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BANGKOK, Thailand -- A Thai businesswoman, who is banned by the U.S. Treasury Department from doing business with Americans because she allegedly facilitated financial transactions for Zimbabwean President Robert Mugabe's wife, has been appointed as the prime minister's office minister.

Nalinee "Joy" Taveesin was among 10 new people brought in to become ministers by Prime Minister Yingluck Shinawatra on January 18 as part of a cabinet shakeup.

They include the first Red Shirt protest leader to win a cabinet post, and a new defence minister.

The shuffle transferred six ministers within the cabinet.

King Bhumibol Adulyadej, who is a constitutional monarch, signed a royal command on January 18.

It was unclear if the prime minister was aware of the decision on November 25, 2008 by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) which designated Ms. Nalinee among several others for helping Mr. Mugabe's regime.

"OFAC is designating Nalinee Joy Taveesin, a Thai businesswoman who has facilitated a number of financial, real-estate, and gem-related transactions on behalf of Grace Mugabe, Gideon Gono, and a number of other Zimbabwean Specially Designated Nationals (SDNs)," the U.S. Treasury statement said in 2008.

The Treasury posted the designation on its website (http://www.treasury.gov/press-center/press-releases/Pages/hp1295.aspx).

"Ironically, Nalinee Taveesin has participated in a number of initiatives on corruption and growth challenges in Africa and Southeast Asia while secretly supporting the kleptocratic practices of one of Africa's most corrupt regimes," the Treasury's OFAC statement said.

"As a result of Treasury's action, any assets of the individuals and entities designated today that are within U.S. jurisdiction must be frozen. Additionally, U.S. persons are prohibited from conducting financial or commercial transactions with these individuals or entities," it said.

"The Mugabe regime continues to resist the call of the Zimbabwean people to loosen its corrupt and violent hold on power," OFAC Director Adam J. Szubin said in 2008.

"The United States supports the people of Zimbabwe in their struggle to achieve a political and economic system built on fairness and transparency rather than patronage and self-dealing," Mr. Szubin said.

Ms. Nalinee said the allegations were "completely untrue."

"I have never traded in gemstones. I have never brought diamonds in for sale. I am friends with the presidents of many countries. This is a case of guilt by association," she said, according to the Bangkok Post on January 19.

"It was not a charge, but an accusation with a judgment already made. Even though I would like to have it redressed, I have no idea how to go about undoing it," Ms. Nalinee said.

When Prime Minister Yingluck earlier appointed her as Thailand's trade representative in 2011, there was no public mention of the U.S. Treasury's ban.

In her new post as prime minister's office minister -- joining two other people who also hold that title -- Ms. Nalinee could now be hobbled in her work by the U.S. decision and her alleged reputation.

The prime minister appeared to have shuffled her cabinet to reward people who helped her election victory in July 2011, and to improve the performance of her stumbling administration.

Her government suffered during a massive flood which lasted nearly six months, killed more than 800 people, affected more than two million others, inundated one-third of the country, and flooded parts of Bangkok.

In the shuffle, Mrs. Yingluck also appointed Natthawut Saikua as deputy agriculture and cooperatives minister, making him the first Red Shirt protest leader to gain a cabinet post.

Mr. Natthawut was briefly imprisoned in 2007 for making allegations about who was behind a 2006 military coup, and jailed again in 2011 pending trial for helping to lead a pro-democracy insurrection by Red Shirts in Bangkok.

He is a newly elected Member of Parliament, and has yet to go to trial for various charges resulting from his role as a Red Shirt leader.

The nine-week insurrection by the Red Shirts, officially known as the United Front for Democracy Against Dictatorship (UDD), resulted in scattered bloody clashes with security forces which left 91 people dead, mostly civilians.

Mr. Natthawut is a fire-brand speaker who rallied the Red Shirts with speeches about how aristocrats rule this Southeast Asian country while the poor and working class are exploited like feudal serfs.

The Reds were demanding immediate elections to bring back former Prime Minister Thaksin Shinawatra from self-exile after he was ousted in the 2006 coup.

Mr. Thaksin fled Thailand to avoid a two-year prison sentence for corruption during his five-year administration, but with massive support from the Red Shirts he was able to help orchestrate his sister, Mrs. Yingluck, to win the election and become prime minister.

She is widely perceived as a puppet of her brother, who described Mrs. Yingluck as his "clone."

Mrs. Yingluck's cabinet shuffle also brought in a new defense minister, Air Chief Marshal Sukumpol Suwanatat, who was seen as a fierce critic of the 2006 coup.

Army Chief Prayuth Chan-ocha played a leading role in the 2006 coup when he was First Army Region commander, and he also helped lead the military's crackdown against the Red Shirts' insurrection in 2011.

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Richard S Ehrlich is a Bangkok-based journalist from San Francisco, California, reporting news from Asia since 1978, and recipient of Columbia University's Foreign Correspondent's Award. He is a co-author of four non-fiction books about Thailand, including Hello My Big Big Honey!" Love Letters to Bangkok Bar Girls and Their Revealing Interviews; 60 Stories of Royal Lineage; Chronicle of Thailand: Headline News Since 1946; and King Bhumibol Adulyadej, A Life's Work: Thailand's Monarchy in Perspective. His website is

Asia Correspondent

(Copyright 2012 Richard S Ehrlich)