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The “Sopranos State”? North Korean Involvement in Criminal Activity and Implications for International Security

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The “Sopranos State”? North Korean Involvement in Criminal Activity and Implications for International Security THE “SOPRANOS STATE”? NORTH KOREAN INVOLVEMENT IN CRIMINAL ACTIVITY AND IMPLICATIONS FOR INTERNATIONAL SECURITY SHEENA E. CHESTNUT HONORS PROGRAM FOR INTERNATIONAL SECURITY STUDIES CENTER FOR INTERNATIONAL SECURITY AND COOPERATION STANFORD UNIVERSITY 20 MAY 2005 ii Abstract North Korea has a decades-long record of official involvement in drug trafficking, is reported to produce the world’s best counterfeit $100 bills, and allegedly manufactures counterfeit products such as cigarettes and pharmaceuticals. Amid discussions of the regime’s nuclear and missile programs, economic mismanagement, and appalling human rights record, however, the structure and importance of criminal activity in the D.P.R.K. has been overlooked. This thesis first attempts to establish an empirical basis for assessing North Korean involvement, and second seeks to answer interpretive questions about the nature and significance of the D.P.R.K.’s relationship to criminal activity. It concludes that the D.P.R.K. government is engaged in systematic pursuit of criminal activity distributed across different organizations within North Korea and probably managed by organs of the Central Party Committee. The regime’s pursuit of such activity appears to be primarily for the purposes of financial survival and is highly adaptable. Illicit activity’s role in financing the North Korean regime, and in connecting it to transnational networks of criminal organizations, raise serious implications for a range of international security issues, including the current negotiations and the risk of nuclear transfer. In addition, this behavior calls into question the assumption found in political science literature that criminality is a result of state weakness, and calls for a revised understanding of the relationship between the strength of domestic institutions and state employment of transnational criminal activity. iii iv Acknowledgments This thesis would not have been possible without the support and contributions of many individuals, whose involvement has shaped and guided this research in so many positive ways. I thank all of you for your assistance with the utmost gratitude. From my sophomore year, Professor Chip Blacker, as my undergraduate advisor, has been a source of irreplaceable advice and encouragement. His suggestions that I apply to the CISAC Honors Program was one of many suggestions in which I was challenged and grew intellectually and professionally. His advice, encouragement, and insistence that I hold myself to high standards have been a model for success, and for his time and care in advising me for three years I am especially grateful. For steering me in this research direction I am grateful to Randy Schriver, who taught my Foreign Policy class at Stanford in Washington and talked to me about potential research topics last spring. I also owe thanks and inspiration to Dr. David Asher, with whom I discussed research approaches for this little-known topic and who encouraged me to believe in the value of my research question. Throughout the year, the Center for International Security and Cooperation, and a great many of the people in it, have provided an invaluable home base for this research project. Professor Scott Sagan, as my primary thesis advisor, was an unfailing source of assistance, advice, and support. He has taught me the principles of solid research design and the need for scrupulous examination of multiple dimensions of each problem. For his close reading of my many drafts, his commitment to this project, and his broader lessons about the nature of intellectual inquiry, I am in his debt. To Dr. William Perry, my co-advisor, I extend my thanks for the generosity of his time, his encouragement, and his sense of humor, which bolstered me at difficult moments and opened doors for me not otherwise possible. His character, commitment, and skill in public service are attributes I will emulate for years to come. I also owe a debt of thanks to Deborah Gordon and the Preventive Defense Project, who put me at ease and provided me with invaluable opportunities for arranging meetings and discussing my research in Seoul, Tokyo, and San Francisco. Professor Tino Cuellar’s amazingly fast response to emails always included three more interesting and relevant citations that I never would have encountered without his prompting, many of which found their way into this research. He brought new meaning to the term “interdisciplinary.” Tonya Putnam, the CISAC Honors Program’s TA, provided close reading and one-on-one feedback that helped take the thesis from an interesting paper to a well-crafted (or at least better-crafted) thesis. Their suggestions and comments have made this paper much better than the best I could have envisioned in September. I v would also like to thank the CISAC Honors students for their support and camaraderie throughout the year: Zack Cooper, Nina Hsu, Sohan Japa, Brad Larson, Frances Lewis, Victor Marsh, Jessica McLaughlin, Kevin Siew, Adam Wang-Levine, Chris Williams, and Ming Zhu. This thesis relied on the generosity of over fifty individuals in Washington, Seoul, and Tokyo, who helped steer this project in a range of ways: from casual encouragement over coffee to suggesting source materials to participating in extensive interviews. Because many of these interviewees operate in politically sensitive positions, I have chosen not to list their names here, but extend to each of them my heartfelt thanks. They made this project possible. Funding for these trips was provided by Undergraduate Research Programs, who merit special appreciation for their support of my fieldwork in Washington, Seoul, and Tokyo. The people mentioned above have generously assisted me in obtaining information and developing my thinking on this topic. It goes without saying that they have helped me correct misunderstandings and omissions along the way, and that any remaining errors are my sole responsibility. Finally, a few personal words of thanks are in order. Mike deserves immense credit for tolerating my reclusive weekends, my research trips, and my absentminded fixation on an array of depressing topics with remarkable understanding and good humor. His jokes cheered me up and his encouragement was invaluable. Lastly, my family has defined for me the importance of intellectual life and critical thinking. None of this would have been possible had they not unconditionally loved and supported me (albeit usually with a heavy dose of affectionate teasing!) Mom, Dad, Ian, Brendan, Catherine, and Mike – thank you for your love and support. vi Table of Contents Abstract ........................................................................................................................iii Acknowledgments .........................................................................................................v Table of Contents ........................................................................................................vii List of Figures...............................................................................................................ix Abbreviations ................................................................................................................x Chapter One:.................................................................................................................1 Introduction, Analytic Approach, and Hypotheses .....................................................1 Introduction.................................................................................................................1 Methodology...............................................................................................................3 Hypotheses..................................................................................................................8 Significance .............................................................................................................. 11 Chapter Two: .............................................................................................................. 13 Review of Academic Literature & Hypothesis Development ....................................13 Overview...................................................................................................................13 Extent of State Control ..............................................................................................14 Potential State Motivations........................................................................................28 Testing the Hypotheses..............................................................................................37 Chapter Three:............................................................................................................40 North Korean Involvement in Drug Trafficking .......................................................40 Introduction............................................................................................................... 40 Drug Smuggling........................................................................................................40 Trend One: State Involvement in Trafficking..........................................................43 Trend Two: Development of State Policy ...............................................................52 Trend Three: Regionalization ................................................................................62 Trend Four: Change in Type of Drug ....................................................................64
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