North Korean House of Cards

Military First and Hard Currency Operations
In the late 1990s, the North Korean military began to use the
governing doctrine of “Military First” (Songun) to improve its access
to resources. By 2009, news of the imbalance in hard currency
operations within the regime began to trickle out to the international
community. On the occasion of O Kuk-ryol’s appointment as a Vice
Chairman of the NDC in April, articles discussing his family’s ties
to the counterfeiting of $100 “supernotes” emerged. For decades, O
reportedly played the central role in printing and circulating counterfeit
U.S. $100 bills known as “supernotes,” as well as planning
and supervising overseas counterfeiting operations. His family was
also involved. His son, O Se-won, was one of two key overseas
officials involved in counterfeiting. Another relative, Ri Il-nam, was
a Councilor at the North Korean Embassy in Ethiopia and operated
as a “supernote” courier, traveling between Pyongyang, Beijing, and
Addis Ababa.
Much of this hard currency activity became centered in the Central
Committee’s Operations Department, which O Kuk-ryol oversaw. 111
In the mid-2000s, this department siphoned off personnel and
South Korea-focused responsibilities from the KWP United Front
Department (UFD) and Office 35, which are responsible for
espionage activities aimed toward South Korea. With this growth,
the Operations Department also increased its access to resources and
funding streams tied to South Korea and Japan.
In May 2009, the regime streamlined hard currency operations by
removing them from the Party apparatus and placing them under
the newly enhanced RGB, which reports directly to the NDC, and
O Kuk-ryol in particular. 112 As part of this reorganization, the KWP
Operations Department and Office 35 were shifted from the Party
111 Kim Jong-il once proclaimed, “the Operations Department is my ‘flying column’ (byol-dongdae).”
As Director of this Operations Department for twenty years, O Kuk-ryol was the confidant most
trusted by Kim Jong-il. He is the son of O Chung-song, who was one of the famous five brothers of the
anti-Japanese guerrillas.
112 “North Korea Integrates Maneuvering Organs Targeting the South and Overseas Into RGB,”
Yonhap News Agency, May 10, 2009.
Ken E. Gause
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