For the Love of Money

From whiskey to nuclear secrets, North Korea plays a remarkably entrepreneurial role in international affairs for a Communist regime.

Pakistan and North Korea have been involved for decades in a secretive trade: The Pakistani military acquired missiles from North Korea, and Pyongyang, as part of the deal, gained access to Pakistan's uranium enrichment centrifuges. Now, new details have emerged that reveal how this relationship was smoothed by money. The Washington Post published revelations today, attributed to me, that top-level North Korean officials bribed Pakistani military officials with over $3 million in exchange for the nuclear technology. This disclosure offers fresh details about how nuclear weapon secrets have proliferated across the globe -- and provides a unique insight into the dangerous consequences of the hermit kingdom's "entrepreneurial" role in world affairs.

The story, in short, is this: Abdul Qadeer Khan, the founder of Pakistan's nuclear weapons program, provided me with a letter written in 1998 by a high-ranking North Korean official, which laid out payments of cash and jewelry intended for two Pakistani generals in exchange for nuclear know-how. Khan, who I have been in correspondence with since the early 1980s, also provided a written narrative that described how he personally handed the money over to one of the generals. While Pakistani officials maintain that the letter is a forgery, both senior U.S. officials and the former International Atomic Energy Agency official in charge of investigating Khan said that the documents accord with their understanding of the corruption that fueled Pakistan's crucial assistance to North Korea's nuclear weapons program.

But the larger issue of why North Korea has been so enthusiastic about acquiring, and subsequently exporting, nuclear technology remains unanswered. What motivated North Korea to reportedly build a plutonium-producing nuclear reactor for Syria -- a project destroyed by Israeli jets in 2007? Why has Pyongyang sold missiles to Iran and may be helping the Islamic Republic with its nuclear program -- perhaps with the P2 centrifuge enrichment technology that it revealed last year?

You don't have to be a specialist in East Asia, or on North Korea's "Juche" ideology of self-reliance, to know the answer. It is simple: cash. American diplomats might go on overseas postings determined "to build and sustain a more democratic, secure and prosperous world," as the State Department's mission statement puts it, but their North Korean counterparts go to make money. Indeed, they have to. It's partly because of their national ideology, and partly because of practical necessity. And it's not just about boosting Pyongyang's foreign exchange reserves.

I remember, when living in Pakistan as the BBC and Financial Times correspondent in 1978, a conversation I had with an American diplomat at the U.S. embassy in Islamabad just before the arrival of North Korean Vice President Pak Sung Chul on an official visit. I asked the diplomat, who happened to have an impish sense of humor, what would be a good question to ask Pakistani officials about North Korea.

"Why don't you ask whether North Korea will find another way of funding its embassy?" he suggested, explaining that Pyongyang did not give the embassy enough money to function. Instead, its diplomats would buy duty-free alcohol from diplomat-only stores, and then sell it at vast profit on the local black market.

Islamabad, as the capital of an Islamic state, was dry -- but it was also thirsty. And the North Korean diplomats' bootlegging scheme was a very lucrative business. It drove the Pakistani government crazy, but there was little they could do about it: North Korea was an important provider of artillery and munitions for the Pakistani army.

I only got around to asking Pakistani officials about this some 20 years later, during a trip to Islamabad in summer 1998. Just before my arrival, a curious news item had appeared in the international press: The wife of a North Korean diplomat, Maj. Gen. Kang Tae-Yun, had been shot dead in Islamabad, apparently accidentally, by a neighbor's servant. (It was the transfer of her body home that is referenced in the letter published today in the Washington Post.) In conversation with a senior Pakistani official, while trying to probe the story, I recalled the anecdote about how the North Koreans funded their local embassy. He smiled ruefully and muttered: "They still do."

The most frequently mentioned line of conjecture for why Mrs. Kang was shot suggests Pakistan's Inter-Services Intelligence (ISI), the country's feared spy agency, organized the operation because it thought she was revealing information about contacts between Pakistan and North Korea to Western intelligence agencies. But North Korean official Jon Byong-Ho, who authored the letter, clearly thought that the real target was Mr. Kang -- officially the North Korean economic counselor in Islamabad, but actually Pyongyang's coordinator of nuclear and missile cooperation, working closely with A.Q. Khan.

According to Khan, the Kangs were walking up their driveway of their home, when the telephone in the house started to ring. Kang rushed ahead to take the call just as a shot rang out. Kang was not hit, but his wife was peppered with shotgun pellets and fatally wounded.

An investigation by the Pakistani military found that the shot was "accidentally" fired by the neighbor's cook, who had been holding the shotgun of the neighbor's armed watchman. (The Kang's house was in a smart neighborhood of Islamabad; nearby villas were rented to Chinese military sales executives as well as a Japanese diplomat. Such houses usually have several servants and a cook, as well as a watchman on the gate.) But why would Kang have been the real target? Perhaps his greed got to him: The possibility should not be ruled out that Kang had been running commercial rackets in Islamabad, and had upset or had forgotten to pay off the right people.

But it might not have been whiskey that was Kang's game. Khan told me that, in 1997, Kang was involved with one attempt to buy so-called maraging steel from Russia, a vital material for making uranium enrichment centrifuges, particularly of the P-2 type recently observed by U.S. scientists visiting North Korea. A sample of the steel had been sent to Kang in Pakistan, but was shipped via British Airways and, unsurprisingly, impounded by British authorities. In early 1998, again according to Khan, Kang tried to buy additional undisclosed, high-tech items in Russia.

Like the North Korean diplomats who lined their pockets by running a liquor smuggling business out of the embassy in Islamabad, Kang's motives may not have been simply nationalistic. He was, I am told, trying to turn a profit on the transactions in order to fund his son's schooling. North Korean Supreme Leader Kim Jong-Il provided his son with a Swiss education, and it sounds like Kang thought his child deserved the same. The Juche philosophy of self-reliance may be meant to protect the hermit kingdom, but as the experience of North Korean officials and those caught in the crossfire in Pakistan attests, it is also a good excuse to make a killing.

Cancan Chu/Getty Images


The Hard Man of Damascus

Let's be clear. There can be no real democratic reform in Bashar al-Assad's Syria.

With Syrian troops encircling the city of Hama, Barack Obama's administration and its European counterparts continue to hold out hope that Syrian President Bashar al-Assad can be coaxed into accepting a peaceful transition to democracy. Instead of joining the protesters in demanding Assad's resignation, the U.S. envoy to Damascus, Robert Ford, is encouraging prominent dissidents to hold a dialogue with the regime.

Unfortunately, there are no plausible circumstances under which a democratic transition would constitute a rational choice for the embattled dictator, and it appears exceedingly unlikely that the Syrian people will peacefully accept anything less. The Syrian people's fight for freedom promises to be long, uncertain, and violent.

The crux of the problem is Syria's unique minority-dominated power structure, which is most closely comparable to Saddam Hussein's Iraq. Alawites, a heterodox Islamic sect comprising roughly 12 percent of Syria's population, may not be the privileged minority suggested by some Western media reports, but they provide both the brains and the muscle for a secular authoritarian political order that would otherwise be untenable.

Alawite solidarity renders the loyalty of the internal military-security apparatus nearly inviolable, enabling Assad to mete out a level of repression far beyond the capacity of most autocrats. The bloodiest government reprisal during Poland's long struggle for democracy -- the killing of nine Solidarity strikers in December 1981 -- would make for a very placid Friday afternoon in today's Syria, where over 1,400 have been gunned down in less than four months. Egyptian President Hosni Mubarak's police quickly disintegrated under comparable strains, while his army engineered his downfall in less than three weeks.

The powerful stigma associated with Alawite hegemony over a majority Sunni population both necessitates and enables this police state. While the sectarian identity of Assad and his chief lieutenants is not the primary grievance of most Syrians, a substantial minority -- perhaps 10 to 20 percent, mostly religious Sunnis -- loathe the regime so deeply that they cannot be co-opted and will exploit any respite from repression to mobilize against it. This feeds into the existential insecurities felt by most Alawites and makes it nearly impossible for the regime to safely liberalize.

A straight-up transition to democracy under these circumstances is difficult to fathom. A freely elected Syrian government would surely be dominated by Sunnis, responsive to their demands, and therefore strongly disposed to mete out harsh justice for the preceding decades of brutal tyranny. Assad could never rationally accept such a transition unless his regime was on the verge of collapse, by which time a peaceful transfer of power would be exceedingly unlikely.

Other countries have solved this conundrum by negotiating an agreement whereby an autocratic regime consents to free and fair elections, in exchange for the opposition's acceptance of limitations on the new government's authority to punish or dispossess existing stakeholders. By drawing into the process those who have the power to disrupt a peaceful transition, extrication pacts have propelled robust democratic breakthroughs in such thorny political climates as apartheid South Africa and Gen. Augusto Pinochet's Chile.

A "pacted" transition requires that a critical mass of the ruling elite come to prefer "democracy with guarantees" over the costs of continuing to forcibly monopolize power. Elite beneficiaries of authoritarian rule range from soft-liners, who have the fungible assets and limited criminal liability to make it in the "real" world of democracy, to hard-liners, who don't. When there is a decline in the regime's ability to forcibly ensure continued public quiescence, soft-liners have growing incentives to hedge their bets by seeking a political accommodation with the opposition.

Unfortunately, Assad is a hard-liner. Under the present circumstances, he can count on solid Alawite backing, strong support from other religious minorities, and the acquiescence of many Sunnis who are prosperous, staunchly secular, or militantly anti-Zionist. These allegiances, however, would quickly evaporate in a democratic Syria. Absent the looming threat of catastrophic domestic upheaval, a regime-less Assad family may not even command majority support among Alawites.

In contrast, the livelihoods of most Syrian civil servants, businessmen, military officers, and others who benefit inordinately from the current order -- a broadly multi-confessional elite -- would not necessarily be threatened by a negotiated transition to more representative government. In contrast with Mubarak's Egypt, however, soft-liners have not been allowed to gain autonomous power within the state -- their ability to comfortably inhabit a post-authoritarian Syria puts them squarely outside the Assad family's circle of trust.

The president's extraordinarily thin base of popular support and uncertain relations with soft-liners militate against a pacted transition. Whatever formal guarantees of immunity and institutional prerogatives Assad might eke out of the process, his acute political vulnerability will make it very risky for him to linger very long in a free Syria. Even Pinochet, whose sympathizers captured 40 to 50 percent of the national vote for many years after his departure, found that democratic republics eventually tire of honoring their prenatal promises to powerless ex-tyrants.

Even if Assad were amenable to a deal, a pacted transition also requires that the regime and the opposition be capable of making credible commitments to each other. Outgoing autocrats must have faith that their erstwhile adversaries will hold up their end of the bargain after the tables have turned, while opposition leaders must have reason to trust that the regime will not renege on its commitments once the threat of mass popular mobilization has receded.

Neither condition exists in Syria. Years of state repression have left the country with no organized opposition of sufficient stature to credibly promise anything to the regime, while Assad's failure to honor past reform pledges makes most Syrians very skeptical that he can take bold action.

There is no easy fix to this impasse. Transition experts ordinarily prescribe an extended period of negotiated liberalization to cultivate credible opposition interlocutors and restore a measure of public trust in the government. For Assad, however, such an opening would not be sustainable unless radical opponents of the regime refrain from exploiting it to mobilize in pursuit of revolutionary change. So long as the regime is shooting people, no one in the opposition has enough clout to clear the streets.

Although the credibility gap between Assad and his adversaries can be narrowed by negotiating under the auspices of an outside arbiter (Turkey is now angling for the role), the Syrian president would still have to take radical and irreversible steps to signal his commitment to change. At a minimum, this would include negotiating under international auspices, releasing all political prisoners, and expelling notorious human rights offenders from government -- starting with his brother, Maher, the feared commander of the Republican Guards and the Syrian Army's 4th Division.

Attempting such a break with members of his family, clan, and sect would be an act of political hara-kiri for Assad, leading at best to a dignified exile (and considerably worse if his plan should go awry). Thus far, he has displayed little predilection for self-sacrifice. Assad's recent efforts to organize a "national dialogue" underscore that he isn't seeking credible commitments from his opponents. The select group of dissidents allowed to attend a conference in Damascus last week conspicuously excluded figures with significant influence over the protesters. The Syrian president isn't trying to negotiate with his opponents -- he's trying to divide and defeat them.