North Korean House of Cards

his power as heir apparent. In the early 1990s, the power of this Central Committee
department increased significantly when it absorbed the KWP Administration
Department, which was responsibile for Party surveillance of the judicial and
internal security apparatus. 418 In 1995, Kim Jong-il brought Jang Song-taek into the
KWP OGD as a First Vice Director to run the new Administrative Section.
Jang’s appointment occurred at a critical period in Kim Jong-il’s power consolidation
process. Kim Il-sung had died the year before and the People’s Economy
had begun to falter. For Kim Jong-il to move forward, he needed to accelerate the
idolization of the Leader and firmly manage his close aides. As a consequence, those
close to Kim began to expand the Party’s encroachment on the national economy.
Most likely with Kim’s blessing, Jang Song-taek followed suit and the OGD moved
from being just a surveillance and enforcement mechanism to being one of the main
revenue generating entities of the Kim family. 419
As the 1990s progressed, the Administrative Section grew in importance
and size under Jang’s guidance, eventually taking up an entire section of the Central
Committee office building. This was largely due to its growing responsibilities for a
number of hard currency operations, most of which were directly tied to the Royal
Economy.420 Jang expanded his network of revenue generation along two lines:
1. Using the institutional authority that came with his new posting. For
example, the Administrative Section secured access to significant funds
by using the customs control rights, which fell under its oversight, to
grant clearance on state organs’ export items earning fees or service
charges in the process. 421
2. Co-opting hard currency operations from powerful entities across the regime
by leveraging his Kim family ties. For example, soon after his appointment
as First Vice Director of the OGD, Jang engineered the transfer of
the Korea National Insurance Corporation (KNIC) from the Daesong
418 The dissolution of the KWP Administration Department followed a turf battle with the
KWP OGD over who would manage the internal security portfolio. Kim Si-hak, the Director of the
KWP Administration Department, had been a close associate of Kim Jong-il, but lost favor as a result of
the power struggle. The department was dissolved in the early 1990s, and its responsibilities transferred to
the newly created OGD Administrative Department.
419 Kim Kwang-jin, op. cit. Before coming to the KWP OGD, Jang Song-taek had been engaged
in economic affairs. He had overseen the capital construction campaign in preparation for the 13th
World Youth and Student Festival, which had brought him into contact with a number of hard currency
generating operations throughout North Korea. By the late 1980s, he had become one of the key members
within the Kim family with access to a number of revenue streams.
420 Kim Kwang-jin, op. cit.
421 Hyon Song-il, North Korea’s National Strategy and Power Elite, op. cit.
Ken E. Gause
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