America suspending business ties with Bank of China or Bank of Shanghai. That will be a great burden to China.”
What I wouldn’t give to see the case of the vapors Peter Lee must be having at this moment. Of course, I care little and know less about Lee’s background, but I wonder if the manic oscillation between contemptuous arrogance and resentful victimhood is a function of life in a society where destiny is so often imposed on the resentful by the arrogant. If it’s futile or worse for a Chinese citizen to curse the policies of his own government, there’s no less futility in cursing the policies of the American government.
Crowley said last week that the U.S. will not only use existing measures like the Patriot Act, but will also establish “new executive authorities” to blacklist more “entities and individuals supporting proliferation, subjecting them to an asset freeze; new efforts with key governments to stop DPRK trading companies engaged in illicit activities from operating in those countries and prevent their banks from facilitating these companies’ illicit transactions.” [Yonhap]
They certainly do sound very serious about this. And thorough:
Robert Einhorn told the Voice of America that the U.S. has tracked down every trading company and individual in North Korea doing illegal business activities overseas and will freeze their assets. It was the first interview Einhorn has given since being made the U.S. government’s special adviser for nonproliferation and arms control.
Einhorn said the legal basis for past sanctions, which he called “existing authorities,” will be more actively applied and used to freeze assets of North Korean organizations, trading companies and individuals involved in terror or nuclear proliferation activities.
The new sanctions, on the other hand, will be focused on restraining other illegal activities such as trade in conventional weapons, luxury goods, tobacco, counterfeit bills and drugs, he said. He said the U.S. is drafting “authorities” to control those non-terror or nuclear proliferation areas. He said once the new authorities are arranged, the ability of the U.S. to freeze those illegal activities by the North will be strengthened. The details of the new sanctions will be announced by next week, he said. [Joongang Ilbo]
All of this has the potential for some very interesting money laundering prosecutions in the courts. The measure to watch for, however, is whether Treasury will simply declare the entire country of North Korea to be a primary money laundering concern and deny its entities access to the U.S. financial system, something that my spies tell me key people in Treasury have seriously considered. This so-called Fifth Special Measure is to Plan B what the Public Option is to Obamacare. And it wouldn’t be unprecedented. We’ve done this to Nauru and the Ukraine, among other places.
It’s encouraging that the old partisan reflexes really aren’t very probative of how people in Washington see the issue of financial pressure. Most hard-liners agree that all kinds of pressure have to be applied in tandem with at least an offer to negotiate, in the unlikely event that North Korea is prepared to accept the kind of fundamental transparency that even most soft-liners now know it never will.
I haven’t seen this reported in the news yet, but standing alongside the Pueblo judgment, this creates a basis for American victims of North Korean atrocities to try to collect several hundred million dollars from North Korean accounts and entities in third countries, using international agreements that allow for the reciprocal enforcement of foreign judgments.
North Korea was held liable for its role in supporting the Popular Front for the Liberation of Palestine and the Japanese Red Army, which planned the attack together in North Korea. North Korea did not contest the suit. The award consisted of $78 million in compensatory damages awarded to the estates and surviving relatives of the victims, and $300 million in punitive damages.
You can read the decision here: calderon-order.pdf
I’ve assembled more information at this page about other civil litigation against North Korea in U.S. courts.
President Bush removed North Korea from the list of state sponsors of terrorism on October 11, 2008, to reward it for its anticipated progress toward complete, verifiable, and irreversible nuclear disarmament. President Obama reaffirmed Bush’s decision on February 3, 2010. Despite substantial evidence of North Korea’s recent sponsorship of terrorism and his own assurances that he would consider re-adding North Korea to the list, President Obama still has not re-added North Korea to the list.