U.S. Secretary of State John Kerry gestures as he speaks to the media during a news conference in Sydney on Aug. 12. (Dan Himbrechts/AP)

The State Department was tied in knots this week trying to explain how Secretary of State John F. Kerry and his traveling party all helped line the pockets of one of Burma’s richest men last week, despite the fact that the businessman is on an American sanctions blacklist.

“It was not ideal – obviously, I think we can all say that – but in no way diminishes our efforts to implement sanctions still on the books,” State Department spokeswoman Marie Harf said Thursday.

She was explaining, for the second time this week, how it came to be that during a diplomatic visit, Kerry, his staff, security personnel and traveling reporters stayed at a hotel owned by Burmese businessman Zaw Zaw, who is among the “cronies” of the former ruling military junta whom the Treasury Department lists as a Specially Designated National.

The Washington Post was among those shelling out more than $200 per night (cash only, please) for a room at the plush (but rather strange) Lake Garden Hotel in Burma’s newly built capital, Naypyidaw.

The sanctions designation freezes U.S. financial assets of those listed and — this is the important detail — forbids most U.S. business dealings with them. The State Department said the hotel stay does not bust the sanctions because transactions related to travel are exempt.

The Burmese Foreign Ministry assigned hotel space for delegations visiting the capital Naypyidaw for the Association of Southeast Asian Nations, Harf said. The United States requested a change of hotels because of the sanctions designation, but the Burmese would not comply, Harf said Thursday.

The small capital has limited hotel space, and Kerry’s large party has security and space requirements that limit the selection further, State Department officials said. Also, given the vast business dealings common to the SDN-listed cronies, it would be hard if not impossible to find any hotel not linked to their holdings.

The Lake Garden has a sprawling campus ringing a picturesque lake near the conference center. The enormous rooms have cathedral ceilings, bathtubs big enough for a pony and industrial-size cans of insecticide thoughtfully placed beside the bed.

The brand-new hotel isn’t officially open yet, staff politely said, and doesn’t have all its paperwork in order to process credit cards. Hence the cash-only basis for rooms and food.

They prefer crisp, new, U.S. $100s.