Kim Il Sung's Money Pipeline

By Edward W. Desmond/Tokyo

Every few weeks a sleek white ship sails from Japan to the North Korean port of Wonsan. On board are scores of Koreans eager to visit relatives -- along with a cargo that until recently often included such high-tech items as powerful computers and troves of cash, much of it exported in violation of Japanese law. Because Tokyo is reluctant to antagonize either the Kim Il Sung government or the North Koreans who live in Japan, customs officials had previously turned a blind eye.

Any effort to choke the Kim regime economically would have to crack down on the traffic between Pyongyang and the liner's sponsor, Chongryun, the secretive 250,000-member General Association of Korean Residents in Japan, which is under the direct control of Pyongyang. The group is at the heart of a shadowy fund-raising effort that sends between $600 million and $1 billion annually to North Korea, most of it for the Kim regime itself. The funds are Pyongyang's biggest source of hard currency. Japanese intelligence says Chongryun also covertly purchases equipment for the North's nuclear and missile programs.

The Japanese are worried that an attempt to curb Chongryun might spark violent reprisals, even sabotage. At the least, they expect angry street protests charging that Japan is once again oppressing Koreans -- an accusation that stings because many of the 1.5 million Koreans in Japan at the end of World War II were conscripted laborers, and those who stayed still suffer discrimination. In the 1950s and '60s, many believed that Kim Il Sung's North Korea, which was faring better than the chaotic South, was the best bet for Korea's future. About 40% of the 600,000 Koreans who stayed in Japan swore allegiance to Chongryun -- and Kim -- as the defenders of Korean interests.

Chongryun has since become a substantial force. It has built 140 schools and a university for the Korean community, where 20,000 young people study the basics -- and the wisdom of Kim Il Sung. The association has established a powerful credit union and launched numerous publications. By the mid-1970s, Chongryun Koreans were starting to prosper; they now control most of Japan's pachinko parlors. Former Chongryun officials say North Korea made it clear that the well-being of loved ones back home depended on how often -- and how much -- their relatives in Japan were willing to contribute to the Kim regime. The blackmail money goes through Chongryun to the government.

Though association officials deny the charges, Japanese officials claim that the group was integral to North Korean intelligence operations through the 1970s. In the early '80s, the officials say, Chongryun shifted focus to concentrate on siphoning foreign exchange into the North.

But none of this assistance guaranteed the safety of relatives in Korea. An unknown number wound up in concentration camps or before firing squads. As families in Japan have learned of their fate, Chongryun's hold over its members has loosened. A small but vocal group of former members now openly attacks the organization, despite threats from its hierarchy.

Chongryun is fighting back by arguing that Washington, Tokyo and Seoul have jointly conspired to drive away its supporters. The U.S. has been pressing Japan hard to tighten export controls. If sanctions are approved, Tokyo will have to take direct action to shut down the money and technology pipeline -- which it has said it would do. A government official admits that Chongryun could still route funds and cargo through third countries. Yet even for the inured North Koreans, the loss of so much support would take a toll.

With reporting by Hiroko Tashiro/Tokyo