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.