Pod Save the World - Who is poisoning girls in Iran?

Episode Date: March 8, 2023

Tommy and Ben discuss the suspected poisoning of Iranian schoolgirls, new intel on Havana syndrome, the case for dismantling the DHS, potential Chinese election interference in Canada, South Korea’s plan to end their forced labor dispute with Japan, the deadly battle for Bakhmut in Ukraine, the worlds greatest wine heist in Spain, and another questionable summit in the UAE. Then, US Deputy Treasury Secretary Wally Adeyemo joins Ben in the studio to discuss sanctions and their role in the Russia-Ukraine war. For a closed-captioned version of this episode, click here. For a transcript of this episode, please email [e-mail] and include the name of the podcast.

Welcome back to POTS Save the World. I'm Tommy Vitor. I'm Ben Rhodes. Ben, my mother is in town today. State visit. State visit. The second of this current administration. She's meeting my daughter for the first time, Lizette. The Lizette administration. And she told me that if I didn't mention her on the show, that she'd kill me. And there's proximity now so she could make that happen. So, mom. Duly noted. Glad you're here. Yeah. It's very nice though welcoming someone from Massachusetts to Los Angeles in March. They just sort of like can't believe this world exists. We feel it's like cold here. Like people are freaking out that it's super cold here because it hits like, you know, 50 degrees. And then people come here from other places and they're like, oh, this is great. Six feet of snow.

Ben, you're going to D.C. next week. What's going on? Yeah, I just wanted to throw out a plug for the world those in D.C., of which I know there are at least a few. Definitely. David Lamie, friend of this podcast, Shadow Foreign Secretary, is going to be in D.C. next week. And there's a public event at the Center for American Progress at 11 o'clock on Wednesday. So one week from the day this podcast comes out, March 15th, David Lemmy will be a cap at 11 o'clock. People should check it out and go to the Center for American Progress website.

Is he doing like a speech? You're going to do a Q&A with him? Yeah, he's doing like a talk and moderated campfire side chat. I listen to a great interview he did on a competitor podcast that will not names. The rest is politics, his interviews. And he was getting feisty with a former conservative MP and a former Blair government sort of senior communications guru. It's the rest is politics podcast. it's their like interview show. It was very good though. I emailed them. I was like to hear you

like kind of getting pissed off in these interviews. Maybe Ben and I need to push you off. We're a little soft. Yeah, we're a little easier. Yeah. I mean, he started talking. It's like, whatever you say is down back here. Yeah. Yeah. We got a great show today then. We're going to cover a lot of ground. There has been this very scary rash of poisonings of young school girls in Iran. We're going to talk about that. News about Havana syndrome. Why it's troubling that the Department of Homeland Security is collecting intelligence. I got a pitch for you on DHS. How China and immigration are creating some big political problems for Canadian Prime Minister, Justin Trudeau, a breakthrough potentially for South Korea and Japan, Ukraine news, some very fun-sounding thieves

that I want to hang out with and tell you about. And then, Ben, you did our interview this week. What are we going to hear? Well, we have Wally Adayamo, the deputy treasury secretary, back in studio, where he walks us through kind of the situation report, if you will, on Russia's sanctions. He's really the point person for those. So we talk about the efforts to deny Russia, oil and gas revenue, pretty fascinating details about how Russia is trying to cheat that regime and what Treasury is trying to do to stop other countries from helping Russia evade sanctions. We talk about life for the oligarchs and the efforts that we're undertaking to stop Russia from getting the inputs needed to sustain its military industrial complex.

So really good, clear, understandable, digestible update from Wally. People should definitely check that out. Yeah. And also keep an eye out down the road for some exclusives. exclusive Wally content on sanctions on the Pod Save the World YouTube page. So smash that subscribe button. Yeah, a little Wally World here on Potsie World. Yeah. Wally World, though. I love that. Yeah. Okay. Let's go to Iran then, because there's this very bizarre, scary story, set of stories out of Iran, where more than 1,200 schoolgirls from 60 different schools

have fallen ill since November and are suspected of being poisoned. CBS News reported that one Iranian lawmakers said the number could be up to 5,000 schoolgirls at 230 schools, although nobody else has reported a number that high. Regardless, a bunch of victims reported like a weird smell, maybe of paint, maybe of something, something they didn't recognize, followed by these symptoms. After downplaying the attacks, on Monday, Iran's Supreme Leader finally spoke out and said it was an unforgivable crime that should be punished by death if it was deliberate, so intense. On Tuesday, Iranian authorities announced they made some arrests. Previously, the government has blamed sort of like nebulous enemies of Iran, which usually means the U.S. or Israel,

but I don't think they've specified. Some Iranian politicians have suggested the perpetrator were religious groups opposed to girls getting educated. Some activists have said the poisonings were revenge for women joining the protests against Iran's morality police in support of Masa Amini. The poison attacks started in the city of Gohm. They spread across the country. Some girls had to be hospitalized. Medical staff and teachers have accused the government trying to intimidate them or intimidate victims out of talking to the media. It is all brought back some very painful memories of a wave of acid attacks on women back in 2014,

which were designed to mutilate, terrorize women who the assailants believed weren't dressed conservatively enough. The United States is called for a UN investigation of the incidents. Parents of some of the victims have staged protests. Ben, I mean, I'm wondering if any of the sort of theories that have been floated sound more or less plausible than others to you. and what you think like another wave of protests about the treatment of women could need for the current government? I mean, we obviously don't know which theory is right. Ranked speculation. Yes, we are.

It's just horrifying, you know, having daughters too. I just like I can't imagine. I mean, anybody would think it's horrifying. I just envision sending my daughter to school and then, you know. Look, clearly, you know, to delve into the theories, there are very existential questions in play in Iranian society right now. You know, the protest movement kind of got to the heart of what kind of country is Iran and, you know, what is, you know, the competing viewpoint of those who want equality for women and girls. and there are like really hard-line people there who believe the opposite thing. And those people weren't just going to go away because this movement got traction.

And so whether or not the government, you know, is behind it, the government is witting of it. There's factions because there are in Iran. There are these kind of government-associated kind of militia-type groups or the besiege, just kind of goons. The morality police were kind of like this too. They were kind of quasi-governmental, you know, there are varying degrees to which the government could be complicit or not. You know, this could be happening because the government wants it to be happening, or this could be some weird hardline faction that there's a wink coming in their direction from somebody. The basic point I would make,

though, because it gets to what happens next, look, I think they're going to be real convulsions in Iranian society and politics for years to come, you know, and, you know, and the clerical establishment and the hardliners are not just going to, like, relinquish power. No. No. And, And so tragically, I think you're going to see a push and pull inside of Iran where, you know, the protest surge and there's reprisals that could include really horrific shit like this, you know. Yeah. The other thing I saw was Iran's currency, the Rial, has plunged 30% against the dollar since the beginning of the year, meaning it's increasingly worthless. So you are seeing, I don't know if it's an entirely a sanction squeeze, if it's some other broader economic challenge. But there's a lot of crosscurrent and pressure against the government right. now in terms of like deeply upsetting the population and leading people to want to do things that might be unheard of five years ago, 10 years ago, like take to the streets and protest. Yeah. And one of the challenges to the people that are like very hyped up on, you know,

sanctioning Iran and, you know, they will tell you like the hardline voices in this country will tell you that the Iranian regime is a, you know, apocalyptic, religious kind of cults, right? But wouldn't the logic of that be that those types of people don't just give up power because they've been sanctioned? You know, this was always the problem, which is precisely because it is true that there is, you know, the absolutism of a religious theocracy is those people don't just give up power easily. I think it means we're going to be in for some very rough times inside of Iran. Like if you're turning Iran into kind of a failed state economy, that doesn't mean that the government. is going to go away, it may mean that the worst elements in that system for a time move to the forefront. And that risks nuclear crisis, that risks, you know, greater severity in terms of the

punishment and the raining people. It could get worse before it gets better. Yeah, absolutely. Changing gears here to a big story in the U.S. There was a new U.S. intelligence assessment that was released by the Director of National Intelligence of Real Haynes, her office that concluded that is, quote, very unlikely that Russia or any other foreign. foreign actor or for an adversary is responsible for Havana syndrome. Havana syndrome is this catch-all term that describes the approximately 1,000 cases of health issues like nausea, headaches ringing in the ears, unexplained ailments that have afflicted U.S. government personnel working abroad and sometimes their families.

The symptoms were first reported by staffers working at the U.S. Embassy in Cuba back in 2016. There's been a lot of speculation that Havana syndrome was caused by some sort of Russian weapon, a directed energy weapon was one theory, maybe some sort of surveillance act. that created concussion-like symptoms by accident, but these intelligence agencies in the U.S. couldn't find any evidence or pattern to prove these theories. Now, what makes this very delicate and complicated is that the government isn't doubting that the symptoms and the harm felt by a lot of people was real. They just don't believe that it was an attack by a foreign government or adversary.

In most cases, they believe these were preexisting conditions or environmental causes. There are some cases that are just sort of truly unexplained. some of the victims in advocacy groups for the victims expressed frustration with the report as they are still living with these unexplained and in some cases debilitating health problems. Some of them pointed out that the number of new Havana syndrome cases have dropped precipitously since the Russian invasion of Ukraine, the suggestion being that Russia got distracted or stretched too thin by the war to keep doing this stuff, which is sort of like interesting circumstantial evidence.

But Ben, there's sort of like two kinds of damage here. The first is this, the pain and suffering the victims felt, right, regardless of that happened. Like, that is a huge problem. But the second tranche is serious diplomatic damage that's happened over the past six years, right? The Trump administration used Havana syndrome as a pretext to remove employees from the U.S. Embassy in Cuba, expel Cuban diplomats, make it harder for Americans to travel to Cuba. They basically rolled back all the progress that the Obama administration had made that you helped negotiate in response to medical ailments.

by the way, no one ever accused the Cuban government of being behind, right? It just happened on their territory, supposedly. And then you also had like top U.S. officials, both in the Trump and Biden administration, threatening Russia over this, which isn't great for, you know, U.S. credibility in these matters. So really just like a very unfortunate place to land. Yeah, one of the weirder stories in recent years, and just to take it in pieces, I mean, first of all, like I know people and have had people that I know who reached out to me, who are in this group of affected people. Like people got, like people are suffering from health issues. And by the way, the people reach out to me are not just people served in Cuba to other places.

What's so weird about this story, though, is that, and I do want to focus in on the Trump piece of it, there was never a time, like you said, where a U.S. intelligence agency or the FBI, right, which is law enforcement and intelligence agency, came out and said, hey, we think the Cuban government. did this, right? Or that they came out and said, we think the Russian government did this. From the very beginning, there was something strange about how skeptical the intelligence community was that this was a foreign attack. And when you look at the reports that came out recently, pretty categorical. Like, we just, the U.S. intelligence community does not believe that a foreign government did this. He was like five agencies came together to work on this. I think the CIA probably led it.

And they came away thinking it was highly unlikely as a foreign adversary, highly unlikely. that such a type of weapon, like a directed energy weapon, exists. Yeah. I mean, they really tried hard to get the bottom of this. You remember last week, we talked about confidence. And the language was about as, you know, this was not hedged. This was like highly unlikely. Like, we just don't think this happened.

Right, right. And that's pretty dramatic. Now, it makes you wonder, like, how did this thing come out of the gate? And if you go back to that time, because I was recently out of government, and he started here about this, the Trump people totally use this to justify shuddering our embassy in Cuba, rolling back the opening to Cuba more dramatically. And you talk about like they didn't blame, well, Marco Rubio, who by the way, was chair of the Senate Intelligence Committee, was not shy about blaming the Cuban. No, not at all. Like, I really want to know, like part of

the story that we just don't know here is what did the Trump people know at that time? Because they at least allowed for this cloud to settle over the Cuban government. And it wasn't until these, you know, quote unquote, attacks or events started to happen in other places that, you know, the focus shifted. So first point is this totally discredits the idea that, like, we needed to roll back the opening to Cuba because of Havana syndrome, which, you know, why is he even called that at this point? And so the justifications for the maintenance of a hardline policy on Cuba continue to fall by the wayside. We've, I don't need to believe it on this podcast, but like there's now every reason to roll back, the Trump rollback of the Obama policy, right? For border reasons, humanitarian reasons, foreign policy reasons. Common sense.

Common sense reasons. Now this reason. And because you might want to travel to Cuba if you're listening to this. But then there's a bigger issue here, which is that. this kind of thing has like an impact on the credibility of the United States. Like we just move on to something else, but people in Latin America or people in Europe are kind of like, hey, what was this the Havana syndrome thing we heard about for years? And there's just a lack of an explanation about what the hell happened here. It's still kind of missing.

And I'm sympathetic to the Biden people to some extent because they weren't around for most of this when this kind of got momentum. But like was this like make people have been. reacting to like some encryption technology or or maybe people just there was a psychosis that came with like hey these symptoms could be Savannah syndrome that understandably if people started to have like intense headaches and hearing things they're like oh my god I must have been targeted with the vanis syndrome yeah I mean the FBI sort of floated this sort of like group psychosis explanation I think the intelligence agencies that assessed it sort of shot that down that said I think you know when the Trump administration ended and the Biden administration started I think they

welcomed people to come forward with cases. And a lot of people probably heard about Havana syndrome maybe had some health problems that they couldn't explain and reported those. So that becomes part of that like 1,000 incidents count, right, that seems to inflate the volume and number. But the number of like truly acute, unexplained cases is far, far lower, like maybe in the dozens. Yeah. And one of the thing I actually, I don't think I've talked about this. I was in the last time I was in Cuba you know I don't know when it was it's a while ago maybe early 2018 I saw some people I knew in the Cuban government and they were like you know adamant like we have no idea what the fuck this thing is and I'm not suggesting these are all

like you know like Democrats they're not there in the Cuban government but the point is we have like a history of just, you know, how would you feel if you were Cuba? Like, like, you've been, you've had the label Havana syndrome affixed you. Obviously, the Cuban government does harass our diplomats at times. Like, there's very true stories of shit that they've done. So I'm not letting them off the hook. But there's a general point about U.S. credibility when these things happen. Like, I don't know, this is a weird episode. And people are going to continue to pull this thread. And the more information that can be put out about what happened. And the decision, in the Trump administration about why to elevate this.

Remember, Rex Tillerson was talking about it? Like, when we didn't know what it was, was that, I mean, in a normal administration, it'd be a pretty big scandal if basically, in order to service a political goal, which is to get tough on Cuba for a Florida audience, you just ginned up something that we didn't have supporting information for? Like, I don't know, that seems like a big story. But in the Trump context, it's, you know, it's a medium story. One of a million, yeah, exactly.

Speaking of weird intelligence collection or problematic intelligence collection, Ben, Politico reported that for years now, the Department of Homeland Security has had a secret domestic intelligence program that allowed DHS officers to seek voluntary interviews with nearly anyone in the United States, including people in immigration detention or prison without first speaking to their lawyers. It's called the overt human intelligence collection program. I hate the names of these things. The program's activities are part of the DHS Office of Intelligence and Analysis. they called INA. The program was supposed to gather information on threats like drug trafficking, organized crime, but the whole thing is a mess. So Politico did a great report on this. They got some internal documents that show the department staff have raised concerns about the legality and the utility of these activities. Here are two examples. There's one quote from an employee that

says, many taskings seem to be law enforcement matters and not for an intelligence organization, even if we are technically allowed to do this, should we? What was the intent of Congress when they created us. Another said, showing where we provide value is very challenging. That's pretty damning. So long, complicated, interesting story. There are concerns about the DHS intelligence mandates, civil liberties issues, if you have employees like interviewing people without a lawyer. Everything about this is a mess, which Ben brings me to my hot take of the day for you, which I want to run by you, which is, I think the Department of Homeland Security should be dismantled. Should not exist. It's a legacy of post-911 hysteria. Yeah. The Bush administration resisted it at first, but then

Joe Lieberman and a bunch of goobers in Congress forced their hand. The Department of Homeland Security jams 22 agencies and hundreds of thousands of employees together in ways that make no sense. How are FEMA in the Secret Service connected? Why are ICE in the Coast Guard under the same roof? The politics of this thing I'm calling for right now are terrible, right? You don't want to be seen as anti-Homeland security, but it is not made us safer. It's redundant. It's inefficient. It's legally and ethically fraught. So let's dismantle it. Leave the law enforcement in to work to the law enforcement guys and the intel officers and then leave, take immigration back to the State Department, make FEMA to stand-alone thing. Like, you'll save a ton of money. I think

you'll save a couple billion a year. The whole agency makes no sense. I love this take. And this is, by the way, no shot at the people that work at the Department of Homeland Security or even lead it. It's just because it's not their fault. This should not exist. This is created after 9-11 and a kind of hysteria of like, we must do something, you know? And it was basically created to be this like mega terrorism protection office, you know, like they became the sprawling department. But it had the effect of infusing that post-9-11 mindset into all these other functions of government. Right. Like integration. Exactly, right? So, you know, for those of those who was older than remember, it started with like color-coded threat alerts, which seemed to conveniently coincide

with George Bush's political calendar. Like, his approval writing would go down. and the terrorism threat would go up, right? But then the other thing is if you take things like immigration enforcement, just to take that one example, that used to be in DOJ, right? Well, if you take that and you plop it into a place called the Department of Homeland Security, of course immigration becomes much more securitized, right? And everything from like this thing, like the intelligence gathering, like, you know, a bunch of DHS spies, like that's not something that should exist.

But then like ICE becomes like, a security agent and more than it is like a legal question, right? And so it's securitized all these functions. Look at TSA. Like, we are still taking off our fucking shoes when we get on a plane. For no reason. And I must have been fucking red flagged by some Trump guy because I can't get precheck. Like, oh, oh, I would got dropped. I precheck status. It went away during the Trump years, even though it wasn't expiring yet. Interesting. And then I did all the things paid the money. Like if anybody's listening who can help me with this. You get shadow banned. I just can't, I'm shadow ban from Precheck.

So every time I'm taking my shoes off, I'm like, this is insane. But this is a symptom of having a department that securitizes all these different aspects of American life. It should absolutely not exist. The big pre-9-11 failure was the failure of intelligence sharing mostly between the FBI and the CIA. Guess what? Neither of those agencies are in DHS. Not the Coast Guard and the Secret Service. And, I mean, go on that website and just look at all the functions of government that are underneath the Department of Homeland Security.

$240,000 employees and a $38 billion budget in 2015. And by the way, what's interesting, too, is that like now all the focus on Ali Marcus' secretaries on the border, like Tom Ridge, the first guy, you literally thought he's just like a terrorism guy. Yeah. So like the expectations placed on the person who runs this department are constantly shifting. Completely changed. DHS has morphed into an immigration agency. Yeah. A great anecdote in this 2005 Washington Post article about the formation and how ad hoc and half-assed it was.

So the agency that supplies prosecutors and immigration court cases, that was moved to DHS. But the agency that supplies immigration court judges stayed at the Department of Justice. The reason was the person working on this for Tom Ridge was some Harvard guy who didn't realize that immigration courts were a big deal. And so just like didn't look to move them. The other amazing anecdote about this is the White House, apparently 2005, wanted a research lab for the Department of Homeland Security. So they phoned a friend over the Department of Energy, figured out which one they should take. and then according to the Post, did not realize that he had just decided to give the new department a thermonuclear weapons simulator.

Oh, boy. I mean, even like the whole, I even remember at the time thinking that the whole homeland was like a weird word. It felt like a word that, you know, was like had a German root or something, you know, like. And I just, Joe Lieberman, I think, was the guy, like, was the champion. Like, this is like everything about this, you know, is just not worked out. No, no good. Okay. I got that off our chest.

And to get to the original story, like, like, Intel gathering without a lawyer in this country? Bad news. Let's just not do that. Let's not do that ever again. Two stories out of Canada. So the first has to do with China, Ben. On Monday, Canadian Prime Minister Justin Trudeau said he's going to appoint a special investigator to look into allegations of election interference by the Chinese government in Canada's 2021 federal election campaign. First of all, congrats to our friends in Canada for getting your own Mueller probe.

Yeah. The rubound etiatesf p-p. I think that's French for the P-T tape. Here's what happened. The Globe and Mail reported on classified intelligence documents that detailed how the Chinese government interfered in Canadian elections to help Trudeau's liberal party and defeat conservatives who are viewed as critical of China. Chinese officials did this through disinformation campaigns that targeted Chinese immigrants in Canada by giving cash donations to specific political campaigns and by having businesses hire Chinese students and make them volunteer full-time on specific political campaigns. The report quotes a Chinese consular official in Canada saying in July 2021 that, quote, Beijing likes it when the parties in parliament are fighting with each other, whereas if there is a majority,

the party in power can easily implement policies that do not favor the PRC. In other words, China wanted Trudeau's liberal party to be in power, but not with a clean majority so they could not get anything done. Which is what the result was. This is the result. The consul general, Chinese consul general in Vancouver reportedly bragged about beating two conservatives. So, Ben, much like 2016 in Russia, we don't know exactly how much these efforts influenced the election results of at all.

The former leader of the Conservative Party says it cost of eight or nine seats, but who knows, he's self-interested. The questions for the Canadian government are, one, if you spotted this activity, why was no one warned? And two, Trudeau has previously said there was no meddling. Why did you say that? But I do think that you and I, we can get into that, but we should also pause to just consider what an own goal this is by China because their relationship with Canada has been been terrible since 2018 when the Canadians arrested some Huawei officials, right, the center of the U.S.

On our demand. Yeah, actually, right. The U.S. prosecution. So the Chinese arrested some Canadian business people. The two Michaels, actually, including, yeah. Right, right. Yeah, things have gone south ever since. But now there's this, like, interference story, which is going to make the liberal party probably twice as hard on China as they might otherwise have been.

I mean, I can't see how this ends well for the Chinese government. Yeah, there's a few different angles. I mean, the first thing is that like the Chinese clearly do this and they, there have been a lot of stories about them like really getting into like Australian politics. And so they must, there's like a certain size country that the Chinese like to throw their weight around in. It's a Goldilocks thing going on here. Yeah, it's kind of these like, you know, no, I mean, Canada is physically large, but population wise, these medium sized democracies, the Chinese like it's almost like their test driving like their influence campaigns. And that bears watching. The reality of this thing is at this point, I think.

China, Russia are like quote unquote meddling probably in every country's policy. I mean, if it's social media, I don't want to, I'm not diminishing this and I'll get to that in a second, but like this is a fact of life. And that calls for vigilance and calling it out and being transparent about it and all the rest of it. Now in Canada, it's a little, it's, what's interesting here too is that the way they were making use of the kind of diaspora. That's some dangerous shit in there, right? Because what I worry about is if you want to talk about things that have negative knock on effects, imagine if that happened here. There's already a challenge with Chinese Americans and Asian Americans kind of being targeted by people

who think they're taking on like the CCP, right? Right. I worry a lot about if there's a sense that anybody who's like Chinese is a spy. Yeah, the anti-Asian. That's like very bad stuff. So like one of the reasons to be transparent, but it's also to kind of try to not allow for this kind of mass MacArthurist suspicions to take over. So the Canadian government should get in front of this, put information out. I have been kind of watching, like the kind of MAGA flavor of the Canadian right, like just vicious dunks on Trudeau. So excited. Look, I mean, I've been a Trudeau defender on this stuff.

Obviously, he needs to like, if he said that there was no meddling and there was, he used to explain himself. I will say there's a difference between Donald Trump standing up and asking Russia to hack on his opponent and Don Jr. you're taking meetings with Paul Manafort and like Russian agents like this is not apples to apples with the Russian meddling in this election, which is what I see the Canadian right kind of trying to do up there. But this is more like this is part of the landscape for all democracies going forward. We're not going to prevent writ large any Russian and Chinese influence campaigns in our politics. We have to create anybody's and and this is a part of life from the 21st century now. Yeah. Before we move to the sort of Canada story number two,

The Chinese Party Congress is happening right now. And I saw before we came in that Chinese President Xi Jinping said, quote, the Western countries led by the United States have implemented all around containment and suppression on our country, bringing unprecedented severe challenges to our development. It was reported by state media, apparently based off of something Xi said in a private meeting. But like a lot of China watchers are saying, this is far in a way of the most direct criticism of the U.S. by Xi. And then the Chinese foreign minister went even further, saying if the U.S. does not hit the break, but continues to speed down the wrong path.

No amount of guard rails can prevent derailing, and there will surely be conflicts and confrontation who will bear the catastrophic consequences. So very alarming. I'm really glad this is worth pausing for a second here because I remember with Russia, right? Like Putin's rhetoric was getting hotter and hotter and hotter through the Obama years, right?

And he said that he believed that the U.S. overthrew Yanukovych and Ukraine, right? And therefore it was kind of like, you came into our politics. We're coming into your politics in 2016. The point, I make that point because, like, we can say that's crazy and we didn't do that. And that's true. We didn't sponsor a coup in Ukraine. But Putin clearly believed that. If you listen to the Chinese, they believe what Xi Jinping said. Yeah. And so I make that point of they're going to start meddling more in our politics. Like, I just, I don't know why we would think that the Chinese, like, they will tell you what they think. And these Xi Jinping comments speak to a mindset where they think that we are now kind of almost at, at, at one. war with them in a way. And so I would expect more, you know, meddling from China in our politics. Biden's taking some drive-bys. Gee, if you noticed this recently? He was like, like, at one point,

he was like, who would want to be this guy? Like, nobody wants to be Xi Jinping. I'm a little, I would take that down a lot. I don't think attacking him personally, I think that's more likely to invite like an escalation that's not worth it. Well, I mean, I think this sort of the, the, she's point that the U.S. is trying to contain China is not wrong. We say it all the time. Yeah, yeah, yeah. Just look at the rhetoric coming out. Anyway, it's one to watch.

But the other big story and political challenge for Trudeau Bend is immigration. The New York Times reported that in 2022, nearly 40,000 migrants unlawfully crossed the border from the United States to Canada, mostly into Quebec. That was double the 2019 number, and apparently so far in 2023, the numbers are bigger than 2022, so it's getting worse. This is led, you know, just like you were saying earlier, sort of the Maga right, It's led to a surge in anti-immigrant sentiment in Canada and calls for the government to seal the border, especially in Quebec. Biden is supposed to visit Canada later this month. Trudeau says he's going to raise the issue on the visit and wants to renegotiate a treaty from like the early 2000s to try to address the problem in a holistic way. It also comes as there are reports this week that the Biden administration is considering detaining families that unlawfully cross the border.

This isn't family separation like the Trump administration, but it is still a policy that Biden, ended when he took office because he felt it was inhumane. Families instead are released into the U.S. temporarily with sort of like ankle bracelets or ways to track them. The discussions are all happening in anticipation of assertive migration after the expiration of Title 42 authority in May, which is that Trump era rule that allowed immigration officials to expel migrants in the name of public health reasons around the pandemic. Family detention has happened in previous administrations, I think under Bush, Obama and Trump. There have been reports over the years of appalling conditions at these detention facilities because they're just not designed to hold people like this.

But it's also worth pointing out that Trump wanted to hold families indefinitely as a deterrent or hold kids and families as long as possible. But I think that got struck down by the court. So the immigration crisis in the U.S. now is getting so bad that it is seemingly upending or sort of magaifying politics in Canada. Yeah. And I don't know why that wouldn't get worse, right? Because if people, the more people feel like they can't stay here without.

you know, being detained or deported, they'd make a run to that border. And I think you can get, you know, you can cross, you can unlawfully cross, get arrest and get released, and they get health care, other benefits, kids can enroll in school. So it's like a very generous welcoming country. It's like a friendlier place in America. You know, like it's like a lot of migrants in Europe used to try to get up to, you know, some of the northern European countries that then ultimately became hard-ass, frankly. I mean, to me, it just speaks to the need.

Look, if we don't try to have a real conversation in this country about, like, legal immigration policies and legalization of certain people who are here combined with enforcement, like, this is the kind of whackamble that we're going to be playing in terms of the system is broken and it's not going to be fixed by detaining families. It's some point you're going to have to fix it, but that's going to require Congress. There's just not a better answer. For someone thinking, why would you ever detain a family? Here's a scenario where someone could make that argument.

if everyone suddenly knows that if you come to the border as a family, you get released into the U.S. But if you come as an individual, you get expelled. That gives you an incentive right to come as a family. I'm not defending it. I'm just explaining why. I reached out to the White House to sort of get their position on this leak in New York Times. And they said there's no intention of reinstituting a detention system that keeps families in long-term custody for lengthy periods of time.

DHS is preparing to process migrants under Title VIII expedited removal after Title 42 ends. No decision has been made. to whether families in those proceedings will be held temporarily for processing consistent with all legal and health care requirements. So what it sounds like, you know, they're setting up is, you know, you might have families being held for a short period of time. It's like a classic non-denial denial. Yeah.

I mean, what you could tell in that story, though, is it, like, to be fair to the White House, I'm not trying to be glib about it, but just basically they're not denying that this conversation is going on there. But they are saying it's not long term, right? but the point being that clearly people in those meetings decided to leak this to the New York Times or the journal, I guess, whoever had it first, to try to gin up this conversation. But like we've talked about, if you are denying the government like the resources and the legal frameworks and the reforms necessary to manage, what are.

are going to continue to be increasing immigration flows, particularly with climate change. Like, there's just not a good answer to any of this stuff. Yeah, and you've probably got a bunch of people from DHS in these interagency meetings in the situation room at the White House who want a more hawkish hardline position and thus would leak stuff like this. Yeah. Okay, Ben, so big news out of South Korea, where South Korea said they will compensate individuals who were forced to work for Japanese companies between 1910 and 1945 when Korea was

ruled by Imperial Japan. How to compensate these victims of forced labor has been a huge source of tension between South Korea and Japan for decades in finding a resolution as seen as critical to increasing security cooperation between the U.S., Japan, and South Korea, and just, you know, calming things down a little bit generally. Biden welcomed a move very quickly in a statement. In 2018, South Korea's Supreme Court had ordered two Japanese companies to directly compensate workers. Japan refused, which increased tensions further between the two and things have sort of gotten worse at times since. Japan's official position is that this forced labor dispute was settled back in the 1960s when Japan and South Korea signed a treaty and Japan paid like $500 million in grants and loans in restitution. The announcement this week seems like a creative way by South Korea to get victims, some compensation, but maybe get around the fact that Japanese companies refuse to participate in that process.

Perhaps not coincidentally, President Biden is planning to host the South Korean president for a state visit on April 26th, the second of his presidency. You know, the first was? Macron. The French. So, you know, this deal could fall apart, especially since victims, advocacy groups want a lot more. They want an apology from the Japanese government. But it does seem like, if nothing else, a pretty big, risky concession by President Yun and the South Korean government. and maybe it speaks to growing concern from the U.S., from Japan,

and South Korea about the need to deal with North Korea and China and just coordinate more. Well, look, we went through a version of the exact same thing in the later Obama years, which is the issue of comfort women, which is like, you know, applies to basically the Japanese used South Korean women essentially as slaves and at times sex slaves during their, their colonization of Korea,

this issue came up of acknowledgement and compensation. And it really, like, it was the leading issue in the relationship between Japan and South Korea and the U.S. and Japan, South Korea, and there had to be kind of U.S. mediation

of like a similar kind of measure where the Japanese are acknowledging it, providing some compensation, but not nearly as much as what the Korean public wants, right? and they kind of partially implemented. I only make this point that the history between South Korea and Japan is so intense. In South Korea, the grievances have become more acute in recent years,

in part because you have the nationalism that comes with the country kind of coming into its own, but also because the generation of people that experience this have been dying off. And so there has been this idea that, like, you know, before that generation is gone, we want to see, you know, amends made, reparations paid. Understandable. And everybody, I think, in South Korea understands this is not going to be like fabulous wealth. It's more just a symbol of an acknowledgement with an accountability cost to it.

Whereas in Japan, the politics, obviously, or why are we doing this now? Like, what you know, it's what you might imagine. On the surface, though, like, Japan and South Korea should share a lot of interests. They're democracies. They're allied with the United States. They're worried about North Korea. They're worried about Chinese influence. They're worried about Taiwan's trade contingency.

And so the U.S. roles, can we just manage these issues so they don't derail the relationship? And can you guys have a dialogue about the past that allows you to not have present and future cooperation totally screwed up? And look, this will be a muddle. I mean, I think Japan will never do as much as what Korea wants, but, you know, Korea, like, need something. And here we are, you know. Yeah. Hopefully it's the beginning of a process, at least some more sort of durable framework. And just, like, hopefully at some point the discussion around these issues, leads to the building of actual trust.

Because it shouldn't just be the U.S. being like, hey, you're our two allies. You better get along. Right. You want a more genuine reconciliation to take place. And that should be on the Japanese. Like, the Japanese should try to go that extra mile to indicate that they are hearing and listening and understanding why this matters so much of the Koreans, even if they're not going to be able to kind of pay the highest amount of reparations that are being demanded.

Yeah. A couple more things before we get to Ben's interview. So first we just talk about Ukraine. The big ongoing battle is this battle for the city of Bakhmut. The BBC reported that Western officials believe that up to 30,000 Russian troops have been killed or wounded in that battle in the last six months, in that one battle. Ukraine is also undoubtedly taking horrific casualties. But military experts believe that the Ukrainian military hasn't retreated yet from Bakhmut,

which is not some incredibly important strategic city because they believe that Russia has continued expenditure of manpower and ammunition will ultimately benefit the Ukrainian side. So grim, grim stuff. The fighting on the Russian side, as we've talked about, has been led by the Wagner mercenary group. Its leader, Ygevni Progozin, has been publicly complaining that his fighters are running out of ammunition. That has not stopped him from sending wave after wave of, you know, essentially unarmed men who don't have training or bulletproof vests, sort of like at the front. But then on the diplomatic front, we have talked about how claims that sort of the world is United against Russia have been way overstated. And it's really sort of the U.S. and Europe on one

side and that a bunch of other countries sort of on the fence or kind of like skeptical of U.S. sanctions on the other side. But judging by this clip of Russian foreign minister Sergei Lavrov at a conference in India, it doesn't mean that other countries or other people are necessarily buying Russia's spin. Here's a clip. The war which we are trying to stop and which was launched against us using the Ukraine. Ukrainian people, of course it influenced, influenced the policy of Russia. So it's Lavrov saying the war was launched against Russia and an audience of, I guess, Indian businessmen laughing in his face. Do you think that's the reaction he was hoping for here?

No, no. I mean, it's a good point, which is that, like, the global South, like, they're not signed up to, like, our, like, kind of crusading view of this war, say. sanction, but that doesn't mean that they're buying the Russian spin, you know, either. Like, they're just kind of like, just leave us alone. Like, come on, guys. We don't want to hear your bullshit Lavrov. But, you know what? We also don't want to, like, participate in your sanctions, Americans, you know.

And I'm not saying there's an equivalence between those things, but that is the reality. And it's good to see Live Rob humiliated, you know, on occasion. It really is. He's such a pompous asshole. Yeah, and he just, that man can lie, you know, with, like, an absolute poker face. I mean, you could put anything in front of them. You could put, actually, like, you could do one of your chatbot exercises. I would believe anything that Lavrov says in a bot because the guy would say anything.

Oh, Ben, I'm glad you brought up my artificial intelligence deep fake voice hobby because there was an interesting article in The Intercept about how this reporter found a federal contact document that showed the U.S. Special Forces Operations Command looking to use deepfakes for global disinformation campaigns. So this is probably happening as we speak. Yeah, and we just talked about China meddling in elections. Like, you think we're not going to be hearing a little deep fake action on behalf of Beijing. Yeah, CIA is probably having a lot of fun with this, too. Before we move on to two lighter things, what the hell is happening in Georgia, the country right now? So, yeah, just like today, like they're the huge protests. Basically, you have the kind of parliamentary majority there trying to ram through this law that is very Russian.

Like, it's basically like designating NGOs and civil society. He's like foreign agents. So this is like an old Putin playbook, Orban playbook. But it's kind of seen as a proxy for, because the EU that Georgia wants, the Georgian liberals want to draw closer to doesn't like laws like this. So the people in the streets, you see European flags. You see people who are trying to stand up to what they see as a kind of Russian slash autocratic direction being taken by this party, Georgian dream. The president of Georgia is actually not on board with this law. So it's split.

I highlight it only because Georgia is a country that is right on the fault line, right? Obviously, Russian influence and Western influence. And the people there, I think genuinely the majority of them would like to be drawing closer to Europe, like the majority in Ukraine was. You've got Russia occupying two chunks of Georgia. You know, I think it was inevitable that these debates and the war in Ukraine is going to continue to reverberate in Georgia. We should just keep an eye on it. Definitely. definitely, in a place that sort of felt the sting of Russian tanks rolling into their territory.

And it's right on that fault line between Russian influence and Western influence. Yeah. Two sillier things. So slot this one, this article under sort of relationship goals. So there's a woman who's being described in all these stories only as a former Mexican beauty queen and her partner stole 45 bottles of wine, valued at over $1.7 million and were finally captured after a nine-month manhunt. None of this reporting says their full names. for some reason. They just call them Tatiana and Estanislo, which makes it cooler, to be honest. But so, okay, apparently these two,

they check into like a Michelin-starred fancy hotel. They ate a 14-course meal, asked for a tour of the wine cellar, and then went up to their room. And then at 2 a.m., this woman calls down and orders a salad, and there's, like, one guy on duty. So the guy goes up to take the salad, the boyfriend or accomplice or whatever,

sneaks down, steals the key card, tries to break into the wine cellar. He stole the wrong key card. So she orders a dessert up. The guy goes again, he steals the right key card this time. So they go down, they raid the wine cellar. They get a 19th century vintage worth 350,000 pounds. And then they left the hotel before dawn,

and we're finally arrested nine months later, crossing from Montenegro into Croatia. I wonder, do they drink any of this wine? This is what we have to find out. Because I'm curious what a $350,000 vintage it tastes like. I'm curious about leaving that just like hanging around the wine cellar. They put in their backpacks. You don't have like a better.

like, you know, safe system with like lasers. Yeah. Why would the room service guy have a key card that would allow him access to this? That's what I'm saying. Like, it just feels like a pretty casual to, you know, be dealing with that degree. I mean, I like a good wine as much as the next guy, like, you know, a friend of the pod might got leave. But I, that, that price point is a little high for me. That price point is really high.

And if you're talking about a 19th century vintage, isn't there a decent chance that it is just going to be vinegar? What if you get the 350,000 pound bottle wine that's the 19th century vintage and then you open it and it tastes like vinegar? What do you do? You're just screwed. You're just screwed. You can't really like insure that, right? No. Buy some artwork or something. Yeah. Okay, Ben, last thing. So a friend flag from me this morning, they were watching MSNBC as one does. Watching a little morning, Joe, as one does. He's in D.C. They were broadcasting from the International Women's Summit in the UAE sponsored by Forbes. So some sort of like Forbes conference. And I just wanted to pause and just to think for myself, like, where does this rank on these sort of corporate cynicism scale? Because UAE is in Saudi Arabia when it comes to women's rights and the treatment of women. It's, you know, far from it.

But women and men do not have equal rights when it comes to getting married. Women need a guardian's permission. Men can unilaterally get divorced. Women cannot. Women only inherit half as much money as their male relatives. There was also this weird, weird case where the ruler of, of Dubai, Sheikh Mohammed, his daughter was forcibly adducted and returned to the country, right? I imagine this is not a topic at this summit.

It's like, I'm just trying to figure out what, you know, I think I know why this summit was in the UAE, which is they have bags of cash to throw around to companies like Forbes and other, you know, speakers and things. But where we land on the corporate cynicism chart? I think it's really high. Like, we talk about sports washing and other, this is just a other version of reputation. Conference washing. This is conference washing. And the Amarades have always been at the forefront of conference washing and kind of just DC washing in general. They sponsor all kinds of stuff.

You know, I'll give me an example of when I was like a part of this, right, which I felt like a little gross about after the fact, which was, do you remember when the counter ISIS campaign began? Mm-hmm. And it was a big deal that some Arab nations were going to participate in airstrikes against ISIS, right? And so I was obviously like, you know, highlighting that. Now, the UAE had like a, I think one of the first planes had a female fighter pilot, right? And they were very savvy about, like, putting out that there's a woman fighter pilot bombing ISIS. Great story. She made the rounds on cable TV, you know.

I don't think she flew any other missions. I don't think they had any other women in the, you know, like this. So they're very good at like, look, they're better than Saudi Arabia, but like the point I would make is if this was genuinely about these issues, why are. are we not discussing all the things you just said? Like, is this conference addressing the kind of role and rights and, you know, equality of women in the UAE? Or is it just a bunch of gauzy speeches about women and girls being equal, like, that could have, you know, that are cookie cutter, that ignore the reality that this is happening in a part of the world where that is not at all the lived reality? Yeah, I mean, I think the sort of like the version of this we've talked,

about is that the UAE is going to host the COP28 climate summit. Yeah, yeah. And that feels also particularly odd. No, and someone said to me, like, you know, well, you know, I was critical the oral executive who's hosting the summit for the U.E. But isn't it good that the U.A wants to do that? Well, yeah, but are they really doing it? Yeah, the head of their state oil company serves as their climate envoy.

Yeah, I would like nothing more than, but like then, okay, then let's see the U.E announced some significant changes in like the way in which women are treated in their country instead of just being like trying to show that they can buy any conference and have it in, you know, in Abu Dhabi or Dubai. Yeah. And look, I was reading up on this from Human Rights Watch. It does seem like they've passed some reforms in the last few years. I think as always there's a real question about how well they're being implemented.

You know, what you can change sort of the laws, but that doesn't mean that the judges are always going to follow them or pass down sort of more lenient sentences or et cetera. So, you know, just keep your cynicism radar up. Yeah. And what are the conditions like for women, foreign women domestic workers in the U.A? That might be something, a question for people to ask. You know, what happens to people go to work in the U.E and their passports get taken away or something? You know, like these things happen.

We should talk about them. I hope, I hope morning, Joe, has a great week. In the same way that if the U.S. hosted a conference on women, we would talk about things like equal pay and abortion rights. Right. I'm not, so like we're not in a glass house here, but I would like to think that if that conference is here, that there would be some inward looking conversations. My guess is that's probably not going to be the case. Yeah, that would be my guess too. Okay, we are going to take a quick break and we come back. You'll hear Ben's interview with Wali Adiyama. So stick around for that. Okay, we are very pleased to welcome back in studio again by popular demand. The deputy secretary, Treasury secretary, Wally Adayama. Wally, thanks so much for being here again. Thanks for having me. It's going to be back.

So just to start, we're talking as interesting, what brings you to this area again? So one of the things that I do, in addition to all the work on Russia-Ukraine, is the distribution of American Rescue Plan funds. We give a historic amount to tribal communities in this country, $30 billion. And I was visiting. It's a huge amount of money. Yeah. It's more than we've ever given in U.S. history to this community that, as you know well, we've underinvested in. Yeah.

So I came out to visit two of them. in California and get a chance to see how they're using those resources and to talk about what we can do going forward to help them as they try and build out their communities. That's great. I mean, it's something that probably hasn't got all attention but should. Well, look, we want to talk about like a harder-edged matters here. And just for starters, last time you're here, we really broke down different pieces of the Russia sanctions regime. We're one year into this conflict. We were talking about this on a recent episode. Some things have worked.

Some things have not worked as well. What is your assessment of the sanctions a year in? What do you see as the bright spots and where do you see more work needing to be done? So I think from our standpoint, one of the bright spots has been preventing the Kremlin from taking the money they have to buy the weapons they need. The wars went far worse than the Kremlin expected. They've lost 9,000 pieces of military equipment in Ukraine, and they're having real trouble rebuilding their military, getting, a hold of ammunition, repairing their tanks. And in part, that's due to our sanctions and export controls because they can't get the goods they need from foreign countries. They don't have the

money to go out and purchase ammunition from their normal suppliers. And we're continuing to do that because of the lessons we learned from COVID. Everyone here complained about supply chains. And what we did was we said, well, if supply chains is an issue for us, how do we make Russia's supply chain issues even worse? And we're just going after keynotes in their supply chain and making it hard for them to get access to things. So it's making hard for them to build the weapons they need to fight the war in Ukraine. So that's gone well. So just to stop on this, because part of what we want to do here today also is kind of give people, I probably throw around in terms of export controls all the time on this podcast without giving it the context.

What is an example of an input to like the Russian economy that is useful for their military that they can't get and how to explain to people how that works? How do you stop them from getting a particular input that they need for their military machine? So a good example is just semiconductors, which we knew for a long time was key to our cars. We couldn't get cars off the lot as people remember because we didn't have no semiconductors. Well, Russia needs very advanced semiconductors for their precision missiles. And they can only buy those semiconductors from certain countries because they're only made by countries like the United States, Taiwan, South Korea.

China does not make these advanced semiconductors. So by saying that you can't sell those semiconductors to Russia, it prevents them from being able to build these precision missiles. And these are all countries, because we'll get to some of the people you're trying to lean on. But these are all people that are on board with the section. So when you guys put out, hey, none of these advanced semiconductors, Russia, those people are cooperating. Yeah, and I think we'll get to this. But the thing we're trying to do now is prevent other countries from buying the semiconductors from us

and then in some way shipping them to Russia through third countries. So that's a big piece of what we're doing now. is because what we know is that Russia has tasked their intelligence services with trying to find ways to get around our sanctions because they're hurting their ability to build out the military industrialized complex that they need. I think the second place we've been focused on where I think there's more work to be done is reducing Russia's revenues. Fundamentally, Russia is a commodity's exporter.

They sell oil to finance their economy. And the perverse thing that happened was because of their war on Ukraine, you saw prices for energy go up, which meant that them selling oil was bringing them more money because of the war that they had launched in Ukraine. So a big piece of what we've been doing is finding ways to reduce the amount of money they're earning from selling oil. The price cap's been a big piece of this. We're already starting to see the impact of that on their budget as the state has been forced to borrow from and take money from their reserves to finance the economy because energy revenues have dropped significantly over the last two months since we put in place the price cap.

Yeah, and here's another one where we've talked about the price cap, but why don't you explain just like, because people, you know, look at this and they're like, well, how can we set a cap on prices that other nations are using to buy? Like, how does that all work? And again, it comes down to supply chains. Yeah. And the truth is that for the transportation of seaborne oil, most of the companies are involved in this, the people who own the ships, the people who provide the insurance come from countries like the United States, the UK, and Europe. So what we're doing is we're not actually capping. all of Russian oil. What we're saying is that for Russian oil to use American, European, Japanese supply chains, they can't sell oil for over $60. So what that's meant is that it's basically put a cap on their ability to use our services to sell their oil, and they're trying to find alternatives. I was going to say how much is, because actually I don't know the answer to this, of like what percent or how much of the global energy market depends on our team, essentially, on supply chain issues.

The best place to think about this is on insurance. 90% of insurance for global oil shipment goes through a G7 provider. So what Rush is trying to do is build up their own insurance industry. They had to transfer billions of dollars from their central bank to set up their own reinsurance company. And the way we think about this is by spending money on setting up their reinsurance company, that's money they can't spend on buying tanks. By spending money on buying tankers, that's money they can't spend on buying.

missiles. So fundamentally, they're both getting less money from selling oil within our ecosystem, and they're forced to spend money to build their own ecosystem, which they're going to use to try and sell oil going forward. But the central bank and the finance ministry reported that oil revenues for the month of December were down 46 percent after we put in place the price gap. And our goal is to try and bring down that revenue even more over time, because that's the best way to starve their economy, the money to prop up the economy, and also to finance the war in Ukraine. Okay, so we've got, and there's like nerd fun places to dig on each of these areas, but so far we've got the denying them the inputs to their military industrial complex. We've got trying to deny them the revenue chiefly from energy, which is their principal source of revenue. Then we have oligarchs, right? How's that going? Like it seems like the, you know, obviously those guys are now stuck in Russia instead of kind of being able to operate globally. Some of them had a bunch of stuff seized right out of the gate. They lost.

lost their yachts, but they lost other assets. But I imagine that some of them are, they're trying to move money around, they're trying to wash money in the Emirates or, you know, they're putting money in Israel or other places. Like, how would you assess the state of the effort to go after some of these big, and these are people with a lot of resources that could help the state, so it's not just, you know, shooting fish in a barrel. It's actually tied to the war effort. How's that going?

Yeah, and I think it's both tied to the war effort, but it's also tied directly to the Kremlin and Putin because, as you know, Putin doesn't have a bank account. He has these guys. They buy the things he needs and he wants for his personal life and also to support the Kremlin. So going after them is a way of going after his personal wealth. And our sense is that we've been more effective at doing that than we had been previously because it's not just the United States is putting sanctions on them, but the Europeans and the UK. The thing about wealthy people is they want their money to be in places where they can move it quite easily. And those places are, are basically the G7 economies because we have the most convertible currencies.

So we've had success, but the thing that we've learned about each one of them is they're very good at trying to evade not just our sanctions, but Russian taxes. So they have found ways to move money around the world. And to a degree, it is what we've got to do is continue to build out our coalition because if they can't put the money in the UK, they're going to try and move the money to an island. And we're playing a very active game here of trying to understand who's facilitating the movement of that money. Because what we've discovered is that if you're facilitating the movement of money for one rich Russian oligarch, you're probably doing it for five. So by going after these facilitators, we've been very effective in trapping money in jurisdictions.

And then our goal is to try and freeze that money in order to put ourselves in a position to ultimately hopefully use some of that money to benefit the people of Ukraine. Okay, so I think we've got a good overview of like the work lines of effort, as we once used to say in endless meetings. Do people still say that? We still say that. We still have endless meetings. So going back to the inputs, one thing that obviously is much in the news today is the warnings that are being issued to China and not backfill Russia. How much does that connect to China could try to make the good? You mentioned that they couldn't supply advanced semiconductors.

They don't manufacture the ones that are high caliber as Taiwan or the U.S. But how much is what people are worried about, not just kind of like ammunition, but how much could China potentially try to fill some of the gaps that have been created by our export control? They could try and do a lot. One of the things that we've been encouraged by to date is they've done far less than people expected. I think that's because Chinese firms and individuals are worried about being. sanctioned and having export controls put on them. The way we think about this is ultimately, Russia's economy is about a $1.5 trillion economy. The combined economies of the countries that have

put in place this regime is about 50% of the global economy. So the thing we're trying to do for companies and individuals in China, but in the UAE and in countries around Russia is to make very clear to them that you face the risk if you do things that provide material support to Russia of losing access to a far larger market. And we think that's the thing that is so far prevented people from taking these actions that could further build up Russia's military industrialized complex. So even if Chinese foreign policy might be sure, like we backfill a bunch of stuff for their military industrial complex, the entities that would have to do that know that

they might get sanctioned and it's just not worth it to them. Is that a fair? Yeah, that's the choice. They have a choice to make. They can support Russia, which is a small economy that's getting smaller because of our actions, or you can continue to have access to doing business with companies and individuals in countries that represent 50% of the global economy. For most firms and most individuals, it's a clear logical choice, even if your government's

creating a permissive structure for you to do it. And what if, and I don't know if this is ahead of like a decision-making, but like if the Chinese government or the PLA starts to provide weapons and ammo, or is there a sanctions response to that that is focused on, you know, the government? I imagine that's obviously more sensitive than just some cutout entity. But like if the PLA is doing that, does that open up a new aperture for potential sanctions on China? So I think our view has been, and we've made very clear to all countries in the world, that if a country, an individual, or a company provides material support to China, we're going to hold them accountable.

And it's not just the United States. And I think this is what matters to a number of countries. It's also the European Union, where a country like China has significant economic relationships. We're all committed within the G7 plus the European Union to taking actions to hold you accountable. I think that's partially why you haven't seen a lot of the wholesale, not only in places like China, but in other countries around the world, of provision of material support to Russia. In addition to the fact that, as you know, one of the things that China has made very clear is that they believe deeply in respecting sovereignty. Believe in a bunch of the principles that Russia is actually violating. And while I think that the principles they put out around peace settlement don't reflect the views of Ukraine because they haven't spoken to Ukraine in a real way, I think that ultimately it's not in China's self-interest to be seen as supporting Russia in a material way.

Yeah. No, there's a lot for them to think about because, as you said, I could enumerate some geopolitical reasons they'd want to support Russia, bogging us down, you know, depleting our stocks and I go to Taiwan. but it's not without economic risk for them is what we're hearing from the deputy treasury secretary. Okay, on the energy issues, you know, part of what is we've seen this kind of really truly historic movement from Europe away from Russian oil and gas, but we've also seen China, India, as other countries continue to buy, in some cases, increased their purchases of Russian energy. You've talked, I think it's a good visual for people to think about also how Russia wants to create these kind of end runs around sanctions, probably through. countries like that. Secretary Yellen was just at the G20. You could kind of sense some bad vibes there

and some pretty tough conversations. What is the state of the effort to try to get non-U.S. and European and say Japan, Australia, but non-countries that are not already fully on board to just be doing more. They may not do as much as we'd like. They may not stop buying Russian oil. But like, what is the ask at Secretary Yellen and you are of other countries when it comes to both not, you know, kind of making Russia a whole by buying more energy and not kind of helping them circumvent a sanctions regime. Yeah, and I think in addition to the G20 trip, a key thing Secretary Ellen did was she went on a trip to Africa to visit African countries because I think ultimately the truth is

outside of Ukraine, the countries that are feeling the impact of Russia's war on Ukraine the most are countries in the developing world. You look at Egypt. Is it food or? It's food and its energy. Because when you think about Egypt, Egypt had to go to the IMF because they used to buy a bunch of their grain from Ukraine. And when Russia invaded and cut off the ability for them to get grain, the cost went up significantly. All of a sudden, Egypt needs to go to the IMF to get assistance.

And this is a story that you can say throughout Africa and throughout Latin America, they've seen huge increases in food costs. And even here in the United States, people often think about this war in Ukraine being far away from us. But when you think about the fact that you were paying more for gas today than you were before the invasion, that when you go to the store, food costs more than it did before the invasion. That's because of Russia's invasion of Ukraine. And I think the thing you saw at the G20 this time was Russia and China being isolated when it came to the chair statement. The Indians made very clear that the rest of the 18 countries all agreed on language. It was very tough in terms of saying that Russia's invasion of Ukraine needed to end. And our goal, frankly, is to make very clear to these countries from an economic standpoint that your economic interest are aligned with Russia's invasion of Ukraine ending as soon as possible.

That's one of the benefits of the price cap. It fundamentally plays to everybody's economic interest. Ultimately, India, China, developing countries, regardless of what they've taken aside, they want to pay less for energy. And they want to pay Russia less for energy. That's why Russia is in such a bind here when it comes to the price cap. It's not just that the West is telling them you can't. get more than $60 a barrel. It's now that India, other countries are saying, well, we want to negotiate an even lower price because our economies are struggling because of the war you started

in Ukraine. So our goal here is both diplomatically to make this case to these countries, but also to give them options that demonstrate the ability that we're trying to do everything we can to reduce the costs that they're facing due to this war, and they should be asking Russia to do the same. It seems like that's had mixed results. So like, because you'll hear from there, You know, actually, you know, we don't want to be a part of this war. Don't ask us to take a side. Or you'll hear versions of Russian propaganda. You guys push them into it with all your NATO expansion or whatever the line is.

Or you'll hear it's actually your sanctions, not the war that's causing these problems. I mean, how hard is it to try to get across the culpability for this on Russia's shoulders in places like Africa? Because I hear a variety of views from people there. You are totally right. The disinformation is real. And I think one of the things the president, the vice president, been focused on is that we've just got to be engaged in these countries on a regular basis. That's part of why the secretary went. That's why a number of cabinet officials are going. I'm going to go in March myself to go have to go have direct conversations with them. And ultimately, the thing that each one of these countries have is they have budgets. Where are you going to go? I'm curious. I'm going to do a trip to Ghana, go to Nigeria, and then probably go somewhere in East Africa as well. Yeah. They do have budgets. Yeah.

I mentioned Nigeria will be interesting politically at this moment too. Okay, so you know, there's a big developing world push diplomatically that is evident and comes back into the G20. Then there's like, you know, we're pretty hard on the Emirates in this podcast, you know, for a lot of reasons. But it does feel like there are, you know, it's one thing when you're talking about. kind of Wild West Island states, right? Like, you know, some guys have cut off, cutouts in the Seychelles or whatever. But the Emirates is like a major financial hub of the global economy. And it just kind of feels a bit like Wild West there, too.

It feels like, you know, everything from like, you know, Russian oligarchs living in fancy hotels to kind of money passing through there. What kind of conversations do you have in a, and I'm singling them that I could probably name a whole bunch of other places where there's been probably too much tolerance. for for Russian money washing through. But what's your kind of message if you turn up in an Abu Dhabi or Dubai about like, okay, because their economy is probably doing well. It's probably helped, right, by all this money kind of offshoring there. What's your ask and what's your message there? And what do you hear back?

So my ask to the Emirates, but also to a number of these other countries, is the you take steps to prevent Russia illicit financial flows from flowing through your country. And part of that is making sure that you don't create a permissive environment in general for oligarchs and for other Russian money to flow through. For example, we sanctioned as part of a package a few weeks ago a Russian financial institution that set up a branch in the UAE. And the idea that that was happening is something that we think doesn't make sense from the standpoint of the Emirates. Because fundamentally, the reason they've become. such a successful financial hub is that they've taken seriously things like preventing illicit finance.

The more they permit Russian individuals and Russian finance to flow through that country, what I'm telling them is you put at risk the good reputation that you've built in the Emirates and that not only are we going to be willing to take actions like the one we've already taken, but our financial institutions, our businesses that are making the Emirates a hub, are going to be to rethink those decisions. And it's not just the United States, It's just a few weeks ago. We did a trip with the UK and the EU passing along the message that you don't only risk the ability for U.S. firms to feel like the amortes a home that they want, but firms in Europe and in the UK as well. And the thing that we're doing now is we've had a lot of conversations with the governments.

We're going directly to businesses and making very clear to them that we're going to take actions against you if you don't make sure that you're protecting your system against allowing Russia illicit finance to flow through it. And so just wrapping up on one or two things, because this has been such a good tour of this, the first one is, again, making, you know, we get a sense of you. You're like the man playing the whackamol here. Like you put these regime in place. You squeeze the Russians and you kind of go around and try to keep holes from popping up. You know, the Russians are trying to break the sanctions regime or move this money here. But I think what we don't see are all the people, you know, who are doing this.

Like, tell people who's doing this work, you know. Who are the Young Sung Heroes that are out there trying to figure out where the Russian money's going or what tanker they're trying to reflag? I mean, this takes human beings, right? Yeah. No, thank you for asking about them because, as you know, the national security apparatus is run by dedicated career staff who do this work day in and day out. People like Andrea Gaki. Oh, love Andrew Gagg. Yeah, who's been at OFAC for since we were in the Obama administration, but even before that, leading a team at OFAC that's made up of hundreds of talented people who are working.

in late nights and early mornings. And that's true throughout the U.S. government, but also in the UK and in the EU. But people like OFAC, people at BIS at commerce. And I think unsung story is about how commerce has shown up through this in terms of export controls. When we went after Russia in 2014 in Crimea, it was mostly sanctions and they were limited. We didn't do much with export controls. But I think that over the last few years, we've used those tools and ways to constrain Russia that, frankly, we just haven't in the past. So career officials throughout Treasury, Commerce Department, and in other departments have played big roles through this. And so the last question I'm going to ask you, which is, again, more of a challenging question,

but look, I've been, I'm very supportive of everything you've talked about with regard to Russia. I've been somewhat critical in the past about the overuse of sanctions as a tool. You mentioned Andrea. Ask her about the trip we took to Cuba once because it was a great story. but that was a case of trying to actually unwind some sanctions. That was my impulse. Andrea is just a career person. I'm not trying to get her in trouble. But like, point being is that some of these other countries are like, okay, you know, you got Iran sanctions, you got Cuba sanctions, you've got Sudan sanctions, you've got some China sanctions.

You've had Russia sanctions since before the war. You're designating these people here and there. And you're just overusing this tool. We're tired of it. We're tired of, you know, firms are tired of having risk compliance officers. Whole countries are just tired of, like, being told they can't let some people travel someplace. Is it harder to do something?

Like, is there a boy who cried wolf type thing where here's the Russia sanctions? This is when sanctions are needed, right, to stop this barbaric war. Is there a problem where the past overuse of sanctions makes it harder to get countries because they have some fatigue with this tool. So I appreciate you saying that because I think oftentimes the people who design these economic tools are making that case that we may overuse this, but people in the foreign policy establishment

because they love it, yeah, yeah. Yeah, they want to use it because you don't want to use military force. It's a way of doing something. Yeah, it's a way of doing something without having to use military force. But I do think you're right, it comes at a cost, both an economic cost to the fact that when you see derisking in countries and places like Latin America and Africa due to sanctions, That comes at cost in terms of people being able to get access to the things that they need.

At the beginning of the administration, Secretary Yellen asked me to do a review of sanctions. And some of the things that we found was like the way to make them work better going forward is to do a few things we've done in the Russia context. Be clear about what's our foreign policy objective here. And here in the Russia context, we have two of them. One, stop him from using the money he has to get the weapons he needs and two, to reduce his revenues. You never hear us say that we want to hurt the people of Russia who are. innocently being taken advantage of by this regime. And then the second thing is try to

make them multinational. Because when you make them multinational, it to some degree means that you're making a decision here that is not just the United States but with our allies and partners. And it both makes them more effective, but also constrains you in a way that is useful in making sure that they're not overused. And then the third one is always make sure they're reversible. Like what is the behavior you're actually trying to change? Yeah. And if that behavior changes, how do you turn these things off. So I do think that one of the things we have to be careful about is the overuse of sanctions. The best way to make sure that doesn't happen is to have a clear criteria about when they're

going to be used and when they're not going to be used. And I think it's going to require the foreign policy establishment to agree that this is something that we have to constrain with the criteria that not only we understand, but we explain to the rest of the world. Yeah, it's such a good point because just, you know, the countries where I interrelated, like Cuba or Myanmar or Iran, whatever you think of those governments, most often the sanctions had been put in place for some other reason and were being kept in place for other reasons. And then there are other countries where it's just censored like once a U.S. sanctions put in place, like they never go away either. So these are important points and a good reminder that it's not like you guys

at Treasury making this call independently. It's the foreign policy makers of successive administrations. Well, look, thanks so much for this. This is super helpful. We appreciate the work that you and all the folks of Treasury do that doesn't get enough tension. So glad to talk to here today. Always great to be here. Thanks for having us. Thanks again to Wally for joining the show. Do you have anyone else to thank? Thanks to my mom for coming to visit. Yeah, thanks to your mom for visiting. Very grateful. She can be here for a few days hanging out with the baby. It's actually a pretty cool thing when your mom meets your kid. It's a very cool thing. And Lizette's like three months now. So she's like a little more sturdy, she's starting to smile, not just because she's

farting. Yeah. It's great. The parting is, I mean, it makes you very happy when you're three months old. You're thrilled. Yeah. They love that. Yeah. It's about all they do. Okay.

That's it for today. See you guys later. See you. Pate of the World is a crooked media production. Our executive producers are me, Tommy Vitor, Ben Rhodes, and Michael Martinez. Our producer is Haley Muse. Our associate producer is Ashley Mizzuo. It's mixed and edited by Andrew Chadwick, Kyle Seaglin, Charlotte Landis, and Deceles Futopoulos are our sound engineers.

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