How Congress can legislate maximum pressure over Donald Trump’s veto

In 1986, Congress passed the Comprehensive Anti-Apartheid Act by a vote that was overwhelming, if not quite so overwhelming as the margins by which later congresses would pass North Korea sanctions. I still have a vague memory of when President Reagan vetoed anti-Apartheid sanctions and took his plea for “constructive engagement” to the American people, making many of the same arguments that the left would make generations later to support “engagement” with Kim Jong-un. Congress, unpersuaded then as now, overrode Reagan’s veto, and the Act became law. The law itself wasn’t much to behold. Its contents included hortatory statements of policy, well-meaning but marginal benefits for the victims of Apartheid, narrow trade sanctions (Krugerrands, military sales, computer exports, tourism promotion), and bans on U.S. government investment in, and procurement from, South Africa. But the embarrassment of a veto override weakened President Reagan. It also convinced South Africa’s white oligarchy that unless it abolished Apartheid, stronger sanctions were sure to follow. My memory of this is much clearer—four years later, during the summer (winter there) of 1990, I worked in South Africa. By then, F.W. DeKlerk had already put South Africa on an irreversible path to dismantling Apartheid, and most whites grudgingly accepted that he had no other choice.

[1986: Congress votes to override President Reagan’s veto of sanctions against South Africa.]

Donald Trump’s chaotic and disgraceful public declination to enforce what should have been “maximum pressure” has, if nothing else, instantly clarified that his pressure on His Porcine Majesty is not remotely maximum. This is particularly frustrating, coming as that pressure, for all its limitations, shows increasingly clear signs of squeezing North Korea’s economy and elites. I won’t present all of my evidence for that contention here, but I’m not alone in asking why Kim Jong-un made sanctions relief his only demand at Hanoi if sanctions aren’t pressuring him. Just as I’ve said for years (defying the academic and journalistic consensus) that sanctions could work, I’ve also said for a year (defying the same consensus) that the pressure wasn’t maximum when Glocom still has the run of our banking system and the Bank of China launders Kim Jong-un’s money with impunity. Weekly, it seems, members of Congress from both parties are expressing their frustration that this President isn’t enforcing the law. Trump’s action last week can only embolden Congress in its rising impatience to overthrow the President’s policy. Trump’s timing undoubtedly boosted one such effort—the BRINK Act, co-sponsored by Senators Van Hollen and Toomey. I have enough text in my computer now to pile the President’s desk with bills for the duration of his term.

There may not be just one reason why our pressure isn’t maximum, although our #Floridaman presidency is surely the most important of them. The incompetence of Treasury Secretary Steven Mnuchin and his effective grant of immunity to China’s corrupt and lawless banks is another. The under-resourcing of Treasury’s North Korea sanctions effort must also be attributed to the same cause. There is also evidence of mismanagement and infighting in Treasury that precedes Trump and Mnuchin. This detailed, deeply sourced story about the Financial Crimes Enforcement Network, or FinCEN, offers an unflattering image of its morale, and of its factional battles with the Office of Intelligence and Analysis. The tone of Treasury’s own Office of Inspector General isn’t as harsh, but for those accustomed to reading OIG reports, it’s troubling. The latest unflattering press report targets Undersecretary Sigal Mandelker, who exhibited none of these unpleasant personality traits described on the single occasion when I met her. But for whatever reason or combination of reasons, people at Treasury sound demoralized and are leaving for high-paying jobs in the private sector, even as Treasury’s workload is increasing. This is what’s known as a “death spiral.”

One traditional way for Congress to bend the executive branch to its will is to pile reporting requirements on the agencies. This isn’t a particularly effective tactic, because if an agency doesn’t have enough people to do the work Congress wants done as it is, adding more time-consuming reporting requirements will only mean that the agencies have fewer man-hours to spend enforcing the laws. A better way would be to put “not-less-than-$” language in the State and Treasury Departments’ appropriations, to force them to spend more of their appropriations on North Korea sanctions enforcement. The last several congresses didn’t do this, mainly because the foreign affairs and appropriations committees didn’t seem to have sufficiently clear and open lines of communication to coordinate such a strategy. (Silos between committee staffs are Congress’s most under-appreciated institutional weakness; the staffers’ job instability and ridiculously low pay, given their responsibilities, are the others.)

Of course, Congress’s sanctions laws assume the existence of a rational president who faithfully executes the laws and appoints officials who are both willing and able to administer them. They give the President the authority to enforce sanctions through the International Emergency Economic Powers Act, Chapter 53 of Title 31 (which includes section 311 of the Patriot Act), and a myriad of regulations Treasury has promulgated under those authorities. But what if those laws and regulations cease to function as Congress intended, due to a combination of under-resourcing, mismanagement, and executive incompetence?

Theoretically, Congress has the authority to impose sanctions even when the President won’t. It’s right there in article I, section 8 of the Constitution: “The Congress shall have Power … [t]o regulate Commerce with foreign Nations, and among the several States.” Not only is Congress’s power here explicit, it’s joined to the interstate commerce clause, which the Supreme Court has broadened dramatically since the 1950s, to give the federal government the authority to enforce civil rights laws in the segregated South. It can pass new laws that, by substituting “shall” for “may,” can ban North Korea from U.S. financial systems directly and deny the President the authority it does not trust him to exercise. One example of this would be a travel transaction ban that would preemptively destroy any prospect for the Samjiyon and Wonsan-Kalma projects to be profitable. Because Kim Jong-un is building those projects with tens (if not hundreds) of thousands of slave laborers, this would have moral, financial, and political consequences for Kim’s misrule.

Of course, someone would still have to enforce these new laws. How can Congress effectively do the work that a huge Treasury Department bureaucracy is supposed to do? Several strategies come to mind. One is for Congress to move authorities and resources away from the Treasury Department and into the Justice Department. The IEEPA and Title 31 aren’t the only authorities that allow the government to enforce sanctions. There are other authorities in Title 18, the Criminal Code, that allow the FBI and the Justice Department to pursue sanctions violations criminally—typically as money laundering, bank fraud, or conspiracy—or through the civil forfeiture laws. Most of these charges, of course, require predicate offenses, such as violations of the IEEPA. Another such predicate prohibition is the North Korea Sanctions and Policy Enhancement Act, which we grafted to the civil forfeiture and money laundering laws to allow Justice to seize, freeze, and forfeit funds directly from correspondent accounts. That strategy has been tested in court, and it works. We designed the law this way because most of North Korea’s enablers never touch U.S. soil and would otherwise be completely beyond the reach of federal prosecutors.

If you’ve been paying attention, you’ve noticed that the Justice Department isn’t pulling its punches against North Korea. DOJ values its prosecutorial independence as much as Donald Trump loathes it. Even before Donald Trump and Steve Mnuchin made Treasury the weak link in “maximum” pressure, the FBI and Justice went to work, using the NKSPEA’s civil forfeiture authorities to chase and confiscate the funds of North Korea’s partners in proliferation and money laundering. DOJ and FBI are now the unsung heroes of maximum pressure. They’re maintaining this pressure with a fraction of the staff that OFAC and FinCEN could potentially dedicate to sanctions enforcement. Because Justice has limited prosecutorial resources, it can only afford to pursue the bigger, fatter targets rather than playing whack-a-mole against small-time ones, as Treasury has done for the last year. DOJ’s actions require higher standards of proof in court, but also tend to have greater impacts than Treasury’s recent designations. If so, it stands to reason that Congress should shift limited budget resources from the parts of government that aren’t working and require the approval of an incompetent president (State and Treasury) to the parts of the government that are and don’t (FBI and Justice).

This may also require Congress to do legislatively what Trump won’t do administratively. For example, Congress could pass a law prohibiting U.S. persons from facilitating any transaction with a person who was designated on, say, March 31, 2019, under an applicable executive order, for transactions involving the Government of North Korea. To avoid ex post facto considerations, the penalties could mirror the existing penalties that apply under the IEEPA today. By making this law a “specified unlawful activity” under the money laundering statute, Congress could give the Justice Department the power to reach, freeze, and forfeit violators’ assets. Those whom it could not jail, it could still bankrupt. It could also legislate a flat criminal prohibition on knowingly facilitating transactions with the Government of North Korea within U.S. jurisdiction. Something like that prohibition already exists now, because of North Korea’s designation as a state sponsor of terrorism.

Congress could also legislate (or require the Secretary of the Treasury to impose one or more of) the special measures in Section 311 on any financial institution that fails to conduct due diligence against North Korean money laundering. Violations of those special measures also carry both civil penalties and criminal punishments. We forget that not all of those Special Measures block a bank out of the financial system entirely. Some impose “enhanced due diligence” and reporting requirements on their transactions, which by themselves raise a bank’s operating costs, and harm its reputation, credit rating, and stock price. Congress might give the Treasury Department waiver authority for banks that demonstrate by clear and convincing evidence that they’ve cleaned up their acts.

Eventually, Congress could even claim the power to designate persons, but only within some careful limits to avoid running afoul of the Bill of Attainder Clause. If Congress has the power to regulate foreign commerce, and if it also has the power to conduct investigations (something Congress routinely does through its committee staffs, or the General Accountability Office), there’s no legal reason why the foreign affairs oversight committees in the House and Senate couldn’t self-appropriate and build their own sanctions investigative infrastructure to supplant OFAC. Congress certainly has the power to issue subpoenas, if necessary, but there is already enough information in the outstanding reports of the UN Panel of Experts, Justice Department filings, and credible NGOs like C4ADS and RUSI, to keep a small staff of experts busy recommending designations for years. Legally, this is tricky because the Bill of Attainder clause says that Congress can’t directly impose criminal-like punishments on a specific person or an articulable list of persons, but Congress can impose reasonable regulatory limits based on sound and neutral administrative reasons. The courts will review a bill of attainder question on its particular facts. The key question will be whether Congress intended to punish for prior acts or implement “a legitimate regulatory scheme” to prevent future misconduct.

I imagine the system would work roughly like this: (1) a new GAO division identifies “substantial evidence” that a foreign person should be denied access to U.S. commercial and financial systems; (2) GAO refers that evidence to the Treasury and the Justice departments; (3) unless the Treasury Secretary returns a waiver within 45 days finding, by clear and convincing evidence, that the target has come into compliance with the law, the target’s ban from U.S. commercial and financial systems goes into effect. After that, the ban remains in effect until repealed. (Congress can’t apply a similar forcing mechanism to any sort of judicial action. That would interfere with the Justice Department’s prosecutorial discretion.) Why make this body a new GAO division? Because GAO staff have pay scales and job stability comparable to executive branch employees, which would allow this new division to attract and keep top-notch talent. (No congressional staffer is ever more than a wave election or a #MeToo scandal away from defaulting on his mortgage. That’s hardly the sort of place where anyone with a family or a mortgage would want to work. That’s a topic that deserves its own post.)

This strategy would entail a significant, long-term revocation of constitutional, statutory, and budget authority from the presidency by Congress. It would be another example of how Trump’s presidency seems likely to diminish the power of future presidents. It would not be the first time in American history that power has shifted between the political branches. It’s not the familiar way we’re used to enforcing sanctions in this country. It certainly isn’t conventional. Now convince me it’s unconstitutional.