$20m Found in NECC Chief Residence

The North Korean law enforcement authorities found US$20 million at the house of Jung Un Op, head of the National Economic Cooperation Committee (NECC) and the National Economic Cooperation Federation (NECF). Jung has reportedly been subject to the authorities’ intense interrogation for the past several months.

A Chinese source, who is familiar with North Korean affairs, said, “Lee Jeh Kang, vice director of the Organization and Guidance Department, an inspection agency under the Workers` Party of North Korea, has taken the lead in questioning Jung and some 80 people regarding where the money came from and how it was going to be used.”

“Due to the high intensity of the authorities’ investigation, the phone was out of the service for days recently between the NECC’s branch office in China and its headquarters in Pyongyang,” the source said. “Most of its staff in China and Russia were repatriated for questioning.”

Experts in North Korean affairs said the money might be funds to carry out the communist regime’s legitimate overseas businesses, such as the affiliates of the NECC, but some of it may turn out to be bribes that Jung took from South Korean businesses participating in the inter-Korean economic projects or has been raised by selling humanitarian aid goods to the domestic and international markets.

“Keeping cash for operation is a common practice for powerful government agencies in the North where financial institutes are underdeveloped,” one expert pointed out. “However, we cannot rule out the possibility that Jung embezzled or redirected inter-Korean economic cooperation funds or aids.”

Meanwhile, Cho Bong-hyun, a senior researcher at the IBK Economic Research Institute, claimed that the NECC, which was an affiliate of the North’s Cabinet, was recently transferred to the United Front Department of North Korea’s ruling Workers’ Party.

“The primary goal of the NECC is revitalizing the economy. Considering that the Cabinet affiliate has become a party affiliate, it illustrates that North Korean leader Kim Jong Il’s willingness to supervise inter-Korean cooperation projects directly and strengthen its control over ideology,” Cho said.

North Korea carried out a systematic and proactive inspection on all of its influential agencies last year. Facing serious economic problems, the communist regime launched intensive investigations into the inter-Korean economic cooperation projects of the United Front Department and foreign-currency earning operations of the party and the military.

kyle@donga.com