North Korean House of Cards

3. Control of this economic sector ultimately resides with the Kim family
through the Party apparatus
4. Hard currency for this economic sector would be managed by a
dedicated bank, not the Foreign Trade Bank, which oversees the hard
currency generated for the People’s Economy. 388
Under the pretext of procuring funds to manage the Party and supporting
the regime’s strategy of revolutionizing South Korea, Kim Jong-il carved out a
section of the Central Committee FAD to create Office 39. The rationale, as communicated
to the wider leadership, was that the Party economy was growing so fast
that the FAD was incapable of managing it on its own. Income generated by Office
39 would complement funds from the FAD, but would be dedicated to providing
the living expenses of senior Central Committee cadre; galvanizing the idolization
of the Kim family, an effort led by Kim Jong-il, and creating a treasure chest for
Kim Jong-il’s personal use. The office was presumably led by Kim Jong-il himself
until 1990, when he appointed Choe Pong-man, a close associate director. Choe was
replaced by Kim Tong-un in 1993.
Chart 4: Command and Control of Office 39
Kim Jong-il
KWP Finance
and Accounting
Department (FAD)
Daesong Group
Office 39
Daesong Bank
Trading
Companies
Mines Farms Factories Foreign
Restaurants
Direct Communication
388 Kim Kwang-jin.
Ken E. Gause
179