(This story will pop up in the local media any day now….)

NYT: U.S. Approved Business With Blacklisted Nations

Several … American businesses were permitted to deal with foreign companies believed to be involved in terrorism or weapons proliferation. In one such case, involving equipment bought by a medical waste disposal plant in Hawaii, the government was preparing to deny the license until an influential politician intervened. (And who might that be?  See next item….)

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NYT: Hawaii Medical Vitrification

This license involved a medical-waste disposal plant in Honolulu called Hawaii Medical Vitrification. On July 28, 2003, the plant’s owner, Samuel Liu, ordered 200 graphite electrodes from a Chinese government-owned company, China Precision Machinery Import Export Corporation. In an interview, Mr. Liu said he had chosen the company because the electrodes available in the United States were harder to find and more expensive. 

Two days later, the Bush administration barred American citizens from doing business with the Chinese company, which had already been penalized repeatedly for providing missile technology to Pakistan and Iran.

By the time Customs seized the electrodes on Nov. 5, waste was piling up in the sun. Nor did prospects look good for Mr. Liu’s application to the licensing office seeking to do an end run around the sanctions. On Nov. 21, a State Department official, Ralph Palmiero, recommended that the agency deny the request since the sanctions explicitly mandated the "termination of existing contracts" like Mr. Liu’s. "The penalties are clear in this case," Mr. Palmiero wrote, "and the responsibility rests with OFAC to implement the import ban."

That is when Senator Daniel K. Inouye’s office stepped in. While his electrodes were at sea, Mr. Liu had made his first political contribution ever, giving the senator’s campaign $2,000. Mr. Liu says the timing was coincidental, that he was simply feeling more politically inclined. Records show that an Inouye aide called the licensing office on Mr. Liu’s behalf the same day that Mr. Palmiero recommended denying the application. The senator himself wrote two days later.

Mr. Inouye’s spokesman, Peter Boylan, said the contribution had "no impact whatsoever" on the senator’s actions, which he said were motivated solely by concern for the community’s health and welfare. The pressure appears to have worked. The following day, the licensing office’s director at the time asked the State Department to reconsider in an e-mail that prominently noted the senator’s interest. A few days later, the State Department found that the purchase qualified for a special “medical and humanitarian” exception. The license was issued Dec. 10.

Two months later, Mr. Liu sent the senator another $2,000 contribution, the maximum allowable. Treasury Under Secretary Stuart Levey said he could not comment on the details of a decision predating his tenure. But he noted that sanctions against the Chinese company had since been toughened, and added, “Certainly this transaction wouldn’t be authorized today.”

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HA:  Medical waste site worries legislative task force  12-12-2003

HI DoH:   HAWAII MEDICAL VITRIFICATION SUBJECT TO ENFORCEMENT ACTION  5-28-2004