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U.S. Probe Alleges Crime in N. Korea Government

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U.S. Probe Alleges Crime in N. Korea Government


U.S. Probe Alleges Crime in N. Korea Government

U.S. Probe Alleges Crime in N. Korea Government

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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An investigation by the Bush administration has found that North Korea's government officially sanctions criminal products such as counterfeit American currency, narcotics and counterfeit cigarette brands. The administration is divided over how to use this information.

STEVE INSKEEP, host: An investigation by the Bush administration has led to a range of allegations against North Korea. The administration says, North Korea's government officially sanctions criminal activities. Those activities include counterfeiting American currency, the production of narcotics and other drugs and the counterfeiting of American and other cigarette brands. The administration is divided over how to use this information and whether to pressure North Korean leaders to give up nuclear weapons or give up power.

NPR's Mike Shuster has more.

MIKE SHUSTER reporting:

The criminal activities of North Korea are nothing new. The United States has known about them for many years. But what the Bush Administration's investigation found is that profits from crime are now generating more than half a billion dollars a year for the government in Pyongyang. The investigation, begun in 2001, found that the North Koreans are counterfeiting U.S. $100 bills as well as Japanese currency. They are producing heroin, methamphetamines, and fake pharmaceuticals, such as Viagra, and they are manufacturing fake Marlboro and other brands of cigarettes, along with the American tax stamps applied to each pack.

Mr. DAVID ASHER (Former State Department official): You name it, they're pretty much in it, and their product mix more or less shifts in line with law enforcement against it, and frankly, client demand.

SHUSTER: David Asher was the State Department official who headed the investigation. He is now out of government. He says that after the collapse of the Soviet Union, North Korea's economy went into a steep decline in the 1900s, and it was then that Pyongyang took to crime in a big way. And he says there is plenty of evidence that these activities are under the control of the top leaders in North Korea including Kim Jong-Il.

Mr. ASHER: Kim Jong-Il was the head of the Korean Workers' Party, and it has become known to us and to many countries in the world that agents and organizations affiliated directly with the Korean Workers' party are the prime transactors of these criminal businesses.

SHUSTER: The administration's investigation involved 14 federal agencies, including a wide range of intelligence offices. Mitchell Reiss, who for two years headed the State Department's policy planning office in the first Bush Administration, said the investigation revealed a much larger criminal enterprise at the heart of the North Korean economy than he expected.

Mr. MITCHELL REISS (Dean of International Relations and Professor of Law, College of William and Mary): The scale and the scope of the multiple investigations and the multiple nefarious activities of North Korea did surprise me, and did surprise my colleagues at State. We had underestimated the vigor and the skill with which the North Koreans had engaged in these multiple activities.

SHUSTER: Within the past six months, the United States government has begun to act to stop these activities. In September, the Treasury Department named a bank in Macau, a tiny former Portuguese island colony now part of China, as a money-laundering operation for North Korea. The Justice Department has also brought indictments against dozens of alleged Chinese criminal gang members in Newark and Los Angeles, accusing them of smuggling drugs, counterfeit cigarettes and counterfeit currency into the United States. These illicit products are believed to have originated in North Korea.

Robert Einhorn, former Assistant Security of State for Nonproliferation Issues, says the Administration now has to decide just what it wants to do with what it's learned.

Mr. ROBERT EINHORN (Senior Advisor, Center for Strategic and International Studies): I think it's very positive that the Bush Administration is cracking down on North Korea's illicit activities and their illicit sources of income. I also think it's important that we crack down on them in a way that compliments and reinforces what we're trying to do in the Six-Party Talks on the nuclear issue.

SHUSTER: For more than two years, the United States, South Korea, China, Russia and Japan have been negotiating with North Korea over its nuclear weapons program, in what has come to be known as the Six-Party Talks. Right now, North Korea is using this investigation as an excuse to boycott the Talks. At the same time, the Bush Administration is divided over what it sees as the goal of the investigation. Some hard liners in the Administration believe it can strangle the Kim Jong-il government and bring it down. Others, like Mitchell Reiss, who is now Provost for International Affairs at the College of William and Mary, do not believe the pressure can ring about regime change. But, Reiss argues, it can cause a significant change in North Korea's behavior.

Mr. MITCHELL REISS (Provost of International Relations and Professor of Law, College of William and Mary): The illicit activities and the crackdown on these activities is part of a larger effort to try to redirect and re-channel North Korea's activities away from being a rogue state, or a member of the axis of evil, and to a more normal state, a more normal member of the International community of countries. And it's really up to the North Koreans to hopefully make the right decision.

SHUSTER: The Bush Administration has sought the help of many other governments in this investigation, especially that of China. To a large extent, North Korea exports its illicit products through Chinese ports, but to maintain Chinese cooperation, the Bush Administration has to be clear on what it wants from North Korea, says Robert Einhorn.

Mr. EINHORN: If the Chinese believe that we're pursuing these measures for regime change, than we can't expect Chinese cooperation, because they don't favor a sudden collapse of the North Korean regime.

SHUSTER: David Asher, who spearheaded the investigation, also believes the goal should be to end North Korea's nuclear program and encourage it to become a normal state.

Mr. DAVID ASHER (Adjunct Scholar, Institute for Defense Analysis): If the North Korean leadership were to embrace the opportunities that are being put forward, I think it would be surprised by what it would get. At the same time, if it continues to act as a international pariah state, a Soprano State, as I call it, I think the implications of this behavior for its ability to operate in the International system could become painfully clear.

SHUSTER: That means in all likelihood more revelations and more pressure on North Korea's criminal activities in the coming months.

Mike Shuster, NPR News.

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