Jane VaynmanBolton on North Korea

What is John Bolton talking about? What is he ever talking about?

Okay, we get it. You don’t like the deal with North Korea. Why we needed another Wall Street Journal op-ed is beyond me.

This doesn’t, of course, mean I didn’t read it. Then I went for a walk in the sun to detox my brain.

Bolton has this idea that the North Korea deal will encourage other states to take advantage of poor little US. And they are all after the Bomb!

Instead, observers—especially Iran and other nuclear weapons aspirants—have witnessed embarrassing U.S. weakness on a supposedly unrelated issue, unmentioned in the Feb. 13 agreement. That issue involves North Korea’s widely publicized demand that approximately $25 million frozen in Macau-based Banco Delta Asia (BDA) …


The North’s access to international financial markets to launder its ill-gotten revenues is critical both to continued financing of its nuclear regime and to keeping Kim Jong Il in power. If this is even close to what the State Department is prepared to do, who will ever again take us seriously when we threaten financial strangulation of rogue states and terrorist groups? Granting this North Korean demand would make U.S. concessions on BDA look paltry by comparison.

Iran and other nuclear aspirants? Which other nuclear aspirants, exactly? By my count there is Iran, and well, Iran.

The other candidates are quite far from this point (in some cases technologically, in others politically) and their future decisions probably hinge on the macro-level outcome of the Iran and NK nuclear issues, rather than whether or not Wachovia is willing to handle a transaction or two.

(What’s Wachovia have to do with it? Patience, grasshoppers.)

Even if we are really talking about just Iran, then Bolton still misses the point. The “financial strangulation” has a lot less to do with U.S. credibility than it does with European and especially Russian hesitation over sanctions. The point is, how will rogue states take the U.S. seriously if it’s just the U.S. alone making the threats? But hey, Bolton was only Ambassador to the United Nations, so I’m sure he put a lot of thought into the roles of other states.

As for terrorist groups, I doubt they see loss of market access as a deterrent to blowing things up. See, they are terrorists.

Now, the Wachovia bit. Bolton is obsessed that the North Korea deal has some secrety side arrangement including US bankers (code word!), the Trilateral commission and the Illuminati. Well, at least one bank, Wachovia:

Third, we now face the nagging question whether there are other secret side deals beyond BDA. Of course, the BDA agreement was not so secret that Kim Jong Il was barred from knowing about it, by definition. Most troubling, however, is that State apparently thought it too sensitive to share with the American people until the February deal broke down in an unavoidably public way. But even this was not enough for North Korea, which, sensing U.S. weakness, continues to press for more. Although conflicting stories abound, North Korea may be seeking not just the return of the BDA funds, but something much more significant: guaranteed access to international financial markets, even through an American bank. Indeed, this week Wachovia Corp. confirmed that it had been approached by the State Department to assist in the transfer of funds.

It may just be all this time speaking Russian, but I don’t understand sentences like “Of course, the BDA agreement was not so secret that Kim Jong Il was barred from knowing about it, by definition.” Да, конечно!

On the Wachovia thing, the International Herald Tribune explained that “market access” meant the ability to transfer funds without loading a wagon train up with gold bullion:

An official familiar with the long-running dispute said earlier this month the communist government asked for permission to use an American bank to transfer the funds from the Banco Delta Asia bank in the Chinese territory of Macau.


North Korea wants to use a U.S. bank because it believes the transaction would help secure its continued access to the global financial system, the official said.

Once the money is moved to a U.S. lender, it would be sent to a bank in a third country, perhaps Russia, he said.

Ok, so I am not convinced that North Korea won’t cheat on this deal as they have on others, or that they will freeze their nuclear program when they get that BDA money. But, compromise with NK is an option that needs to be tested. We need to know whether the NK nuclear program is at least somewhat negotiable on these terms.

Budging on $25 million is not a step so publicly conciliatory as to be forever irreparable in the eyes of future bad guys. Actually, I think the public nature of the “concession” on BDA could be a plus if NK does end up cheating. Members of the 6-Party Talks and other states would be able to see that a compromise approach was attempted but did not work. They may be more willing to accept and and actually enforce a harsher approach if it becomes necessary.


On a completely utterly unrelated note, the UAE may be planning to build a Death Star under the guise of a conference center.


  1. Haninah (History)

    I was discussing the Wachovia angle yesterday with Eric, who’s been covering this saga for Foreign Policy’s Passport (http://blog.foreignpolicy.com/node/4103), and in my opinion, having the $25 million released through Wachovia is a clever win-win for the two sides. If North Korea’s concern is that other banks won’t do business with them after seeing what the US did to BDA, they can point to this and say, “look a US bank took our money, you won’t get burned for doing it”; the US, on the other hand, if it does want to pull a BDA in future on some bank that deals with the DPRK, can say, “this was a specially negotiated deal, through a trusted US bank, under special supervision… we still reserve the right to Gitmo any banker who does business with KJI.”

  2. China Hand (History)

    Jeffrey’s right. Bolton’s argument makes no sense. He’s trying to substitute an implausible narrative (the North Koreans are scheming not to get their money back) for a more plausible one: that hardliners in the Treasury Department allied with Bolton are scheming to block the BDA resolution so the Six Party Agreement will fall apart. His gyrations have to be even more difficult and contrived because the State Department is seeking to force the issue by identifying a bank (Wachovia) that is willing to take the money if Treasury agrees. So here come Bolton’s bizarre conspiracy theories about “secret side agreements”. It’s all rhetorical chaff, thrown with increasing desperation because , if there’s another Condi talks to Hank moment, Treasury grants the approval and the money goes to North Korea and the Six Party Agreement proceeds, journalists and Congresscritters are going to start thinking: it looks like some people in Treasury held up this agreement for three months. What was all that about? I’m glad ACW is paying attention to this issue. Maybe other outlets will follow. I provide an overview of the implications of a BDA settlement for the hardliners over at China Matters. http://chinamatters.blogspot.com/2007/05/neo-conundrum.html

    P.S. the BDA deal wasn’t secret. It was discussed by Chris Hill in a press conference in Beijing the day after the deal was signed. Claiming the deal was “secret” is an attempt to pretend that BDA was not a part of the Six Party deal and so it can be disrupted and the deal derailed.PPS: I like the reference to”rouge” states. Makes the whole issue sound rather exotic and sophisticated.

  3. hass (History)

    There are many aspirants for nuclear power other than Iran – Argentina and Brazil just got there, and others including Jordan, Egypt and Nigeria have voiced an interest in nuclear power. If howeever you’re talking about aspirants for nuclear weapons then you really have no basis to simply include Iran. All of them “could” one day build bombs, as could Iran – but there’s simply no evidence of it.

  4. jane (History)

    I should start calling them “rouge” states, as that’s far more entertaining. But alas, just a typo.

    I think being an aspirant for nuclear power is quite different than for nuclear weapons. In saying that there are few other aspirants for nuclear weapons, I don’t mean that the situation would be the same in the future. Yes, one day other states “could” build weapons. In fact, some, like Japan, could do so sooner than later if they so desired. However, I think the decisions of states to pursue weapons are not as much about “could we do it” as “should we do it.”

  5. yale (History)

    Jane wrote:

    I think the decisions of states to pursue weapons are not as much about “could we do it” as “should we do it.”

    The “should we do it” often depends on what a nation fears its rivals may do, at some point in an unknowable future.

    This was understood in the “dawn” document of post-war nuclear arms control, The Acheson-Lilienthal Report on the International Control of Atomic EnergyMarch 16, 1946

    which pointed out:

    The development of atomic energy for peaceful purposes and the development of atomic energy for bombs are in much of their course interchangeable and interdependent. From this it follows that although nations may agree not to use in bombs the atomic energy developed within their borders the only assurance that a conversion to destructive purposes would not be made would be the pledged word and the good faith of the nation itself. This fact puts an enormous pressure upon national good faith. Indeed it creates suspicion on the part of other nations that their neighbors’ pledged word will not be kept. This danger is accentuated by the unusual characteristics of atomic bombs, namely their devastating effect as a surprise weapon, that is, a weapon secretly developed and used without warning. Fear of such surprise violation of pledged word will surely break down any confidence in the pledged word of rival countries developing atomic energy if the treaty obligations and good faith of the nations are the only assurances upon which to rely. Such considerations have led to a preoccupation with systems of inspection by an international agency to forestall and detect violations and evasions of international agreements not to use atomic weapons. For it was apparent that without international enforcement no system of security holds any real hope at all. In our own inquiry into possibilities of a plan for security we began at this point, and studied in some detail the factors which would be involved in an international inspection system supposed to determine whether the activities of individual nations constituted evasions or violations of international outlawry of atomic weapons. We have concluded unanimously that there is no prospect of security against atomic warfare in a system of international agreements to outlaw such weapons controlled only by a system which relies on inspection and similar police-like methods. The reasons supporting this conclusion are not merely technical, but primarily the inseparable political, social, and organizational problems involved in enforcing agreements between nations each free to develop atomic energy but only pledged not to use it for bombs. National rivalries in the development of atomic energy readily convertible to destructive purposes are the heart of the difficulty. So long as intrinsically dangerous activities may be carried on by nations, rivalries are inevitable and fears are engendered that place so great a pressure upon a system of international enforcement by police methods that no degree of ingenuity or technical competence could possibly hope to cope with them. …We are convinced that if the production of fissionable materials by national governments (or by private organizations under their control) is permitted, systems of inspection cannot by themselves be made “effective safeguards . . . . to protect complying states against the hazards of violations and evasions.”

  6. RS (History)

    And we all know how much good faith Iran has………..

    As a side note, it will be a nice change of fashion from the dishdasha to the Emperor Palpatine cloak and Stormtrooper suits.

  7. joedemocracy (History)

    Dear Arms Control Wonk and Jane,I Always enjoy a bit of Bolton bashing since I have stopped keeping a watchful eye on him since he was knocked out of the UN. Thanks for the update from the sidelines. I have added your site to my blogroll and will be back periodically to read more.