North Korean House of Cards

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• 2.16 Fund, also mentioned in Kim Jong-il’s will, refers to both the Party and secret funds. The Party funds are generated from Party membership dues. According to the last public figures, the membership of the KWP was approximately 3 million. A portion of the annual dues goes to the 2.16 Fund managed by Ri Cheol-ho, a member of Kim Jong-un’s Personal Secretariat. • Party organization and administrative unit taxes also contribute to funds. Each Party and state body pays a three to five percent tax to the 2.16 Fund. This reportedly accounts for approximately $100-200 million per year. • Revenue, interest, and earnings generated from illegal transactions on the funds managed by General Bureau 73 and Office 38 result in approximately $200-300 million per year for the 2.16 Fund. • Foreign investments generate approximately $200-400 million per year for the 2.16 Fund. • Bank transactions, including those from the Foreign Trade Bank, generate approximately $100-200 million per year for the 2.16 Fund. • Mandatory embassy tributes account for approximately $50-100 million per year for the 2.16 Fund. • Second Economic Committee and associated defense industry funds transferred to the 2.16 Fund total approximately $100-200 million per year. Each of the components of the regime involved in the generation of hard currency is responsible for meeting a mandated target of revenue to be turned over to the offices of the Supreme Leader through General Bureau 73. 463 These are considered loyalty funds. Most of this money comes from the operations of front companies tied to these regime organizations. Failure to meet the mandated targets can result in institutional and individual punishments. • The KWP FAD has a target of $20 million per year. • Office 39 has a target of $20 million per year. 463 Author’s discussion in 2014 with sources in Seoul with knowledge of North Korean hard currency operations. Under Kim Jong-il, his style of leadership fomented competition among leadership units, which played out in hard currency operations. Because the pressure was fierce to show loyalty through funds given over to Kim, there was little coordination and delineation between units. This inevitably led to turf wars, which continued to grow under Kim Jong-un. Ken E. Gause 211
• The KWP Administrative Department had a target of $20 million per year. 464 • The KWP OGD is tied to the Supreme Leader’s personal apparatus. It is not clear if it has a mandated target. 465 • The GC is tied to the Supreme Leader’s personal apparatus. It is not clear if it has a mandated target. • The KPA GPB has a target of $10 million per year. • The KPA GSD has a target of $10 million per year. • The MPAF has a target of $10 million per year. • The MSC has a target of $10 million per year. • The RGB has a target of $10 million per year. 466,467 • The SSD has a target of $10 million per year. • The MPS has a target of $10 million per year. • Other Party and administrative offices (such as KWP LID and Pyongyang City Administration) have targets of $2 million per year. The final source of revenue for the Supreme Leader comes from a one percent tax on the People’s Economy. 468,469 The total amount that goes into a governing 464 Since the dissolution of the KWP Administration Department, its hard currency operations (and accompanying loyalty funds) have dispersed to several other organizations within the regime. 465 If the stories of Choe Ryong-hae assuming the position of KWP Secretary for the OGD are true, this would be the first time the OGD has fallen under the control of someone other than a Kim family member. This could result in the OGD being given a mandated target for loyalty payments. 466 “Dangers in a Cutthroat World,” Daily NK, September 2, 2011. According to some sources, soon after its creation in 2009, the RGB advanced its hard currency operations into China, sending more than 100 operatives there under the cover of monitoring Sino-South Korean relations. This move apparently caused problems for other China-based hard currency operations run by the Ministry of Foreign Trade, the SSD’s General Security Bureau, the MPS, and the MPAF. 467 “North Korea Requiring Diplomats to Raise Millions in U.S. Currency,” UPI, September 29, 2015. In the lead up to the celebration of the 70th anniversary of the founding of the Party in October 2015, reports surfaced in the international media that North Korean RGB agents in the field were required to deliver $200,000 in “kickback” money to the regime or face penalties. According to Japanese reporting, this led many spies to turn away from their normal duties to focus on generating foreign currency. 468 The GDP of North Korea is estimated to be $40 billion according to the International Trade Office of Korea. The domestic economy has either contracted or grown at one percent in recent years, according to South Korean government estimates based on limited data, with annual exports of about $3 billion, falling well short of the total amount of imports. 469 “Pyongyang Imposes Duty on Diplomats To Obtain Foreign Currency To Raise Funds To Celebrate 10 October 70th Anniversary of Founding of Workers’ Party of Korea,” Sankei Shimbun, September 29, 2015. In an indication of the Royal Economy’s declining condition, Kim Jong-un placed increasing pressure on the North Korean diplomatic corps in the summer of 2015 to raise funds ahead of the Party’s 70th anniversary in October. Each embassy staff member was responsible for raising $1 million in U.S. currency to be passed to the regime. Average North Korean citizens were also asked to contribute $6 per household (twice the monthly salary of the average North Korean worker) to offset the celebration expenses. The Committee for Human Rights in North Korea 212
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North Korean House of Cards Leaders
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Copyright © 2015 Committee for Hum
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Jack David Senior Fellow, Hudson In
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3. The Regent Structure............
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d. Ministry of People’s Security.
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II. PREFACE After his seminal 2012
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the reader that many are purged bec
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IV. ABOUT THIS STUDY There are nume
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VI. EXECUTIVE SUMMARY Merriam-Webst
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ultimate decision maker and sole so
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humanity; in order to understand cr
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32. NIS: South Korean National Inte
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egent structure would begin to chan
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However, there is very little evide
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IX. SECTION ONE: NORTH KOREAN LEADE
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All Party members, military men, an
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Dressed in black, gloveless, and ba
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choreography of the transfer of pow
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suffered a stroke. 18, 19 A month l
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the GPB in the Kim Jong-il era, beg
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2009 from Chief of the GSD to Comma
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posting, Ri had been the Fifth Corp
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Days after Jang Jong-nam was identi
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4. Civil-Military Relations by Mid-
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above, especially the purge of Ri Y
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leaders include Choe Ryong-hae, Kim
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of the military. More than that of
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B. CHAPTER TWO: THE PURGE OF JANG S
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afforded Jang the opportunity to me
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and merged into the RGB as Bureaus
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to as the éminence grise, who was
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a. Kim Jong-il’s Will In 2012, de
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A second rumor suggests that Jang
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KWP OGD, and the SSD, to construct
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ut his pleas went unanswered. At th
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eferred to him as an “unparallele
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out of the picture, 163 the connect
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ankings in October 2013 and then fe
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Jong-il, such as Ri Su-yong (Ri Cho
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ones, lowering the average age of t
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the regime. Throughout 2013, Choe a
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4. Kim Jong-un and the Wider Leader
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Armed Forces, 202 had been executed
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Name Position(s) Comments Kim Solso
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Name Position(s) Comments Kim Songn
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Name Position(s) Comments Colonel G
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Table 2: Second Echelon of Power Na
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Name Position(s) Comments Miltary/
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Name Position(s) Comments General K
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Table 3: Third Echelon of Power Nam
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Name Position(s) Comments Ju Kyucha
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Name Position(s) Comments General P
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Name Position(s) Comments Colonel G
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Name Position(s) Comments Ro Tu-cho
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Table 4: Fourth Echelon of Power Na
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Name Position Comments Lieutenant G
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Name Position Comments Lieutenant G
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Name Position Comments Hong Yongchi
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Name Position Comments Jo Thae-san
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Name Position Comments Government R
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Name Position Comments Kim Choljin
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Name Relation Comments Ri Il-hyok K
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Name Relation Comments Cha Cholma S
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While there is debate within the co
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• The Royal Economy. This chapter
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within the leadership in the mid-19
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ase of power. 261 Decision-making o
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The Tenth SPA convened in Pyongyang
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system of socialism.” 273 For man
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Leader. However, this will not last
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Image 11: Kim Jong-il’s signature
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Image 13: National Security meeting
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Image 15: A March 13, 2013 military
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. Kim Jong-un’s Role as Decision
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The Friday meetings focus on milita
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and its Presidium organize and dire
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KWP Charter, the CMC “discusses a
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worldview. 312 He would hone these
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constraints established by his fath
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Fully assuming the role of Supreme
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As the guidance in Kim Jong-il’s
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1. The Personal Secretariat under K
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of Kim’s death in 2011, it is rum
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Kim Jong-il Secretariat was not an
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Page 171 and 172: a. Personal Secretariat Personnel a
Page 173 and 174: In 2013, South Korean media reports
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Page 185 and 186: C. CHAPTER SIX: THE ROYAL ECONOMY
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Page 189 and 190: Following the creation of Office 39
Page 191 and 192: The Early European Connection In th
Page 193 and 194: numerous subordinate trade and fore
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Page 211 and 212: Jang’s Channel to China The Korea
Page 213 and 214: Chart 10: Jang’s Channel into the
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Page 225 and 226: Chart 12: Jang’s Tapping into Mil
Page 227 and 228: In addition to these reforms, Kim J
Page 229 and 230: Despite the regime’s efforts to s
Page 231 and 232: Night of the Long Knives. Saddam Hu
Page 233 and 234: In the months following the Party c
Page 235 and 236: According to South Korean sources,
Page 237 and 238: In April 2012, the regime made a nu
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Page 241 and 242: focus of the meeting was tied to lo
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Page 249 and 250: Name Post Relationship to the OGD M
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Page 257 and 258: i. Structure The headquarters of th
Page 259 and 260: Chart 18: Organizational Chart of t
Page 261 and 262: Pyongyang Anti-Aircraft Artillery C
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Page 265 and 266: ii. Cordon of Security: Relationshi
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• The Eighth Bureau (Border Secur
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Chart 21: Organizational Chart of t
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d. Ministry of People’s Security
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chain of command and is responsible
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olstering internal security. Provin
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Chart 22: Organizational Chart of t
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associate, these fortunes began to
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offices: the Cadre Department, the
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Jo Kyong-chol seated at the far lef
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XI. CONCLUSION To commemorate the 1
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Others see a ruthless regime that i
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it remains to be seen whether this
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continues to create the image of a
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had been executed by anti-aircraft
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• General Ri Yong-gil (60) has be
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2. Party • Kang Sok-ju (76) has b
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• Kim Song-nam (62) is an alterna
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domestic and social issues .668 He
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may occasionally be able to reach o
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Committee list.At the Third Session
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1970s, 692 but his career was resur
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Vice Chairman of the NDC, O Kuk-ryo
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of communication to Kim Jong-un lik
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• Ju Kyu-chang (87) has been an a
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General Pak as his successor withou
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as the “Storm Corps.” He first
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present for Kim Jong-un’s guidanc
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senior leadership are evident in hi
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on debt settlement issues with Russ
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Date Visit Gift (as described in No
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Date Visit Gift (as described in No
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XIV. APPENDIX C: NORTH KOREAN MILIT
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Insignia Title/Name 소좌 (So-jwa)
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B. KOREAN PEOPLE’S ARMY NAVAL FOR
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Insignia Title/Name 상위 (Sang-wi
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C. KOREAN PEOPLE’S ARMY AIR FORCE
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Insignia Title/Name 상위 (Sang-wi
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XV. BIBLIOGRAPHY A. Books and Journ
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54. Cathcart, Adam. “Thrice-Curse
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117. “Is Kim Jong Un Playing Musi
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191. Lee, Gyo-Gwan. “Kim Jong-il
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264. “North Korea’s Kim Jong-un
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Committee for Human Rights in North
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North Korean House of Cards

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