PHOTO-ILLUSTRATION FOR TIME BY JOHN WHITE

Kim's Rackets
	To fund his lifestyle—and his nukes—Kim Jong Il helms a vast criminal network
	By Anthony Spaeth

Posted Monday, June 2, 2003; 21:00 HKT
When Ju Song Ha was teaching high school in Chongju, a farming town in northeastern North Korea, classes ended at 2 p.m.—and then the students got to work. Ju marched the teens into fields blooming with pink and white flowers. Working in pairs, one student cut into the bulb of a waist-high plant and the other scraped the sticky white resin into a cup supplied by the North Korean government. They worked four or five hours each afternoon among those plants that, by North Korean government fiat, are known as white bellflowers. In fact, they were poppy plants—and the students were harvesting that year's heroin crop for Dear Leader Kim Jong Il.

Much may be mysterious about hermetic North Korea, but some facts are well known. Kim has weapons-capable missiles and a million-strong army breasting the 38th parallel. He has the material for nuclear weapons, might have several nuclear bombs, and threatens to destroy Seoul—South Korea's capital—if anyone tries to forcibly take them away. Beyond the security threat North Korea poses to its neighbors militarily, however, is another clear and present danger: Kim Jong Il props up his destitute failed state with international criminal enterprises that would be the envy of any Mafia don.

Missile sales to other rogue nations constitute just a fraction of Kim's legal, if questionable, operations. His country is also a hotbed of counterfeiting and car smuggling. Perhaps the biggest money-spinner, though, is drugs—chiefly the manufacture and export of heroin and methamphetamines. North Korea supplies drugs to Russia and China, South Korea and Taiwan. Meth manufactured in the Democratic People's Republic of Korea (D.P.R.K.) accounts for a third of all such drugs sold in Japan, according to an expert on the trade—which puts their street value at $3 billion. Since 1997, Japan has seized almost 1,500 kilos of methamphetamines believed to have originated in the North. "I don't doubt that this is only a very tiny tip of the iceberg," says Takahiko Yasuda, director of Japan's National Police Agency's drug control division. On the streets, Japanese authorities easily recognize North Korean contraband because the quality is superb and the packaging impeccable. Japan's druggies have come to depend on that. "North Korean drugs?" says Tsuko, a recovering drug addict in a Tokyo rehab center. "They've been around for at least 20 years."

And for more than two decades the world has let Kim get away with it, despite serial busts of North Korean diplomats acting as well-dressed mules and regular seizures of heroin and methamphetamines in North Korean packing crates labeled honey or kidney beans. The reason: the North's military belligerence and more recently its nuclear capabilities and missiles were greater worries. But as the U.S. and its allies look to rein in Kim's A-bomb program, it is becoming increasingly hard to shrug off his country's drug trafficking as little more than a bad habit.

The U.S., seeking ways to pressure Kim to disarm, is debating international economic sanctions, measures that could include going after his rackets. In recent weeks, members of U.S. President George W. Bush's Administration have started to make a connection between the North's criminal commercial activities and the country's nuclear weapons development, laying the first bricks in a foundation of justification and support for the interdiction of North Korean shipping. Two weeks ago, Andre Hollis, U.S. Assistant Secretary of Defense for Counternarcotics, told a congressional committee that "North Korean officials may be using illicit trading activities to provide much-needed hard currency to fund its army and weapons-of-mass-destruction programs." Meanwhile, U.S. Secretary of State Colin Powell said in the Senate that any rapprochement with a North Korea that "thrives on criminality" would have to address both nukes and Kim's shady dealings.

For the record, Washington officials point out there's no direct evidence to link Kim himself to the drug trade—that it's possible ordinary criminals or a rogue military organization are slanging dope on their own, without formal state direction. But statements from people who have fled the North and an array of circumstantial evidence paints a more likely picture: the North is a narco-state in which all aspects of the drugs operation—from schoolchildren toiling in poppy fields to government-owned processing plants to state-owned cargo ships and trading companies—are controlled by Kim. "Kim Jong Il and his coterie own everything in North Korea," says Nick Eberstadt, an expert on North Korea's economy at the American Enterprise Institute in Washington, D.C. "This is the most perfectly totalitarian society ever created."

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