THE face towel was scented with lemon grass, and the welcome drink was fresh lemonade poured over crushed ice. Sultry breezes filtered through the open-air lobby decorated in colonial style, with wicker chairs, spinning ceiling fans, faux Southeast Asian antiques and pillars of solid teak. Footpaths wound past date palms, jasmine and frangipani; a swimming pool extended toward an artificial lake clotted with hyacinths. Beyond the lake lay one of the wonders of Southeast Asia: an arid plain speckled with 2,000 Buddhist temples.

On a scorching May morning, I had taken a break from touring these structures to drop by the finest hotel in Bagan, the ancient Burmese capital, an hour’s flight north of Yangon, Myanmar. Opened in 2005, the Aureum Palace Hotel sprawls across 27 acres and encompasses a sushi bar, spas, fountains, more than 40 guest rooms and 72 villas. The best of these, the $1,090-a-night Island Villa, includes a lap pool, a sun deck with temple views and a personal valet.

There was only one problem with the Aureum Palace Hotel: its owner. The hotel is the property of U Tay Za, reportedly the richest man in the country — and a close associate of its former military dictator, Gen. Than Shwe. Owner of Air Bagan and Asia Wings (the country’s biggest private airlines), five other luxury hotels and beach resorts in Myanmar, and the Htoo Group, a conglomerate that includes mobile-phone services and timber concessions, Mr. Tay Za has been described by the United States Department of the Treasury as a “notorious henchman and arms dealer.” After the 2007 Saffron Revolution, when the junta killed dozens of pro-democracy demonstrators and arrested thousands more, the Bush administration froze his assets and blocked him and his family from traveling to the United States.

In the new Myanmar, though, Mr. Tay Za has apparently changed his ways. Following the lead of Myanmar’s reformist government, this former crony of the junta is embracing philanthropy and what his son recently described to Reuters as “foundation work.” And even though he remains on the Treasury’s blacklist, it seems that Western tourists have begun to feel comfortable staying at his hotels. After struggling to fill its rooms for years, the Aureum Palace had an occupancy rate last winter of 80 percent.