EmailEmail
PrintPrint
Cuba trade hurdle puts Treasury in limbo
Wednesday, July 20, 2005

WASHINGTON -- Shipments of Montana peas to Cuba have not risen to headline status in Washington, but for a Treasury Department trying to rebuild its depleted ranks, they have become a serious matter.

Sen. Max Baucus of Montana, the Senate Finance Committee's ranking Democrat, is single-handedly blocking every senior Treasury nominee -- a dozen or more -- until the Bush administration changes obscure regulations governing agriculture trade with Cuba.

The Finance Committee will hold a confirmation hearing today for the Treasury Department's would-be deputy secretary, its undersecretary for domestic finance, its management chief and its head lobbyist. But nobody is expecting their confirmations any time soon.

Beneath Treasury Secretary John Snow, the Treasury's upper echelons are studded with vacancies. Treasury officials had hoped that a new team would quash talk that the once-powerful agency is losing its stature.

Bush has nominated a veteran Washington hand, Robert Kimmitt, to be Snow's deputy. He has tapped his re-election campaign policy chief, Timothy Adams, as undersecretary for international affairs and has named a respected international finance lawyer, Randal Quarles, to be undersecretary for domestic finance.

Baucus is blocking them all, along with the nominees for assistant secretaries for tax policy, terrorist finance, intelligence and analysis, legislative affairs and management. He is also holding up confirmation of the U.S. executive director of the World Bank, the comptroller of the currency and the director of the Office of Thrift Supervision.

Baucus and farm-state allies, from both parties and both chambers of Congress, say the administration has only itself to blame.

The dispute's root lies in a law, passed in 2000, that loosened restrictions on agricultural sales to Cuba. Under the Trade Sanctions Reform and Export Enhancement Act, such sales can be made if Cuban customers pay cash in advance or finance the deal through an acceptable, third-country bank. The law bars a president from using agricultural trade as a foreign policy tool without congressional consent.

The law did not define "cash in advance," so for four years, agriculture sales payments have been made after goods have reached Cuban ports for inspection. The goods could not be transferred to the Cuban customers until their cash deposits were registered.

But this year, the Treasury made a subtle but significant change: Cash for such sales must be deposited in a U.S. bank before the goods leave the United States. Treasury officials say they were clarifying the definition of "cash in advance" at the request of banks concerned that they not violate the Cuba trade sanctions.

The regulation, drafted on advice from trade counsel, follows the standard definition, Treasury spokeswoman Molly Millerwise said.

First published on July 20, 2005 at 12:00 am