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Kim Jong Il`s $4 Bln Slush Fund

Posted March. 17, 2010 08:29,   


Corrupt dictators have one thing in common: they hide their slush funds in secret bank accounts in Switzerland. Dictators accumulate illicit money to maintain power and prepare for a contingency in which they lose power. The late Philippine President Ferdinand Marcos was found to have hidden 624 million U.S. dollars in secret Swiss accounts. Former Yugoslavian President Slobodan Milosevic, who died in the middle of a trial by the War Crime Tribunal, reportedly had 3.3 million dollars in a secret Swiss account.

North Korea integrated last year Rooms No.38 and 39 of its ruling Workers’ Party, two bodies that are solely responsible for managing its supreme leader Kim Jong Il’s money. The funds were created with money earned from sales of weapons, narcotics and counterfeit dollars and by making North Koreans work in other countries. Kim uses the money to give presents such as luxury sedans or Rolex watches to his aides to preserve his dictatorship and maintain his family’s ultra-luxurious life. In South Korea, the former Kim Dae-jung and Roh Moo-hyun administrations offered the North around seven billion dollars, including three billion dollars in cash, for inter-Korean dialogue. The Kim Dae-jung government is known to have offered 450 million dollars to Pyongyang to hold the first inter-Korean summit. A significant part of the money probably went to maintain the oppressive communist regime in North Korea.

The U.K. daily Telegraph said most of Kim’s four billion dollars in slush funds held by Swiss banks were transferred to banks in Luxembourg. Pyongyang took action after Bern strengthened regulations on money laundering in the wake of the global financial crisis. The scandal over Kim’s slush funds came to the surface for the first time in 2006, when the U.S. government began imposing financial sanctions on North Korea. An angry Pyongyang said, “This is nonsense.” North Korea also seemed antsy when the U.S. froze 24 million dollars of the communist country’s funds in Macau’s Banco Delta Asia probably because the money belongs to Kim.

“I could not keep my father’s promise of rice and meat soup,” Kim said in January. “I’ll handle the livelihood of our people as soon as possible.” A tenth of his slush funds, or 400 million dollars, can buy one million ton of rice, a volume that North Korea is expected to be short this year. With the money, the North Korean people can eat rice and meat soup for a significant period of time. If they are hungry and grow angry, however, no amount of slush funds can guarantee him a comfortable retirement.

Editorial Writer Kwon Sun-taek (maypole@donga.com)