Republicans Rebel on N. Korea Policy, Demand GAO Money Laundering Inquiry
You may recall that in this post and in this piece for Front Page Magazine, I suggested that our own State Deparment’s attempts to return $25 million to the North Korean regime — much or most of it proceeds of crime — could violate U.S. money laundering laws, as well as two U.N. resolutions the United States successfully lobbied for less than a year ago. As it turns out, great minds think alike.
Now, with Russia about to step up to facilitate this faustian transaction, six House GOP foreign policy heavyweights have signed a letter asking the General Accountability Office to determine whether it’s legal. The letter cites the very same sections of the criminal code I’d cited in the pieces linked above (cool!). Among the members is Ileana Ros-Lehtinen, the Ranking Member of the House Foreign Affairs Committee.
Here’s the text; my deepest appreciation to both of the readers who forwarded it:
The Honorable David M. Walker
Comptroller General of the United States
U.S. Government Accountability Office
441 G Street, N.W.
Washington, D.C. 20548Dear Mr. Walker:
A number of us who presently serve, or who have served in the past, on the Committee on Foreign Affairs have been concerned about recent reports that U.S. government officials may have been engaged in efforts to expedite the transfer of North Korean funds held in Macau-based Banco Delta Asia. According to past U.S. Treasury Department statements, a sizable portion of the $25 million being held in North Korean accounts in the Macau bank has been derived from illicit activities ““ including missile and arms sales to rogue regimes, drug smuggling and counterfeiting of U.S. currency.
A September 15, 2005 press release noted in part: “The U.S. Treasury Department today designated Banco Delta Asia as a “˜primary money laundering concern’ under Section 311 of the USA Patriot Act because it represents an unacceptable risk of money laundering and other financial crimes. Banco Delta Asia has been a willing pawn for the North Korean government to engage in corrupt financial activities through Macau, a region that needs significant improvement in its money laundering controls. The Treasury Department further noted in a March 19, 2007 statement released in Beijing that “the events of the past eighteen months demonstrate our lack of tolerance for illicit activity conducted in the global financial system. Financial institutions that facilitate weapons proliferation, terrorist financing, narcotics trafficking, and other illicit financial activity should be on notice of the significant consequences they face.
Daniel Glaser, the Treasury Department’s Deputy Assistant Secretary for Terrorist Financing and Financial Crimes, remained in Beijing for several days in March to seek to facilitate the resolution of the Banco Delta Asia issue with Chinese authorities. Pyongyang has successfully linked transfer of the funds to fulfillment of its commitment to denuclearization made in the February 13th Six-Party Joint Statement ““ although the Statement makes no mention of the Banco Delta Asia funds.
There have been repeated press reports in recent weeks that Administration officials have been actively engaged in efforts to secure the transfer of these formerly frozen North Korean funds to banking institutions in China , Russia , or Western Europe . The Washington Post carried a report on May 17th that the State Department had even made a request to an American financial institution, Wachovia Bank, to transfer the funds, despite Banco Delta Asia being blacklisted earlier by the Treasury Department. Assistant Secretary of State Christopher Hill was quoted as stating at a Korea Society event that “I can assure you”¦we are not going to allow $25 million or even $26 million to get between us and a deal that will finally do something about nuclear weapons on the Korean peninsula.
We find the above set of circumstances to be disturbing. We would note that the funds in Banco Delta Asia were frozen by Macau authorities only after the U.S. Government had cited Patriot Act concerns about both the bank’s operations and, specifically, the North Korean accounts. We therefore request that GAO evaluate whether State Department and Treasury Department actions undertaken to facilitate the transfer of North Korean funds are fully consistent with the enforcement of Section 311 of the Patriot Act and with the sanctions regime imposed under UN Security Council Resolution 1718, which our Government actively supported in its vote on October 14, 2006. We would also request that GAO evaluate whether all U.S. official actions undertaken in connection with support for the transfer of North Korean funds held in Banco Delta Asia accounts are in keeping with the prohibitions regarding money laundering and counterfeiting as stipulated in the U.S. Criminal Code, Title 18, sections 1956 and 1957.