Appeasement Money Laundering

The Seven Billion Dollar Man

[Update: The actual figure turns out to be over $7 billion, if you include all aid since 1995 and add in Kim Dae Jung’s $500M bribes. It still excludes money from South Korean corporations, and of course, aid from the U.N. or other countries. South Korea now provides 46% of North Korea’s support. h/t The Nomad.]

Let’s briefly review where we’ve been with North Korea over the last year — missile tests, nuclear scares, crude insults, food aid stolen from hungry people, and the burgeoning flight of refugees. In light of all this, I would really like to hear South Korea’s explanation of just what its $3.13 billion (with a “b”) contribution to Kim Jong Il’s Hennessey fund has bought for the cause of peace. That’s just since 2003, mind you. Unacceptable answers include submarines, artillery, MiG-29’s, and missiles, but we’ll give partial credit for “cirrhosis.”

I presume that figure excludes indirect aid, such as the money-losing Kumgang project that the South Korean government has coerced Hyundai Asan into maintaining. Yes, we know where that money is going, too. Can you see the collision course between that aid and the U.S. Treasury Department? How about now?

U.S. Treasury Secretary Henry Paulson reportedly asked his South Korean counterpart on Thursday to help block illicit financial transactions conducted by North Korea.

A government source said the request was made on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum’s finance ministers meeting in Hanoi.

In the first-ever meeting between the top financial policymakers of the two countries, Paulson stressed to Minister of Finance and Economy Kwon O-kyu that closer cooperation on this matter was needed to prevent the spread of weapons of mass destruction. Washington maintains that North Korea actively sells weapons and sponsors the spread of weapons technology that could threaten peace and stability around the world.

The United States has been pushing for a new monitoring system at the APEC gathering that would make it harder for countries to funnel illicit money through financial institutions.

In response, Kwon told the treasury secretary that taking action against North Korea is not something that can be handled within the jurisdiction of the finance ministry. He said such issues had to be discussed with the foreign ministry and other national defense agencies.

Prediction: this will come up when Roh Moo-Hyun visits President Bush. And it will get ugly and public. If the United States manages to get South Korea to cut Kim Jong Il off, then Kim Jong Il’s survival is down to aid from China and Russia, plus whatever proceeds he can filter through Stuart Levey’s net. Russia’s banks aren’t about to go the way of Banco Delta Asia and face the wrath of PATRIOT 311, and we’ve already seen signs that China isn’t willing to pay that price, either.

Richardson writes that South Korea must choose sides. That time appears to have come.


  1. Roh will NEVER cut off KJI. You are right that it will get uglier as it’s ugly already. We all publicly already know the URI party is KJI’s puppet.

    I am going to buy a new car soon and I want KJI’s negotiating services.

    I didn’t realize how much money KJI has extorted already.


  2. KJI is the seven billion dollar man because he knows his mooches and marks, and their motivations, better than they know themselves and clearly better than they know him. He knows what he wants. KJI also knows that if he plays the “negotiations” right, getting what he wants will cost him nothing.

    In contrast, some of the other parties do not act as if they know what they want. KJI “negotiates” with two kinds of counterparties. KJI “negotiates” with those who want to use the DPRK and those who want to be used by him and the DPRK.

    The Chinese and Russians want to use the DPRK, which is OK with KJI as long as they pay. The motives of the Chinese and Russians are reasonably clear and all sides know them fairly well.

    KJI also “negotiates” with those who want to be used by him and the DPRK.

    The ROK acts as if (actually has said) it wants only to know what, when, where, and how much to hand over in furtherance of the daydream of a Korea reunited at some point in the far far far far far far distant future, or to see themselves as engaged in some sort of “diplomacy,” “negotiation” or “dialog” in furtherance of that daydream. KJI has learned from many years’ experience that even though he has nothing substantial to offer in negotiations in return and, in any case will give nothing, the ROK is desires to give him what he wants. The ROK acts now as if it never learned anything useful from those same years when KJI was gaining his experience.

    Under the previous administration, the US did not act as if its motivations were very different from those of the current ROK administration, except that it wanted to have a “presence” on the Korean peninsula and influence of some kind (KJI says “hegemony”) with an ally (client state will probably have to be close enough). The US has begun to act as if it learned something from those years of experience with KJI only in the last five years or so – that should continue.

    Japan’s motivations for handing over goodies appear to be some unacknowledged guilt, and possibly some commercial considerations, though anger (abductees, Liancourt Rocks, etc.) probably keeps them from being as generous as they otherwise might be.

    KJI is the winner in the self-enrichment aspects of diplomacy and should not be begrudged the benefits of his superior knowledge of his counterparties and superior “negotiating” technique (probably best to have your sarcasm detector operational for some of that). He has what he has because he is good at what he does.

    The time came long ago for the rest of the world, particularly the ROK, the US and Japan, to get better at their enterprise. The first priority should be gaining a clear understanding of everyone’s motives, especially each party’s understanding of its own. If the motives of the ROK, US and Japan include a reunited, non-nuclear, prosperous and peaceful Korea, continuing to support the KFR in any way will not serve. That is likely to mean that either the people (the elite is not part of the people) in the DPRK will have to bear considerably more pain as a result of isolation as complete as it can be made, or military action must be taken that is not acceptable to anyone except as the very last resort and maybe not even then.

    Isolation of the DPRK should include interdiction of all commercial relationships where that is possible, interdiction of all criminal activity that can be interdicted, and a refusal by all parties to acknowledge or engage in any public diplomatic exchange with the DPRK (no more six-party confabs) and, in particular, KJI personally. To the maximum extent possible, cheaters (Mr. H. Chavez comes to mind as an example) should receive the same treatment. When the DPRK and KJI are no longer rewarded for their confidence scheme and KJI’s status as nothing more than a Thug is made clear to all (especially him), progress may be made toward the goal of a peaceful and reunited Korea.

    KJI and the DPRK demand respect, but they do not command it. The one thing that KJI and the DPRK appear to crave more than anything else from the rest of the world and the thing they deserve least is respect. KJI and the DPRK do not seem to be able to distinguish between fear (we have the bomb and we demand that you respect us) and actual respect (demonstrably, in context, our way of doing things is as good as or superior to the alternatives and Juche is more than a stupid empty assertion). Continuing to act as if either KJI or the DPRK commands respect in any conventional sense by “negotiating” with them or publicly engaging them diplomatically or personally is counterproductive. The world should stop giving KJI, the rest of the KFR, and the DPRK the impression that they are regarded as anything more than a continuing, somewhat successful, gaudy (Arirang) criminal enterprise.



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