Allan Lokos and Susanna Weiss, two New Yorkers who run a meditation center on the Upper West Side, arrived in Myanmar in December 2012 eager to explore a nation just emerging from decades of military rule. As practitioners of Theravada Buddhism themselves, visiting this largely Buddhist land, with its golden pagodas and crimson-robed monks, was more than just a holiday.

They left with Lokos barely clinging to life, 30 percent of his body badly burned, after Air Bagan flight 011 crash-landed near Inle Lake, a top tourist destination at the foot of the Shan Hills in central Myanmar, on Christmas Day.

Twenty months into an arduous recovery process, Lokos is back teaching and writing, albeit with badly damaged hands. And in May, Air Bagan and its controlling company, the Htoo Group of Companies, quietly agreed to settle a $10 million personal injury lawsuit brought by the couple. Neither side will discuss the terms, though the couple’s attorney, Eric Rose of Herzfeld, Rubin, Meyer & Rose — one of the first American law firms to arrive in Myanmar since a quasi-civilian government took hold in 2011 — says it is “sizable” by U.S. standards.

That Lokos is alive is remarkable, given the grim prognosis many doctors gave him. But the aftermath of the crash is also a small window into the much-heralded but still-awkward détente between the United States and Myanmar, also known as Burma.

That’s because the founder of Air Bagan is Tay Za, a 50-year-old tycoon who has claimed to be Myanmar’s richest businessman and remains, to his detractors, the most infamous crony of the former junta, which showered its allies with lucrative contracts.

Tay Za has been on a U.S. Treasury blacklist since 2007, and most of his business interests, which range from mining and logging to hotels and aviation, have also been placed on the list since that time. That means U.S.-linked companies can’t do business with them without permission from Treasury’s Office of Foreign Assets Control, or OFAC.

U.S. ties to this former pariah state—which was once so isolated that mobile phone access cost more than $2,500—have thawed considerably, with Secretary of State John Kerry arriving here Aug. 9 for a regional summit and President Obama set to visit, for the second time, in November. These days, street vendors selling papayas and lottery tickets dodge the ever-growing traffic on once-empty downtown streets, middle-class residents stay glued to Facebook—and Yangon citizens protest everything from rising electricity prices to land-grabbing near City Hall.

But U.S. policies toward some of Myanmar’s top magnates, many of whom are still on OFAC’s Specially Designated National (SDN) list, complicate the relationship. Even as the Obama administration eases other sanctions, the list is a headache for many U.S. companies in Myanmar, where it’s difficult to avoid blacklisted local firms. The SDN has helped keep American money largely on the sidelines as Asian and European rivals move in, much to the chagrin of U.S. businesses eager to cash in on one of the world’s last untapped markets. Human rights advocates counter that the list preserves U.S. leverage as American concerns rise about the uncertain fate of democratic reforms, and violence against minority Muslims.

It’s rare that sanction politics affect the average American. But in this case, Treasury rules meant that Weiss and Lokos needed permission from Treasury to pursue compensation and ultimately sue, a process that drew support from the State Department and other officials.

Moreover, Tay Za, like some other tycoons in Myanmar’s long-isolated economy and its murky legal system, has rarely faced the legal challenges sure to come as the country opens to the world.

The couple’s understanding is that the Obama administration raised the issue — a sensitive one, given Tay Za’s SDN status — when Myanmar President Thein Sein visited the White House in June 2013. A State Department official would not confirm that, citing privacy considerations, saying only that “the State Department regularly assists U.S. citizens affected by transportation disasters abroad.”

Still, among the many people Lokos and Weiss are grateful to – a local good Samaritan named Myoe Myoe Htet, their Singapore surgeon, the U.S. consular officials who found them in a local hospital – they include the man a Treasury official once called “an arms dealer and financial henchman of Burma’s repressive junta.”

Without Tay Za’s help after the crash, they say, Lokos would be dead.

***

Susanna Weiss was standing outside the burning wreckage of the Fokker 100 aircraft when she realized she might not see her husband of 22 years again.

On its approach to Inle Lake, their aircraft had sheared through power lines and landed, hard, in a field more than a mile short of the airport, killing their local tour guide and a nearby motorcyclist. The crash was later attributed, in part, to a misjudgment by the pilot.

As smoke engulfed the plane, Weiss jumped out the emergency exit and through a screen of fire. As Lokos tried to jump out himself, his left foot got caught — on what, he still doesn’t know.

“I kept screaming for Allan and he didn’t appear,” Weiss, who suffered broken vertebrae herself, told POLITICO in a phone interview. “It was the first of several times I thought he must be dead.”

Within the next minute or so, Lokos emerged from the plane, sheets of burnt skin hanging from his hands and legs. Hours later, at an ill-equipped hospital nearby, Tay Za entered the picture.

He soon sent Lokos and Weiss on his private plane to a Bangkok hospital, where doctors said that Lokos would die if he didn’t get to the advanced burn unit at Singapore General Hospital, 1,100 miles and a two-and-a-half-hour flight away. As Weiss scrambled to call credit-card companies back home, Tay Za stepped in to front the $250,000 that the hospital demanded, up front, to get Lokos in the door, the couple says.

“Otherwise,” Lokos told POLITICO Magazine, “I die.”

After Weiss and Lokos arrived in Singapore, Tay Za flew there to visit, and told Weiss about his experience surviving a 2011 helicopter crash in Myanmar’s northern mountains. After surgeons operated on Lokos, Tay Za arranged for him to be flown in an emergency medical aircraft to New York Presbyterian/Weill Cornell Medical Center. “He had had a crash himself, and felt personally affected by this. And his great kindness enabled our survival,” says Weiss.

Air Bagan did not make Tay Za available for an interview, and lawyers associated with him would not comment. The airline’s deputy managing director, Sao Thanda Noi, praised his financial and humanitarian assistance to the foreign and local victims. “Tay Za is a very kind person,” she said.

Before the couple left, Weiss says, Tay Za promised to help the couple with any further medical expenses and — quite aware of his sanctioned status — told her that would require Treasury permission. But it would be the last conversation they had, as Weiss started making calls to OFAC.

***

Eric Rose’s law office in Yangon features a bookcase full of weathered, 1930s-era legal texts from Myanmar’s colonial era, a reminder that after decades of isolation, the legal system here is antiquated at best. Myanmar isn’t party to major international aviation treaties.

But U.S. laws are also tricky when it comes to an American tourist or travel agent’s interaction with a Treasury-sanctioned company like Air Bagan.

“Even a two-bit wager with a [blacklisted person], made over a beer, on the outcome of a soccer game, requires an OFAC license,” says Rose, who represented the couple along with Kreindler and Kreindler LLP. Suing, or even contacting, such a company or person, requires a license.

Weiss was able to secure an OFAC license allowing the couple to receive money from Tay Za’s camp, with the help of Rose and State Department officials. Along the way, she said, they received support from New York Attorney General Eric Schneiderman and several lawmakers, including New York senators Chuck Schumer and Kirsten Gillibrand, Rep. Jerry Nadler (D-NY) and Rep. Tim Ryan (D-Ohio).

But when the couple tried to get in touch with Tay Za and Air Bagan, nothing happened, according to letters that Weiss subsequently wrote to the Myanmar government.

So as their medical costs soared, the couple decided to sue, filing lawsuits last December against Air Bagan and Htoo Group — not Tay Za himself — in San Francisco, Myanmar and Thailand. The suits sought $9 million for Lokos, whose injuries were much more severe, and $1 million for Weiss, who was also unable to work.

Settlement talks involving companies and insurers in several countries followed, and the lawsuits were dismissed in May. But not before Tay Za broke his silence in a March Facebook post.

***

Defending his efforts to help Weiss and Lokos, Tay Za complained that they had sent letters to Myanmar’s president and parliamentary leaders, through U.S. Ambassador Derek Mitchell, to increase pressure on him.

In an apparent effort at damage control, he promised to help all of the crash victims, and noted that one of the Myanmar burn victims had been offered $10,000 by Air Bagan’s Singapore re-insurer, far less than the millions sought by Lokos and Weiss.

Tay Za’s post got 1,958 “Likes.” Despite his opulent lifestyle in a country where the average salary is $1,000, many admire him as an employer and philanthropist.

Tay Za got rich despite Treasury sanctions, but they still sting, particularly amid competition from companies not on the SDN list.

“In the old system, you could do very well because no foreign investment was coming in. Many of the successful people were on the sanctions list,” Aung Thura, who runs a Yangon-based research firm, told POLITICO Magazine.

In a June visit to Myanmar, U.S. Assistant Secretary of State Tom Malinowski told some blacklisted individuals that “we look to SDNs to change the way they do business and respect both human rights and civilian rule,” according to a State Department official, who would not say whether Malinowksi met Tay Za. (Tay Za, whose company carried out “key projects on behalf of the Burmese junta, including the purchase of military equipment and aircraft for the Burmese military” according to a 2008 Treasury report, has criticized U.S. sanctions for years, accusing Treasury of having no evidence.)

Meanwhile, Lokos and Weiss continue to recover. Lokos’ third book, in which he explores the role that meditation played in his recovery, will soon go on sale.

“It’s a different normality, but it’s good,” says Lokos. “A lot better than what could have been.”

And even as the process unfolded, Lokos says, they received an email one year after the crash.
It was Tay Za, inviting them back to tour Myanmar as his personal guest.

Link: http://www.politico.com/magazine/story/2014/08/burmas-bumpy-road-109812.html#.U-yMn8WSxPN