North Korean House of Cards

Korea’s former Ambassador to Iran and onetime aide to Ri Chol. The
speculation was that Ri moved into Kim Jong-un’s Personal Secretariat
as an advisor on the Royal Economy. 440
The most prominent change in this period of restructuring was Jang Songtaek’s
appointment as Vice Chairman of the NDC in June 2010. According to North
Korean allegations tied to his investigation and execution, this was when Jang
Song-taek began to move with impunity within the regime. By this point, he was vital
to Kim Jong-il’s control of the regime. He ran operations with China on the economic
front. He also held the portfolio for the domestic economy. As Vice Chairman of the
NDC, he had access to military-based hard currency operations and the power to
reorient them to the KWP Administrative Department through Department 54. In
addition, he controlled the internal security apparatus, which allowed him to limit
the situational awareness across the regime of his own actions, as long as it did not
interfere with Kim’s own control of the regime.
Kim Jong-il’s worsening health problems and the demands of succession
politics may have contributed to the lack of pushback against the growing power
of the Jang Song-taek network, which was based in the KWP Administrative
Department. Reports of Jang’s growing presence in the Royal Economy surfaced
in early 2010, when he took on the currency operations of his rival O Kuk-ryol
through the creation of a trading firm called the Korea Daepung Group. 441
Throughout 2010 and into 2011, control of trading companies and other lucrative
hard currency operations was moved from a range of regime institutions, including
Office 39, to the Administrative Department.
440 Kim Young-Gyo, “Return of N. Korean envoy in Geneva enhances Jong-un’s succession,”
Yonhap News Agency, April 1, 2010. According to some sources, before his departure, Ri transferred
Kim Jong-il’s secret funds, estimated at $4 billion, from Swiss banks to banks in Luxembourg and other
European countries.
441 Lee Young-Jong, “O Kuk Ryol, Who Returned Around the Time of Jang Song Taek’s Downfall,”
op. cit. According to South Korean intelligence sources, the power struggle between O Kuk-ryol and Jang
Song-taek began in full force in 2009 after O’s appointment as Vice Chairman of the NDC. Within five
months of entering the NDC, O Kuk-ryol created the Korea International Company, a trading company
which was sanctioned by the SPA. Jang Song-taek, fearing that this organization would inhibit his ability to
expand his hard currency operations, launched the Korea Daepung Group in January 2010 and appointed
Pak Chol-su, a Korean-Chinese businessman in China, as President. According to defector sources, Jang had
the state-run media run a report that the activities of the Daepung Group were ordered by NDC Chairman
Kim Jong-il. As the politics of succession unfolded, O Kuk-ryol faded into the background.
Ken E. Gause
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