The case of Banco Delta Asia still sends shivers down the spines of regional bankers - particularly as a new financial crackdown on North Korea looms. And the face of that fear is Stuart Levey, the US Treasury Department official who led the charge against the privately held Macau bank in 2005. When Mr Levey, the department's undersecretary for terrorism and financial intelligence, issued a statement in September 2005 declaring that Banco Delta Asia (BDA) was a 'willing pawn' in three decades of North Korean money-laundering, public reaction was swift. Panicked account holders rushed to tellers to withdraw more than US$130 million in a single trading day, forcing Macau government receivers to take control of the institution. A further US$23 million in 50-odd accounts linked to Pyongyang was indefinitely frozen. Less visible was all the movement behind the scenes. Mr Levey's action under the USA Patriot Act was backed by a vast intelligence-gathering operation that not only scrutinised hundreds of thousands of pages of records but tapped internal bank communications. He and his team also travelled to the region, making sure that bankers in institutions large and small got the message: you dabble with North Korea at your peril. 'For smaller banks in emerging markets, it was simply terrifying,' said a Hong Kong-based banker. 'One day you could be preparing to list, getting all your ducks in a row and courting the attentions of the big guys. The next, you could be public enemy No1 and untouchable, and have all the assets of US surveillance trained on you.' Both inside and outside the administration of then-president George W. Bush, it was controversial stuff. Hardline neo-conservatives believed they had found a way to squeeze North Korea. More diplomatic types feared the tough law-enforcement action would scupper broader regional efforts to talk Pyongyang out of its nuclear programme. Indeed, the regime soon pulled out of negotiations, and just over a year later it tested its first nuclear bomb. But unfreezing the BDA accounts became a key bargaining chip in getting Pyongyang back to the table with not just the US but China, Russia, Japan and South Korea. For all his hawkish Republican instincts, Mr Levey looks set to be a useful attack dog for the new pro-engagement regime of US President Barack Obama as he girds for his own diplomatic battle with the hermit state of Kim Jong-il. In an unusual and little-noticed move, Mr Obama has kept Mr Levey on. Dennis Wilder, a North Korea analyst at independent Washington think-tank the Brookings Institution, said it was the best move Mr Obama could have made. 'Stuart Levey is the one who really understands international banking and how it can be used as a really phenomenal tool to exert pressure,' said Mr Wilder. 'He's the perfect guy to have in place right now.' In the wake of North Korea's latest nuclear test three weeks ago, the hunt is back on for a new BDA - and Mr Levey has already visited Beijing, Tokyo and Seoul to seek co-operation and firm enforcement. North Korea is apparently no longer putting all its financial eggs in one basket as it did with the Macau institution, but spreading them around. Small banks in China - and perhaps Hong Kong - as well as Russia and Switzerland could all find themselves under scrutiny. UN Security Council sanctions soon to be implemented are almost certain to broaden the range of North Korean commercial and military trading that can be considered illicit. Washington is pushing hard for firm enforcement this time around - and that is where Mr Levey comes in. While diplomats work to ensure Beijing's assistance, Mr Levey is seeking the evidence to ensure any case put to China is watertight and cannot be dismissed and ignored. He is used to getting his way. A Harvard-trained lawyer, he joined Mr Bush's Justice Department in 2001 after years in private practice in Washington, and served in various positions in the attorney general's office before being selected to lead the financial fight against terrorism in 2004. 'He is a formidable opponent,' a veteran of internal Bush administration debates said. 'He'll destroy you with facts and reason, and he can be very, very persuasive.' Not surprisingly, he was hand-picked by Republican veterans to help in the epic back-room fight over the Florida recount in the disputed 2000 election. Mr Bush's legal team out-argued and outmanoeuvred the campaign of the Democratic contender, then vice-president Al Gore, to deliver the White House to the Texas governor. While he's now fighting Iran's nuclear ambitions with similar tools to those used against North Korea, it is BDA that he describes publicly and privately as the greatest proof of the power of financial enforcement. 'The result has been North Korea's virtual isolation from the global financial system,' he proudly told Congress last year, describing the pressure applied to regional banks. 'That, in turn, put enormous pressure on the regime - even the most reclusive government depends on access to the international financial system.' For Mr Levey, it seems, there is little debate needed on the best way forward when it comes to tackling Pyongyang.
