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S. Hrg. 108–157

DRUGS, COUNTERFEITING, AND WEAPONS

PROLIFERATION: THE NORTH KOREAN

CONNECTION

HEARING

BEFORE THE

FINANCIAL MANAGEMENT, THE BUDGET, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE

OF THE

COMMITTEE ON 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MAY 20, 2003

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

PETER G. FITZGERALD, Illinois 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

RICHARD J. DURBIN, Illinois 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

DARLA D. CASSELL, Chief Clerk

FINANCIAL MANAGEMENT, THE BUDGET, AND INTERNATIONAL 

SECURITY SUBCOMMITTEE 

PETER G. FITZGERALD, Illinois, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

DANIEL K. AKAKA, Hawaii 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL RUSSELL, Staff Director 

RICHARD J. KESSLER, Minority Staff Director 

AMANDA LINABURG, Chief Clerk 

(III)

C O N T E N T S 

Opening statement: Page 

Senator Fitzgerald ............................................................................................ 1

Senator Akaka .................................................................................................. 6

Senator Lautenberg .......................................................................................... 11

WITNESSES 

TUESDAY, MAY 20, 2003

Andre D. Hollis, Deputy Assistant Secretary for Counternarcotics, U.S. Department of Defense ............................................................................................. 3

William Bach, Director, Office of Asia, Africa, and Europe, Bureau of International Narcotics and Law Enforcement Affairs, U.S. Department of State 5

Nicholas Eberstadt, Ph.D., American Enterprise Institute .................................. 14

Larry M. Wortzel, Ph.D., Heritage Foundation .................................................... 16

Robert L. Gallucci, Ph.D., Georgetown University Walsh School of Foreign 

Service ................................................................................................................... 18

Former North Korean High-Ranking Government Official, Identity Protected . 24

Bok Koo Lee [Alias], Former North Korean Missile Scientist ............................. 27

ALPHABETICAL LIST OF WITNESSES

Bach, William: 

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 39

Eberstadt, Nicholas, Ph.D.: 

Testimony .......................................................................................................... 14

Prepared statement .......................................................................................... 45

Former North Korean High-Ranking Government Official: 

Testimony .......................................................................................................... 24

Prepared statement .......................................................................................... 70

Gallucci, Robert L., Ph.D.: 

Testimony .......................................................................................................... 18

Prepared statement .......................................................................................... 69

Hollis, Andre D.: 

Testimony .......................................................................................................... 3

Prepared statement .......................................................................................... 36

Lee, Bok Koo: 

Testimony .......................................................................................................... 27

Prepared statement .......................................................................................... 73

Wortzel, Larry M., Ph.D.: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 50

APPENDIX

List entitled ‘‘North Korean Provocations, 1958–2003,’’ submitted for the 

record by Senator Fitzgerald ............................................................................... 33

(1)

DRUGS, COUNTERFEITING, AND WEAPONS 

PROLIFERATION: THE NORTH KOREAN 

CONNECTION 

TUESDAY, MAY 20, 2003

U.S. SENATE,

SUBCOMMITTEE ON FINANCIAL MANAGEMENT,

THE BUDGET, AND INTERNATIONAL SECURITY,

OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:08 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Peter G. Fitzgerald, 

Chairman of the Subcommittee, presiding. 

Present: Senators Fitzgerald, Akaka, and Lautenberg. 

OPENING STATEMENT OF SENATOR FITZGERALD 

Senator FITZGERALD. I am going to call the Subcommittee to 

order. Senator Akaka is on his way over, but in the interest of 

time, we want to begin now. There will be a vote I believe at 2:20 

p.m.. 

Today, the Governmental Affairs Subcommittee on Financial 

Management, the Budget, and International Security is holding a 

hearing on Drugs, Counterfeiting, and Weapons Proliferation: The 

North Korean Connection. 

I would like to welcome our distinguished witnesses who are here 

today, including two North Korean defectors. They will be on the 

third panel. 

I would like to take a moment, at the outset, to describe the logistics of the hearing for the benefit of members of the media and 

those in the audience. The hearing will be held in open session 

through the first round of panel 3 that includes the North Korean 

defectors. Those witnesses have asked that we protect their identities. Therefore, screens will be installed at the witness table for 

panel 3, and we ask that members of the media and the public not 

attempt to breach the screens. 

The defectors have also indicated their willingness to disclose additional highly sensitive information to the Subcommittee in a 

closed session. Therefore, after the first round of questions in open 

session, the Capitol Police will secure the room for a closed, unclassified session. At this time, members of the media and the audience 

will be asked to leave the hearing room. 

Thank you in advance for your cooperation. 

Today, we will hear testimony that indicates or suggests: One, 

that the North Korean Government runs a drug production and 

2

1The list entitled ‘‘North Korean Provocations, 1958–2003,’’ submitted for the record by Senator Fitzgerald appears in the Appendix on page 33. 

trafficking business and essentially functions as a state-level crime 

syndicate; 

Two, that North Korea is using the hard currency generated by 

its state-level crime syndicate to fund its military and weapons programs, including possibly its nuclear weapons program; and, therefore, 

Three, the drug production and trafficking business run by the 

North Korean Government or apparently run by the North Korean 

Government poses a threat to international security. 

While it is certainly true that in the past we have seen governments function like crime syndicates—the Taliban Government in 

Afghanistan comes to mind—the critical difference in this case is 

evidence that the North Korean regime is using proceeds from 

criminal activities to fund a robust weapons program that already 

has a nuclear capability. 

The two North Korean defectors have never appeared before Congress until today. Their testimony will establish that North Korea 

produces poppy and manufactures heroin for sale abroad. The proceeds from these sales, as well as the proceeds from sales of military weapons, fund North Korea’s large military and nuclear program that pose a growing threat to international security. 

The North Korean military has over 1 million active troops and 

approximately 4.7 million reserves. By comparison, South Korea 

has approximately 686,000 active troops and approximately 4.5 

million reserves. The United States has roughly 38,000 troops in 

South Korea. North Korea also has over 200 Scud missiles and 

2,500 rocket launchers, many of which can carry chemical weapons. 

Given the nexus between its state-level drug production and trafficking business and its weapons programs, North Korea is essentially a crime syndicate with nuclear bombs or, as one commentator 

put it, ‘‘It is a mafia masquerading as a government.’’

The role of a government is to protect its citizens from criminals, 

but in the case of North Korea, it appears that the government is 

the criminal. Since 1976, there have been over 50 documented incidents, many involving the arrest or detention of North Korean diplomats directly linking the North Korean Government to drug production and trafficking. 

And I would like to, at this point, refer to the poster we have 

over there by the video screen, and I would like to include that list 

in the record.1 The poster highlights some of these activities. Without objection, I ask that this list, prepared by the Congressional 

Research Service be included in the record. 

There even have been reports, which one of our witnesses will 

confirm today, that North Korea was limiting food crop production 

in favor of poppy crop production. In North Korea, it appears that 

the government is the drug lord. 

The world witnessed a graphic example of North Korea’s role in 

drug trafficking last month when, on April 20, Australian police arrested 26 crew members of a North Korean ship called Pong Su 

after being spotted trying to off-load approximately $80 million of 

heroin to a fishing boat off the coast of Australia. The Australian 

3

1The prepared statement of Mr. Hollis appears in the Appendix on page 36. 

Navy and police boats forced the 4,000-ton Pong Su into Sydney 

Harbor, after it was chased for 4 days and several hundred miles 

along Australia’s East Coast. 

Australian officials have now identified one of the crew as a senior member of the North Korean Workers Party and continue to investigate additional links between the captured freighter and the 

North Korean Government. 

I would now like to ask staff to play a news video produced by 

ONE News of New Zealand regarding the capture of the Pong Su. 

[Video played.] 

Senator FITZGERALD. The Australian incident poses grave threats 

and challenges to the Northeast Asia region, as well as to the international community, including the United States. Therefore, one 

question we will explore today is whether North Korean is exporting deadly drugs so it can build even deadlier weapons of mass destruction. 

Since Senator Akaka is not here yet—we will turn to the panelists. And if Senator Akaka arrives imminently, we may break to 

allow him to give his opening statement. We are pleased to have 

with us two senior officials from the Department of Defense and 

the Department of State. 

Andre Hollis serves as the deputy assistant secretary of Defense 

for Counternarcotics. In this capacity, Mr. Hollis develops the Defense Department’s counternarcotics policy, manages over 100 programs that support counternarcotics efforts in the United States 

and abroad and oversees a budget in excess of $800 million. 

William Bach currently serves as the Director of the Office of 

Asia, Africa and Europe for the State Departments’ Bureau of 

International Narcotics and Law Enforcement Affairs. He has held 

this position since 2001 and manages a budget of over $200 million. 

Thank you both for being here today. In the interest of time, we 

ask that you summarize your statements, if possible, and we can 

simply take your longer statements and include them in the record. 

Mr. Hollis, would you like to proceed with your opening statement? 

TESTIMONY OF ANDRE D. HOLLIS,1 DEPUTY ASSISTANT SECRETARY FOR COUNTERNARCOTICS, U.S. DEPARTMENT OF 

DEFENSE 

Mr. HOLLIS. Thank you, Mr. Chairman, and thank you for the 

opportunity to speak before you this afternoon about our concerns——

Senator FITZGERALD. Could you pull the microphone a little bit 

closer to your face, please. Thank you. 

Mr. HOLLIS. Thank you, again, sir. I am pleased to appear before 

you to discuss concerns about North Korea’s involvement in illicit 

drug trafficking. 

Over the past several years, as you noticed this afternoon, there 

have been numerous reports of drug seizures linked to North 

Korea, primarily of methamphetamine and heroin destined for 

Japan, Taiwan, China, Russia, and elsewhere. 

4

The recent seizure, 50 kilograms of heroin transported by the 

Pong Su, again, as you mentioned, demonstrates that elements 

with North Korea are extending their illicit activities south into 

Australian waters. This incident underscores the need for multilateral, multi-agency efforts to detect, monitor, and interdict North 

Korean drug trafficking. 

I would like to summarize a point that you very well mentioned, 

sir, and that is that the Pong Su seizure does, in fact, heighten our 

concern that North Korean officials may be using illicit trading activities to produce much needed hard currency. 

It is clear that any illicit trafficking involving North Korea is a 

potential threat to the security of our friends and allies in the region and to the United States. The Australian Government, most 

notably its foreign minister, have called upon multilateral efforts to 

work to combat drug smuggling from North Korea. 

We support that call, and we stand ready, as part of the interagency of the U.S. Government, to work with our friends and allies 

in the region. To that end, officials within the Department of Defense, State, Justice, the Drug Enforcement Administration, and 

the intelligence community are reviewing what types of assistance 

that we are authorized to provide and how to provide that should 

our friends and allies in the region request it. 

Practically speaking, I would like to summarize for you some of 

the authorities that the Department of Defense has given to provide support to our partner nations in terms of countertrafficking 

in drugs. 

First and foremost, we are authorized to provide support to law 

enforcement agencies and military personnel with counterdrug responsibilities. We provide training, we upgrade equipment, we 

maintain a series of intelligence initiatives, both in terms of collection analysis and dissemination of intelligence among law enforcement, military and intelligence services, command and control 

systems that allow our allies and friends to communicate that information real time, as well as the ability to assist them with 

minor infrastructure. 

The Department and our agency counterparts are fully capable 

and ready to support regional partners with training, facilities, intelligence, and organizational experience to counter the threat of illicit trafficking that may be coming from North Korea. 

The Department of Defense with, again, our interagency partners, have a long history of bringing together interagency capabilities and personnel to assist and to fuse our efforts to fight drug 

trafficking. The interagency drug task forces that exist in both 

Florida, and Alameda, California, and the Congress has generously 

funded are wonderful examples of the interagency fusion that 

might be appropriate for East Asia. 

These task forces bring together law enforcement, intelligence 

and military services to work jointly with partner nations to battle 

the trafficking of a variety of substances, including drugs. In particular, sir, this approach has been very good at dealing with the 

trafficking threat in Southeast Asia, Thailand, and Malaysia, in 

particular. 

In sum, sir, we are working closely with our interagency allies. 

I know that the State Department is talking to our friends and alVerDate 0ct 09 2002 14:59 Oct 21, 2003 Jkt 088250 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\88250.TXT SAFFAIRS PsN: PHOGAN
5

1The prepared statement of Mr. Bach appears in the Appendix on page 39. 

lies in the region about what we might be able to do in assistance, 

and as we continue to work to that end, we will, of course, continue 

to consult with the Congress. 

I look forward to accepting and answering all of your questions. 

Senator FITZERALD. Thank you, Mr. Hollis. Mr. Bach. 

TESTIMONY OF WILLIAM BACH,1 DIRECTOR, OFFICE OF ASIA, 

AFRICA, AND EUROPE, BUREAU OF INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, U.S. DEPARTMENT OF STATE 

Mr. BACH. Good afternoon, Mr. Chairman. 

Thanks for this opportunity to testify before the Subcommittee 

on the subject of narcotics trafficking and other criminal activity 

with a connection to the Democratic People’s Republic of Korea. My 

oral testimony will summarize the written report that you already 

have. 

For some 30 years, officials of the DPRK and other North Koreans have been apprehended for trafficking in narcotics and other 

criminal activity, including passing counterfeit U.S. notes. Since 

1976, there have been at least 50 arrests and drug seizures involving North Koreans in more than 20 countries around the world. 

More recently, there have been very clear indications, especially 

from a series of methamphetamine seizures in Japan, that North 

Koreans traffic in, and probably manufacture, methamphetamine 

drugs. 

Given the tight controls in place throughout North Korea and the 

continuing seizures of amphetamines and heroin suspected of originating from North Korea, one must ask how any entity, other than 

the state, could be responsible for this high-volume drug trafficking. 

Much of what we know about North Korean drug trafficking 

comes from drug seizures and apprehensions abroad. A typical incident of drug trafficking in the mid 1970’s, when trafficking by 

North Koreans first emerged as a significant problem, would involve a North Korea employee of a diplomatic mission or a state 

enterprise would be apprehended with illicit drugs by police or border crossing officials. 

In a very recent case, noted by this Subcommittee already, Australian Federal police reported that on the night of April 16 of this 

year, police observed the North Korean vessel Pong Su relatively 

close to the shore off the coast of Victoria. The police followed two 

ethnic Chinese suspects on the shore as they left the beach and 

headed for a nearby hotel. The next morning, the two suspects 

were arrested with 50 kilograms of heroin. The ethnic Chinese suspects, and the captain and crew of the Pong Su have been charged 

with narcotics trafficking and a protest has been lodged with 

Pyongyang by Canberra. 

By 1995, North Korea had begun importing significant quantities 

of ephedrine, the main input for methamphetamine production. At 

about this time, methamphetamine was emerging as a drug of 

choice all over Asia. During the next several years, the Japanese 

seized numerous illicit shipments of methamphetamine that they 

6

believed originated in North Korea, and most of these seizures, 

traffickers and North Korean ships, rendezvoused at sea in North 

Korean territorial waters for transfer of the narcotics to the Japanese traffickers’ vessels. Taiwanese authorities also seized several 

shipments of methamphetamine and heroin that had been transferred to the traffickers’ ships from North Korean vessels. 

In both the cases of Japan and Taiwan, large quantities of drugs 

were transferred from North Korean state-owned ships, on occasion 

from North Korean naval ships, to the traffickers’ ships. 

The U.S. Secret Service Counterfeit Division is aware of numerous cases of counterfeiting with North Korean connections. Typical 

of such cases was one reported in Macao in 1994, when North Korean trading company executives, who carried diplomatic passports, 

were arrested for depositing $250,000 in counterfeit notes in a 

Macao bank. There are numerous other counterfeiting incidents 

with links to Macao banks, North Korea and North Korean diplomats. 

North Korean traffickers have links to Russian, Japanese, Taiwanese, China, Hong Kong, and Thai organized crime elements. In 

all cases, the relationships began as one of wholesaler with retailer. 

North Koreans with large quantities of drugs to sell have sold them 

to criminal groups with the retail networks necessary to move the 

drugs to consumers. This wholesaler/retailer relationship seems to 

have evolved in recent years. Incidents such as the Pong Su arrest, 

for example, demonstrate that North Korean traffickers are becoming involved farther down the trafficking chain. 

Mr. Chairman, I thank you and the Members of the Subcommittee for your attention, and I would be pleased to answer any 

of your questions. 

Senator FITZGERALD. We are going to have to take a brief recess 

because a vote has begun. If you gentlemen could be kind enough 

to wait for me to return, and perhaps Senator Akaka will come 

here after the vote, it will be just a few more minutes, and we will 

be right back. We will ask our questions, and then we will excuse 

you. 

Thank you very much for your testimony. We will take a brief 

recess. 

[Recess.] 

Senator FITZGERALD. We will resume the Subcommittee hearing 

now. I appreciate your patience, and sorry to keep you waiting as 

I voted. 

Senator Akaka, the Ranking Member, has joined us, and, Senator Akaka, I would like to give you the opportunity to make your 

opening statement. Thank you for being here. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Mr. Chairman. I appreciate what you are doing with the Subcommittee and your leadership in this area. I want to ask that my full statement be placed 

in the record, and I will make a brief statement. 

Senator FITZGERALD. Without objection. 

[The prepared opening statement of Senator Akaka follows:]

7

PREPARED OPENING STATEMENT OF SENATOR AKAKA 

Mr. Chairman, I appreciate the opportunity to be here this afternoon for the first 

hearing of this Subcommittee under your leadership. I am also pleased that the first 

hearing is on an issue relating to international security. Our Committee and this 

Subcommittee have a long history of engagement on these issues, and I am glad you 

are continuing both this tradition and this responsibility. 

I share your concern over the situation in North Korea. We do not need to invade 

North Korea to find proof of its involvement in weapons and drug trafficking. 

This hearing highlights a critical issue in international efforts to control the 

spread of weapons of mass destruction: The emergence of new suppliers of WMD 

technology and expertise. North Korea, for example, has exported ballistic missiles 

and related technology to Egypt, Syria, Iran, Libya, and Pakistan. Missile exports 

are a major source of hard currency for North Korea. There is little sign North 

Korea will end its exports unless under either a positive or negative incentive. 

North Korea is also capable of producing chemical and biological weapons although 

there has been no evidence to date that North Korea has exported either of these 

types of weapons or the technology to produce them. We now fear that North Korea’s nuclear weapons program will lead it to export both technology and plutonium 

to other states. 

I commend recent efforts by the administration to engage North Korea in a dialogue on these issues. I wish that this engagement had occurred sooner and had 

built on the momentum left from the previous administration which seemed close 

to achieving an agreement on halting North Korea missile exports. 

We have two policy choices: Either to attempt to negotiate a mutually satisfactory 

solution with North Korea, leading to an accommodation, if not acceptance, of an 

authoritarian regime. The second would be to pursue a strategy of isolation and hostility, leading eventually to conflict with the North. 

The first approach is repugnant to many because it assumes we make peace with 

the devil. The second might result in a second Korean War. I would suggest that 

negotiation, however, buys time to change North Korea from within and, if our negotiations are successful, will end the threat of North Korean proliferation. 

I do not know if it is possible to reach an agreement with North Korea that will 

halt—and roll back—its WMD programs. I do know that if we do not engage North 

Korea seriously, we will never know if such an agreement could have been reached. 

I also believe we should pursue both bilateral and multilateral negotiations. We 

should take whichever road that offers the promise of ending the North Korean 

weapons program. 

The North Koreans will have to make significant concessions—and we will too. 

That is the price of any successful set of negotiations. And benefits must be mutual. 

I look forward to our witnesses today. I hope you can clarify for me our options 

in dealing with North Korea even as they detail our concerns about the North’s proliferation and criminal activities. Thank you, Mr. Chairman for having this hearing 

this afternoon.

Senator AKAKA. Mr. Chairman, I appreciate the opportunity to be 

here with you this afternoon for the first hearing of this Subcommittee under your leadership in this room. 

I am also pleased that the first hearing is on an issue relating 

to international security. Our Committee and this Subcommittee 

has a long history of engagement on these types of issues, and I 

am glad you are continuing, with both this tradition and this responsibility. 

I share your concern over the situation in North Korea. We do 

need to invade North Korea to find proof of its involvement in 

weapons and drug trafficking. We have two choices, either to attempt to negotiate a mutually satisfactory solution with North 

Korea, leading to an accommodation, if not acceptance, of an authoritarian regime. The second would be to pursue a strategy of 

isolation and hostility, leading eventually to conflict with the 

North. 

The first approach is repugnant to many because it assumes we 

make peace with the devil. The second might result in a second Korean war. 

8

I would suggest that negotiation, however, buys time to change 

North Korea from within, and if our negotiations are successful, 

will end the threat of North Korean proliferation. I do not know if 

it is possible to reach an agreement with North Korea that will 

halt or roll back its WMD programs. I do know that if we do not 

engage North Korea seriously, we will never know if such an agreement could have been reached. 

I also believe we should pursue both bilateral and multilateral 

negotiations. We should take whichever road that offers the promise of ending North Korea’s weapons program. The North Koreans 

will have to make significant concessions, and we will too. That is 

the price of any successful set of negotiations, and benefits must 

be mutual. 

I look forward to our witnesses today, Mr. Chairman. I hope they 

can clarify, for me, our options in dealing with North Korea, even 

as they detail our concerns about the North’s proliferation in criminal activities, and I want to thank you, Mr. Chairman, very much 

for having this hearing. 

Senator FITZGERALD. Senator Akaka, thank you very much. 

Mr. Bach, I was wondering if the State Department had any information, and I know it is very hard to find, about what North 

Korea earns annually from legitimate exports of legitimate products. Do you have any figures or would you know how we could get 

some information on that? 

Mr. BACH. Thank you, Senator. 

No, I do not know the answer to the question, but we can certainly get it for you. I do not have even a good estimate, I am 

afraid. That is not my lane, but we can respond to you later. 

Senator FITZGERALD. We would appreciate it if you could get the 

estimate, even if it is just an estimate of their revenues. I believe 

we are going to have later testimony today that is going to estimate 

that North Korea earns about $650 million a year from the export 

of legitimate products, but something like twice that from the export of drugs and weapons. 

Mr. Bach, clearly, North Korea has been exporting weapons, specifically missiles. They were caught red-handed with that shipment 

off the coast of Yemen, which we interdicted, and then we allowed 

them to go forward with that shipment. 

Are there any international laws that they are violating when 

they sell their missiles? 

Mr. BACH. As I understand, that interdiction resulted in the ship 

proceeding towards it destination. I do not know the answer, if 

there were any international laws. I can get back to you on that 

one as well. 

Senator FITZGERALD. But, generally speaking, a country can 

manufacture weapons and sell them. 

Mr. BACH. That is correct. 

Senator FITZGERALD. If they are selling drugs, presumably, that 

would violate some international law, would it not? Or is it possible 

for a country just to be in the business of producing and selling 

drugs, such as heroin? 

Mr. BACH. Certainly, there are licit production of opium that 

take place in different countries, and it is exported under controlled 

circumstances for use in making medicines, but in the case of illeVerDate 0ct 09 2002 14:59 Oct 21, 2003 Jkt 088250 PO 00000 Frm 00012 Fmt 6633 Sfmt 6601 C:\DOCS\88250.TXT SAFFAIRS PsN: PHOGAN
9

gally importing or smuggling heroin into a country, as happened 

with the Pong Su, that is definitely illegal. 

Senator FITZGERALD. Is there any law that they would be violating if they are raising poppy for the production of heroin, if they 

are just doing that domestically? Do you know if North Korea is 

part of any treaty that forbids that? 

Mr. BACH. I do not believe that it is, sir. I think that they could 

grow poppy for the production of opium, which would then be used 

for licit purposes in the production of analgesics, but I do not think 

that heroin is something that is—well, it would be legal to do within the country if it were only for domestic purposes, I would imagine. 

Senator FITZGERALD. But if they are not signatory to any treaty, 

where they pledged not to export the heroin or the poppy, it is possible they are not even violating international law? 

Mr. BACH. Until it gets to another country, that is probably true, 

yes, sir. 

Senator FITZGERALD. Mr. Hollis, according to the Central Intelligence Agency’s report to Congress, North Korea appears to be 

seeking to produce one to two nuclear weapons a year and has improved its missile technology. The North Koreans now possess 

weapons capable of reaching the United States, while carrying a 

nuclear weapons-sized payload. 

As the report states, for some time now, North Korea has demonstrated a willingness to sell missile systems to other states. Are 

either of you on the panel, Mr. Hollis or Mr. Bach, aware to which 

states has North Korea sold its missile systems to in the past, 

other than Yemen? 

Mr. HOLLIS. Sir, I will try to stay in my lane of Canon narcotics, 

but I will be happy to take your question back and refer that to 

the appropriate offices within the Department of Defense and get 

you an answer. 

Senator FITZGERALD. We would appreciate that. Thank you. 

Mr. BACH. I subscribe to that answer. 

Senator FITZGERALD. Same with Mr. Bach, OK. 

We have Senator Lautenberg here. I would like to recognize Senator Lautenberg, and we can make time for you to make an opening statement when you are ready or join the questioning, too. 

Senator LAUTENBERG. Thank you very much, Mr. Chairman. I 

will kind of catch up first. Thank you. 

Senator FITZGERALD. Thank you. Senator Akaka, would you have 

any questions? 

Senator AKAKA. Yes, thank you very much, Mr. Chairman. 

I have questions for both of you. 

One witness in our next panel recommends that we work with 

the intelligence, customs, and law enforcement agencies of other 

countries, particularly those neighboring North Korea, to crack 

down on drug shipments. The Chairman has stated the problem 

real well. My question to both of you is are we not doing this already, and why is it not working? Mr. Hollis. 

Mr. HOLLIS. Thank you, Senator. And once again it is an honor 

to be here before you, and I would be happy to answer the question 

from DOD’s perspective. 

10

If I may put it in context, sir, with respect to counternarcotics, 

particularly outside the United States, the Department of Defense 

has some specific responsibilities, and I want to set those out so 

that my answer to you is in the proper context. 

First and foremost, the Department shall serve as the lead agency for the detection and monitoring of maritime and aerial drug 

trafficking toward the United States. That is not necessarily a role 

and responsibility that is required here. 

Worldwide, however, working in support of the Department of 

State and in support of host nation law enforcement agencies with 

counterdrug responsibilities, we can, once they request, provide a 

variety of forms of support—training, upgrading their equipment, 

intelligence sharing, collection analysis, some infrastructure support, and some transportation support. All of that is predicated 

upon the country asking us, through the embassy, for that support, 

and we work with our interagency colleagues. 

We do provide a variety of forms of support throughout Asia, in 

particular, in Southeast Asia, and there are other agencies within 

the U.S. Government that do provide support in North Asia. 

So what I am trying to say to you, sir, is when the countries request support, through the respective embassies, the embassies 

send those requests in, and the appropriate agency, as part of the 

U.S. Government, will provide that support, but we stand ready to 

provide that support. 

Senator AKAKA. Mr. Bach. 

Mr. BACH. Yes, Senator. We do have that mandate to help countries coordinate their defenses against narcotics. We tend to do it 

in countries where the threat is directed at the United States, and 

we do not know of any incidents where narcotics that we think 

originated from North Korea have come to the United States. 

We do help countries in Southeast Asia with their counternarcotics programs. We do not have very many programs in North 

Asia, and that is because, in the case of China, we do not have a 

letter of agreement, a treaty, with China to cooperate on counternarcotics. In the case of Korea, Japan, and Taiwan, those are countries that are rich in resources themselves, and they do not need 

our assistance. 

So the countries that are targeted by the North Koreans, particularly, do not seem to qualify, in most cases, for the sorts of assistance programs that INL provides. 

Senator AKAKA. I take it that China does not permit DEA into 

China. 

Mr. BACH. It actually has just arrived at some sort of an agreement where they are permitting DEA to work with the Chinese officials on counternarcotics matters. And, in fact, DEA does have offices in many of these countries, and that is we are deriving quite 

a bit of our information from very good cooperative relationships 

between law enforcement on our side and Japan and Taiwan in 

particular. 

Senator AKAKA. Here is another question to both of you. Do you 

have any evidence that foreign diplomats stationed in North Korea 

are involved in helping North Koreans traffic in drugs? Mr. Hollis. 

Mr. HOLLIS. Sir, I am personally unaware of anything, in response to your question. But, again, I would be happy, if you would 

11

like, to refer that question to the intel community. I am sure that, 

under the appropriate circumstances, they would be happy to respond to you. 

Senator AKAKA. Thank you. Any comment on that, Mr. Bach? 

Mr. BACH. No, sir. 

Senator AKAKA. My other question is, is there any evidence that 

North Korea is not growing poppies, but importing them to process 

into heroin? And if that is so, from where do they obtain these raw 

products? 

Mr. BACH. I can try to answer that, sir. We are not certain where 

they are getting the heroin. We have heard reports, of course, that 

some of the heroin that is being trafficked by North Koreans has 

originated in Southeast Asia, but we have also heard that Korean 

processors of opium into heroin use packaging that is made to look 

as though it comes from Southeast Asia, so it could be a ruse. 

As far as attempts made at identification of poppy cultivation inside of North Korea, we have, in 1996 and 1999, used overhead imagery to try to identify cultivation of poppy, and in neither of those 

cases were we able to identify sufficient quantities of what looked 

like poppy from the satellite imagery to identify North Korea as a 

major producer; that is to say, that it has 1,000 hectares under 

poppy cultivation, and that has to do with the fact that we have 

not had a ground-truthing survey in conjunction with the aerial 

survey. 

Typically, you have to have people on the ground talking to farmers, getting more information for the analysis that then can be 

used to establish the poppy signature by the overhead imagery. So 

we do not have that kind of information. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

Senator FITZGERALD. Senator Lautenberg, I do not know whether 

you would care to make an opening statement at this time? 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. Mr. Chairman, I appreciate the opportunity that we have to try to decipher where it is we want to go 

with our policy with North Korea. Do we have a gain or a loss by 

bringing the two things together? And that is to try to have a 

counterdrug effort and to be talking about that, when it is hard to 

evaluate, which is the more terrible, more evil thing, and that is 

to talk about whether or not weapons of mass destruction are being 

produced, ballistic missiles, etc., in North Korea. That hostility is 

obvious. The other is kind of sub rosa, as it is throughout the 

world, in terms of drug trafficking. 

I would ask you, Mr. Hollis, whether, to start this, if I may, Mr. 

Chairman—and that is are we pursuing our drug enforcement policy with the same vigor, with the same equipment, the same knowledge that we do in other parts of the world, like we do in Colombia, 

let us say, or we do in other places or do domestically? 

Do we use our satellite technology to try and find out whether 

these things, to Senator Akaka’s question, is there poppy cultivation in North Korea? And in a way I am not sure that that is so 

relevant because if you want to get that stuff, it is available all 

over the world, but just to try to determine how much effort we are 

putting into this. 

12

Mr. HOLLIS. Thank you, Senator. That is a very good question, 

and it is a question that a lot of bright people, with a lot of pay 

grades even higher than my own, are working on as we speak. 

The question is to what extent, if I understand correctly, to what 

extent is the level of effort that we, as the international community, execute in counterdrug, say, in Northeast Asia? Should it be 

greater, should it be less, in comparison to, say, our efforts with 

our friends in——

Senator LAUTENBERG. Southeast Asia or——

Mr. HOLLIS. Yes, sir. There are a lot of people who are working 

on that question and who are thinking about that question. I think 

it is also fair to say that it has not been a question that a lot of 

people have pondered in the recent past. 

Senator LAUTENBERG. But we know, directly, that there is a flow, 

that there is a lot of drug activity, that the ship, the Pong Su, etc., 

but we have other evidence as well, as I understand it, and do we 

see a direct flow from there to here, into the United States? 

Mr. Bach shakes his head, no, and that is interesting because 

that is where I want to go. I would like to know, Mr. Chairman, 

whether or not this is a—drugs invading our society are always a 

serious threat, but is this of the magnitude that we want to put 

the law enforcement effort into it? It is always more difficult when 

we have no relationship with the company. Again, I used Colombia 

before as an example. We have got full-fledged diplomatic and functional relations going on there. 

So is this of the magnitude that it ought to take us off the topic, 

the principal topic, or will this, as a matter of fact, negate some 

of the work that we are trying obviously to do, to have a dialogue? 

At least I speak for my own vantage point, I would like to see a 

dialogue going on there. I do not think we are of the capability or 

of the mood to do an Iraq over there and invade the country to try 

and quell their capability for developing weapons of mass destruction. 

Mr. Bach, do you want to comment on that? 

Mr. BACH. Yes, Senator. I wanted to comment on my shake of 

the head earlier, which is that we do not have any evidence that 

the North Korean drugs are coming to the United States. There 

have been no incidents so far of drugs we can trace to North Korean traffickers coming to the United States. 

In terms of the amount of effort that we are placing in the countries that are most targeted by the North Koreans—Taiwan and 

Japan—we are cooperating with those countries in terms of a lot 

of various economic programs, of course, and certainly law enforcement and coordination of law enforcement efforts, from the point 

of view of DEA, for example, the Japanese, those relations are very 

close. 

In terms of the kind of assistance that we are giving to the Andean Ridge in Colombia, for example, it is not analogous in the case 

of Japan. They have about 2.2 million users of amphetamine-type 

substances in Japan. They are dealing with them domestically. 

They do not need our assistance in doing that. We are trying to 

give them whatever assistance we can, in terms of providing a platform for coordination with other countries to work together in 

counternarcotics, but we are not giving them the kind of assistance 

13

programs that we have for countries that do not have the level of 

resources that Japan and Taiwan have. 

I think that answers——

Senator LAUTENBERG. Yes. So we are doing it for the well-being 

of our friends and allies, and that is OK. 

The question is, going directly to the subject at hand, and that 

is North Korea. We have got a lot to worry about we think there 

from all kinds of things, and whether the scourge is the threat 

from nuclear or ballistic missiles or whether it is from a drug invasion, which can, in many ways, be very effective in debilitating a 

society. But, if not, should you both be at the table at the same 

time, I ask, Mr. Chairman, with all due respect? Is one counter to 

the other in any way? 

Mr. HOLLIS. Senator, if I may offer just a quick comment, sir, 

and it is more a question that really is worthy of discussion and 

thought. 

If, working with our friends and allies, we are able to detect and 

monitor the movement of drugs by air, by land, and by sea, what 

else will you see? 

Senator LAUTENBERG. Well, we should do it. Yes, we should do 

it and take that information. But just so we understand here, for 

our own use and legislative purpose, is it the kind of thing because 

I, frankly, my focus would be much more on the build-up of weapons, and the antagonisms that are going there, and where I worry 

a lot about, South Korea and other places near North Korea, and 

how much effort we should put into the North Korean threat and 

not diverting it with a lot of other things. 

And I am content, if you both kind of confirm the fact that we 

are doing this for our friends and allies, and providing part of an 

intelligence or whatever network that we can to stop the drug flow, 

but the question about what should we do to try and get a relationship going with North Korea that takes down the weapons threat 

and offers us a chance to have some kind of a dialogue, but that 

can have us not pointing guns at one another, but pointing hands 

at one another; Mr. Bach, what is the State Department’s inside 

view, confidentially, among this group? 

Mr. BACH. Thanks, Senator. 

I think we are very eager to get into a relationship with North 

Korea, where they stop doing what they are doing with missile exports, and drugs and development of nuclear weapons. We would 

like very much if the North Koreans would behave more reasonably 

in a lot of different areas, and we are trying to work together with 

our allies and friends to make sure that we do together what we 

can to bring that sort of attitude to the North Korean leadership. 

And it is very difficult, of course, to reach them, but we are trying, as we can, with counternarcotics policies and law enforcement 

cooperation to bring about that mind-set in the North Korean leadership. I think that is the most helpful thing that we can do. I do 

not think of opposition to narcotics trafficking by North Korean 

vessels as a diversion or a distraction from the main game. I think 

it is all part of the same fabric of rather irrational behavior on the 

part of the North Korean Government. 

Senator LAUTENBERG. Is it thought that drug trafficking is part 

of the North Korean national policy? 

14

1The prepared statement of Mr. Eberstadt appears in the Appendix on page 45. 

Mr. BACH. We cannot say for sure, definitively, that it is part of 

the state policy. We can only surmise that it would be very difficult 

for the state not to be involved because it seems to have totalitarian control over much of the enterprise that takes place in the 

country, much of the agriculture, certainly much of the trading, 

and many of the people that have been apprehended as trafficking 

in drugs or counterfeit bills have had diplomatic passports, so we 

think that there must be some association, although we cannot say 

that it is guided by the state. 

Senator LAUTENBERG. I thank the gentlemen. Thanks, Mr. Chairman. 

Senator FITZGERALD. Thank you, Senator Lautenberg. 

And I would like to thank Mr. Hollis and Mr. Bach for their testimony today. We appreciate your coming up to the Senate to testify. 

And with that, I would like to dismiss the first panel and invite 

the second panel to come up. We have Dr. Robert Gallucci, the 

dean of Georgetown University Walsh School of Foreign Service; 

Nick Eberstadt, the Henry Wendt Scholar in Political Economy at 

the American Enterprise Institute; Larry Wortzel, vice president 

and director of the Heritage Foundation’s Davis Institute for International Policy Studies. 

[Pause.] 

Senator FITZGERALD. Well, thank you very much. Thank you all 

for being here. 

Dr. Eberstadt, I would invite you to begin first with your testimony, and then we will proceed from my left to right. 

TESTIMONY OF NICHOLAS EBERSTADT, Ph.D.,1 AMERICAN 

ENTERPRISE INSTITUTE 

Mr. EBERSTADT. Mr. Chairman, distinguished Members of the 

Subcommittee, and esteemed colleagues and guests. It is always a 

pleasure and an honor. With your permission, I will submit written 

record later. 

I thought I would begin with a little bit of background research, 

since I have no security clearances, and thus only know what I 

read in the newspapers about DPRK merchandise in counterfeiting 

weapons and drugs. 

If we can move to the first slide, please. 

What we have here is some of my homework. I have tried to reconstruct North Korean trade patterns according to what we call 

‘‘mirror statistics,’’ which is to say North Korea’s trade partners’ reports about purchases and sales of merchandise by the DPRK. 

These are highly incomplete and quite limited, but they provide 

some insight I think that may be useful. 

This Figure 1 shows total reported North Korean export revenues 

over the period from 1989 to 2001. Of course, then went down after 

the end of the Soviet Union. The point to take home here I think 

is that North Korea, as a state, has essentially no legitimate, legal 

visible means of support. 

In the year 2001, the DPRK reportedly, through these data, 

earned $750 million in total revenue through nonmilitary merchanVerDate 0ct 09 2002 14:59 Oct 21, 2003 Jkt 088250 PO 00000 Frm 00018 Fmt 6633 Sfmt 6601 C:\DOCS\88250.TXT SAFFAIRS PsN: PHOGAN
15

dise sales. To put that amount in perspective, it would be less than 

$40 per capita for the country as a whole—an absolutely extraordinarily low level for an urbanized literate population. 

Senator FITZGERALD. What were they exporting back in the late 

1990’s that had them at a much higher figure? 

Mr. EBERSTADT. They had export arrangements, whereby the Soviet Union was obliged to purchase their supplies—textiles, magnesite, cement, steel, other products of that sort—but those were, 

so to speak, forced purchases. 

Senator FITZGERALD. So their buyer evaporated with the demise 

of——

Mr. EBERSTADT. Their buyer evaporated, and there were no new 

markets for these products. 

Senator FITZGERALD. Now, is the $650 million or $700 million in 

legitimate exports that they now have mainly textiles? 

Mr. EBERSTADT. It would be textiles, gold, steel, cement, some 

agricultural products, including sea products, fish, seaweed, mushrooms, and the like. 

Senator FITZGERALD. Thank you. 

Mr. EBERSTADT. The next slide, Figure 2, will show North Korea’s reported merchandise imports, what it is reported as buying 

from other parts of the world. That has gone up since 1998 rather 

significantly to a little bit over $2 billion reported. 

And if we see the following slide, Figure 3, that will show the 

discrepancy between what North Korea is reported as earning, legitimately, and what North Korea has reported as buying, and it 

is a big gap. The gap was down to about $600 million in the late 

1990’s, but has risen very substantially in the early 2000’s, above 

$1,200 million, about $100 million a month. 

This is the overall merchandise trade deficit. Part of that discrepancy is due to China’s subsidy of North Korea. And in the final 

slide, Figure 4, we take China out of the equation, and we see the 

unexplained excess of purchases over imports going from under 

$100 million in 1997 up to above $800 million in 2001. 

This, if you will, invisible means of support for the DPRK state 

includes foreign aid from other governments, including our own; 

Japanese remittances from pro-DPRK groups in Japan; South Korean tourism payments; secret South Korean official payments, including the payments made to secure the Pyongyang Summit of 

2000; but also drugs, counterfeiting, and arms. We cannot parse 

these out from these particular numbers, but we can see that it has 

increased very substantially over the last number of years. 

May I make a few additional points, Senator? 

Senator FITZGERALD. Yes. 

Mr. EBERSTADT. I would make five additional points, if I could, 

very quickly. 

First, I think it is reasonable, from what we read in the newspapers, to conclude that drug and counterfeiting traffic from the 

DPRK is a state business, not a rogue units business or some private enterprise. There is essentially no private enterprise in the 

DPRK. Ask yourself if it would be possible for individual farmers 

to cultivate thousands of hectares of opium, poppies, or to establish 

labs for methamphetamine production. The question, I think, answers itself. 

16

1The prepared statement of Mr. Wortzel appears in the Appendix on page 50. 

Second, drug and counterfeiting is part and parcel of North Korean diplomacy, not an aberration, and we can see this by looking 

back as far as the 1970’s. In 1976, the Scandinavians expelled 

North Korean diplomats for trafficking drugs, for being caught trafficking drugs. Why did it take them until 1976 to catch them? Because they did not establish relations with Pyongyang until 1973. 

Similarly, why did it take Venezuela until 1977 to catch North 

Korean diplomats trafficking drugs? Because Venezuela and North 

Korea did not establish relations until 1974. You can go on down 

the list. 

Third, drug and counterfeiting trade is entirely consistent with 

the official DPRK view of its legal and treaty obligations, which is 

to say it is entirely opportunistic. Pyongyang’s is a predatory approach, and we see this in drugs and counterfeiting of other countries’ currencies. 

Fourth, the DPRK, as a government, positively prefers, I think, 

drug and counterfeiting business to other peaceful legal means of 

merchandise trade. Again and again, the DPRK has indicated that 

it views ordinary, peaceable commercial merchandising as subversive of the authority of its state. Drug and counterfeiting is not 

subversive of its authority, which is to say drug and counterfeiting 

are part of the strategy for state survival of the DPRK. 

Fifth, and finally, if we can believe news stories, the DPRK’s 

drug and counterfeiting businesses are centralized through something called Bureau No. 39 of the Workers Party of the DPRK. This 

is controlled by the highest authorities of the state. That would correspondingly suggest that revenues entered into through Unit No. 

39 are also applied to the state’s top priorities. It is no secret that 

the DPRK enshrines ‘‘military first’’ politics as its very top priority 

of state. Thus, it is hardly wild to suggest that narcotics and counterfeiting may directly be contributing to the WMD buildup that is 

threatening the United States and her allies today. 

Thank you, sir. 

Senator FITZGERALD. Thank you very much, Dr. Eberstadt. Dr. 

Wortzel. 

TESTIMONY OF LARRY M. WORTZEL, Ph.D.,1 HERITAGE 

FOUNDATION 

Mr. WORTZEL. Mr. Chairman, distinguished Members of the Subcommittee, thank you very much for the opportunity to testify 

today. 

North Korea’s exports, from legitimate business in 2001, this is 

according to the April 23, 2003, Wall Street Journal, was about 

$650 million. 

The income to Pyongyang from illegal drugs in the same year 

was between $500 million and a billion dollars. Missile sales 

earned Pyongyang about $560 million in 2001. North Korea produces somewhere between 30 and 44 tons of opium a year, according to testimony by the U.S. Forces Korea commander, and the 

Guardian of England, on January 20, 2003, puts North Korean 

counterfeiting profits at somewhere between $15 million and $100 

million a year—they say $100 million last year. 

17

So, if you want to put economic pressure on the Government of 

North Korea, if you do not want a military lever only, you begin 

to take care of all of this other illegal trade. That is one way to 

do it. The Kim Jong-il regime resembles more a cult-based, familyrun criminal enterprise than a government. 

And according to a Congressional Research Service 1999 report, 

North Korea seems to support its diplomatic presence overseas, 

and its intelligence activities around the world, through these illegal drug sales and counterfeiting. 

North Korean diplomats, workers, and officials have been caught 

selling opiates, including heroin, as well as amphetamines and 

date-rape drugs in Japan, China, Russia, Taiwan, Egypt, the Czech 

Republic, Bulgaria, and South Korea. The State Department, however, in its 2003 International Narcotics Strategy Control Report, 

could provide no conclusive evidence of illicit opium production in 

North Korea. Well, I just am a little skeptical of that conclusion. 

Now, Senator Lautenberg is no longer here, but I think it is important for us to remember that the same network of North Korean 

officials that distribute those drugs and distribute that opium could 

distribute nuclear materials, and that is not far off what Li Gun 

said to Assistant Secretary of State Kelly, when he met him in Beijing, as sort of an offhand threat. I think we have to take care of 

this, not as perhaps the priority of the U.S. Government, but it 

must be a priority. 

I believe that we have to put pressure on North Korea, and countries around it, to watch North Korean diplomats, military and government officials who transport and sell drugs, and even a place 

like China is likely to help with that. 

North Korea has also exported significant ballistic missile-related 

equipment, parts, materials, and technical expertise to South 

America, Africa, the Middle East, South Asia, and North Africa. 

The entire Pakistani program is probably, the late, more longrange Pakistani program, their Ghauri system, is all North Korean 

Nodong-based. That earns them quite a bit of money. 

India, in 1998, stopped and detained a North Korean ship at 

Kandia that contained 148 crates of blueprints, machinery and 

parts for ballistic missiles on the way to Pakistan from North 

Korea. 

Now, there has been talk of an air and sea quarantine of North 

Korea as an economic measure. I would say to you that, first of all, 

a quarantine is an act of war. The ship that was intercepted on the 

way to Yemen was intercepted pursuant to international law under 

United Nations sanctions against Afghanistan. 

Now, if we were able to do that and begin to get aircraft and 

ships and check them, we still have the problem of whether Russia 

and China would cooperate because North Korea could just as well 

ship those things through China or Russia, and China certainly facilitated all of North Korea’s help to Pakistan. So this is a diplomatic problem, and it has to be solved, I think, through diplomatic 

means. 

I think that there are measures we should take to address these 

things. I think U.S. diplomats should be putting pressure on the 

intelligence, customs and law enforcement agencies of other counVerDate 0ct 09 2002 14:59 Oct 21, 2003 Jkt 088250 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 C:\DOCS\88250.TXT SAFFAIRS PsN: PHOGAN
18

1The prepared statement of Mr. Gallucci appears in the Appendix on page 69. 

tries and working with them to crack down on North Korean drug 

and counterfeit money shipments. 

They should stress that North Korea’s drug trade is not an independent operation, but it is controlled by the Kim Jong-il regime. 

Sponsoring governments should ensure that their own embassies 

are actively not helping move these things back and forth. That is 

another diplomatic lever. 

Just as we have in the war on terror and in the war on drugs, 

we can work with other international agencies and foreign governments to crack down on financial institutions overseas that support 

North Korea’s criminal activities. 

Now, Japan has $240 million in legal trade with North Korea. 

Japan could take action there, if North Korea persists in its illegal 

trade. 

I think we still need to maintain a very strong military presence 

overseas and that we need to be prepared to fight if the North Koreans start a war, and I think we need to get ballistic missile defenses deployed in the region just as quickly as we can because of 

that military threat. 

Finally, I think that when we do talk to North Korea, and I 

think we should, it is absolutely imperative that it be done in a 

multilateral context. We cannot and should not isolate our ally, 

South Korea. 

Economic assistance to North Korea should be predicated on the 

verifiable end to its nuclear programs. 

Thank you, Mr. Chairman, Senator Akaka. 

Senator FITZGERALD. Dr. Gallucci. 

TESTIMONY OF ROBERT L. GALLUCCI, Ph.D.,1 GEORGETOWN 

UNIVERSITY WALSH SCHOOL OF FOREIGN SERVICE 

Mr. GALLUCCI. Thank you, Mr. Chairman. Thank you for the opportunity to appear before the Subcommittee today, and with your 

permission, Mr. Chairman, I will submit some comments formally 

for the record. 

Senator FITZGERALD. Without objection. 

Mr. GALLUCCI. I understand the subject today, Mr. Chairman, is 

the connection between the drug and counterfeiting activity of 

North Korea, illicit drug trade and counterfeiting, and weapons of 

mass destruction. It would seem to me a good place to start is by 

saying that, independent of any connection between that illicit 

trade and weapons of mass destruction, it would be a good idea for 

the United States and the international community to do what it 

could to interdict that trade. That, just on the face of it, would be 

a valuable objective. 

That said, though, going to the connection, this is a source, as 

other witnesses have pointed out, of hard currency, and apparently 

a significant source, and as such, since money is fungible, these 

funds, undoubtedly, can be used to support the North Korean military capability, including its ballistic missile and nuclear weapons 

program and other weapons of mass destruction. 

So that if you needed an additional reason, the connection to the 

threat posed by these weapons of mass destruction to the United 

19

States and its allies, particularly South Korea and Japan, would be 

one such. 

However, it would seem to me the reverse, turning the argument 

about, is not such a good idea. It does not seem to make sense to 

offer the proposition that a good way to go about stopping North 

Korea’s nuclear weapons program, for example, is by stopping or 

interdicting illicit drug and counterfeiting activity. 

It seems to me that the programs of North Korea are a very high 

value to it in weapons of mass destruction, particularly the nuclear 

weapons program, and if they value their fissile material production, which now comes from existing spent fuel, fuel that is being 

irradiated, from which plutonium can be extracted, and an uranium enrichment program which will produce enriched uranium, if 

funds are needed for these programs, they will be found. 

They may be found by extracting the funds from those funds 

which are now used to support a very large conventional military 

establishment. They may be found by the regime making very brutal tradeoffs with requirements in the civilian sector. So I do not 

see the relative cost of these programs, as compared to other areas 

where they may be able to find funding, to be such as to suggest 

that this interdiction of drugs and counterfeiting would have the 

impact of preventing these programs from going forward. 

My principal concern, therefore, as I listen to arguments about 

the importance of the drug and counterfeiting funds to the North 

Koreans, is that there be a delusion, in a sense, that we might be 

able to prevent the nuclear weapons program specifically from proceeding by acting against these programs which are, in and of 

themselves, reprehensible. 

It seems to me that we are now facing essentially the same three 

choices that we faced a decade ago if we wish to stop the nuclear 

weapons program in North Korea and stop that program specifically. 

Those three choices were, and are: 

First, the use of force, with all that implies, in terms of horrendous casualties, were we to do that; 

Second, to contain North Korea, which is another way of saying 

to accept the North Korean nuclear weapons program, and that option or that choice would entail, first, accepting the risks, which I 

think are quite high, that South Korea and Japan might eventually 

follow suit and acquire nuclear weapons. I think the risks are quite 

high that their ballistic missile program would eventually be mated 

with the nuclear weapons program, and those missiles would eventually be capable of reaching our West Coast; 

And, finally, and I think most significant of all, there is the possibility that North Korea might export and sell this fissile material 

to terrorists. I guess I would take issue with my colleague, Dr. 

Wortzel, here. I would think this is the overriding priority. I cannot 

myself think of a more important objective for the national security, the homeland security of the United States of America, than 

making sure that fissile material does not fall into the hands of terrorist groups. 

So, finally, in the three options, the third one is left, and that 

would be to negotiate with the North Koreans, to see at least 

whether it was possible to negotiate a verifiable end to the nuclear 

20

weapons program, in other words to test the North Koreans, who 

have said they are prepared to put their nuclear weapons program 

on the table, test that proposition and see if we could not negotiate 

the outcome we want. At least I would do this before I would consider opting for either of the first two choices. 

There is, in other words, in my view, no free lunch here in dealing with the North Korean problem, not by a process of containment or not by a processing of hoping the Chinese will solve the 

problem for us. I think the choices are the choices we have always 

had. 

The subject of this hearing, though, the drug trade and the counterfeiting, are two concerns which are quite legitimate and ought 

to be pursued, and the only concern I am presenting to the Subcommittee today is that we not mistake that effort for an effective 

policy of dealing with the nuclear weapons program. 

Thank you, Mr. Chairman. 

Senator FITZGERALD. Dr. Gallucci, thank you very much. 

You started your comments by saying that the world community 

should interdict any illicit drugs that are being shipped out of 

North Korea. How do we go about doing that? Given that the North 

Koreans have a close relationship with China, do we try to involve 

China? Do you think that is feasible? 

Mr. GALLUCCI. Mr. Chairman, we have come to the point, for me 

at least, which I have to fess up that I am no expert in drugs or 

counterfeiting. It does seem to me, though, that at least individual 

states in the international community are prepared to cooperate 

with us, when they think they are dealing with ships that have illegal drugs aboard and perhaps counterfeit currency. 

I do not know that we can expect that we are going to get full 

cooperation from the Chinese, particularly, in this area. And I 

know one of my colleagues made this point, but if we are hoping, 

for example, to in a sense quarantine the North Koreans with a 

policy of bringing the rest of the international community aboard, 

I think we have to ask ourselves whether the Chinese would be 

willing to engage in a policy which we thought was designed to 

bring the North Koreans to their knees; an outcome which the Chinese I do not think really would find as favorable as we would. So 

I think we have to wonder about the extent to which they will cooperate with us. 

But as to the real thrust of your question, what the legalities of 

this would be, I really do not know, Mr. Chairman. I am sorry. 

Senator FITZGERALD. Dr. Eberstadt, you had some very interesting statistics, and you came up with good possible explanations 

for what could be funding the trade deficit that we know North 

Korea has. 

One other possibility is that they could be getting foreign aid or 

they could be borrowing money that would enable them to fund 

that large deficit. Are they getting foreign grants and loans of a 

sizeable amount, that you are aware? 

Mr. EBERSTADT. During the period up to 2001, sir, yes, they were 

getting foreign aid, including foreign aid from the U.S. Government. 

Senator FITZGERALD. And how much was the United States providing? 

21

Mr. EBERSTADT. The Congressional Research Service has estimated, between 1995 and 2001, total humanitarian, and heavy fuel 

oil and medical aid from the USG to DPRK was a little bit over 

$1 billion in total. So U.S. foreign aid, certainly, could help to explain it. 

Senator FITZGERALD. Are they getting loans from any international funds like the World Bank or International Monetary 

Fund? 

Mr. EBERSTADT. No, sir. Our restrictions and sanctions on the 

DPRK——

Senator FITZGERALD. Block that. 

Mr. EBERSTADT [continuing]. Impel the United States to vote 

against membership or such loans, and they are not receiving 

them. DPRK does get a small amount of money from the U.N. Development Program, but I think that is a few million dollars a year. 

Senator FITZGERALD. Dr. Wortzel, Mr. Bach from the State Department testified that the State Department had sought satellite 

imagery in 1996 and 1999, I believe he said, and that the satellite 

imagery suggested no evidence of poppy cultivation greater than a 

thousand hectares? 

Mr. WORTZEL. He said hectares, that is correct. 

Senator FITZGERALD. Do you believe that? 

Mr. WORTZEL. No, I do not, Mr. Chairman. The Congressional 

Research Service, again, in its 1999 report, put poppy cultivation 

at somewhere between 3,000 and 7,000 hectares. And I also do not 

accept——

Senator FITZGERALD. And what was the basis for them saying 

that? 

Mr. WORTZEL. Well, I am sure it was imagery. I mean, it was an 

unclassified report, but they based it on U.S. Government surveillance. 

I also do not accept the statement about ground truthing. It has 

been a number of years since I had to, as a military intelligence 

officer, deal with imagery and ground truthing, particularly of agricultural things, but it seems to me that the signature, whether it 

is in multispectoral sort of color imaging of agricultural growth or 

in other forms of imagery, the signature of poppies is the same all 

around the world. It might differ slightly by the amount of moisture in it, but I think we could do better. 

Senator FITZGERALD. Dr. Eberstadt. 

Mr. EBERSTADT. Sir, I hope it is not churlish of me to point out 

that if the U.S. Government were to determine conclusively that 

the DPRK were cultivating more than a thousand hectares of 

opium poppies, illicit opium poppies, a year, the U.S. Government 

would consequently be obliged, under the Foreign Assistance Act of 

1961, to impose additional economic sanctions against the DPRK, 

which is to say if one were interested in promoting an ‘‘engagement’’ policy with the DPRK, it would be highly inconvenient to determine if the DPRK had a thousand hectares or more. 

Senator FITZGERALD. Are you suggesting that the State Department could be putting pressure on officials who make those assessments to keep their findings under a thousand hectares? 

Mr. EBERSTADT. I would simply suggest good lawyers do not ask 

questions they do not like the answers to. 

22

Senator FITZGERALD. Senator Akaka, would you have questions 

of the witnesses? 

Senator AKAKA. I do have questions. Thank you very much, Mr. 

Chairman. 

Dr. Gallucci, you probably have the most experience of anyone 

outside the government in negotiating with the North Koreans. Do 

you believe that it is possible to reach a verifiable agreement with 

them? 

Mr. GALLUCCI. I believe it is possible, Senator. I believe we, in 

1994, concluded what is known as the agreed framework which had 

a portion of it that was verifiable, and we were able to verify that 

the plutonium program we were out to stop was stopped and has 

been stopped, and because of that deal, there are probably 100 or 

so less nuclear weapons on the face of the Earth than there would 

otherwise be. 

But the portion of the framework which was not subject to 

verification, other than what we could do by, as we say, national 

technical means, went to enrichment, and that is where they cheated. So if you ask could we, in a sense, do another deal, but this 

time make sure that the whole thing was verifiable, I think it can 

be imagined, and I think it is possible. 

The question is whether the North Koreans would go for such a 

deal, and I do not know, and I do not think anybody would know 

until we sat down and tried to do it. We did not know last time 

until we tried to do it. 

Senator AKAKA. I emphasized that because, in your statement, 

you said that, of the three, that was possible, and I just wanted to 

ask you about that again, and I thank you for your statement. 

We are concerned about North Korean reprocessing spent fuel 

into plutonium. Do you think if we reached another agreement 

with the North Koreans to end its nuclear program, do you think 

we would still be able to account for what has been reprocessed? 

Mr. GALLUCCI. Senator, right now, that is a slightly more complicated question than it was a few months ago. In 1994, the intelligence community—our intelligence community—assessed that 

North Korea, more likely than not, had one or two nuclear weapons. That was based on an assessment that they had reprocessed 

or could have reprocessed as much as 8 or 10 or so kilograms of 

plutonium, in that range, in any case. 

And so we had that assessment, and we did not, in the agreed 

framework, provide for the immediate inspections that would help 

us determine how much plutonium they actually had. However, the 

framework does provide that the North Koreans cannot get the 

major benefits of the deal, which were those two large light-water 

power reactors. They cannot get even the first bit of serious equipment for those reactors until they come clean with the IAEA, and 

we settled that issue. So that was part of the original deal. 

Now, we have not gotten to that point in the construction of the 

reactors, so we do not know what would have happened had we 

gotten there. The deal has collapsed for other reasons right now. 

At this moment, the reason I said it was more complicated, is because we have just heard that one of three things is true, either 

the North Koreans have, as they said at one point, just completed 

reprocessing the spent fuel, which they discharged from the reactor 

23

and was in a pond which contains about 30 kilograms of plutonium, enough for perhaps five or six nuclear weapons. 

They may have already separated that plutonium or, as we also 

heard from the North Koreans at another point, they are in the 

process of separating that plutonium or, as we also heard or might 

conclude, they have not yet started. 

So I do not know that we know, and I cannot go much further, 

on an unclassified basis, to talk about this, but what we do know 

about this I think is inconclusive at this point. 

Senator AKAKA. Thank you. I appreciate your response. I know 

it is touch and go, and I know you have had the kind of experience 

that a few have had. 

My time is almost up, Mr. Chairman, but I would like to ask Dr. 

Wortzel a question. 

I want to tell you that I share your frustration for negotiating 

with the North Koreans, and I agree that we must also negotiate 

multilaterally. And I also should tell you that I do not share your 

view that bilateral negotiations are a mistake. I think there is 

room for that. The administration just completed negotiations in 

Beijing that were essentially bilateral, even though Chinese diplomats were present in the room. 

In your testimony, you mentioned North Korea’s dependence on 

China for fuel and for food. How long and how far do you think 

China would go to use this dependence to force North Korea to 

change its policy, and do you think China would do so to the point 

of provoking a coup in North Korea? 

Mr. WORTZEL. Mr. Akaka, thank you for your question. 

Senator I spent I guess just about 5 years as a military attache 

inside China. I can say that in direct bilateral negotiations with 

North Koreans on the prisoner of war missing in action teams that 

the United States sent into North Korea, they were not easy to 

work with, but you could negotiate with them, you could reach an 

agreement. They kind of took you to the cleaners financially, but 

they lived up to their agreement. So there are times when you can 

do that. This is, obviously, a much more sensitive issue. 

As a military attache, I had the privilege of, at different times, 

escorting not only the minister of Defense of China, but the chief 

of their General Staff Department, the deputy chiefs of their General Staff Department, at one time probably every military region 

commander, at one time or another, at some rank. 

And I can tell you that, uniformly—in fact, one conversation was, 

‘‘Wortzel, you are a military intelligence officer. Report this back to 

your government. We will not let the Government of North Korea 

collapse, period.’’

Now, then we went into a very long discussion of what measures 

one could take, and what if there was an implosion or an explosion. 

I believe that is still the policy of the People’s Republic of China. 

They do not want to see a collapse. They do not want to see the 

United States or South Korean forces up on the border of China 

and the Yalu River. I do not think they want to see a nuclear 

North Korea, necessarily, either, mostly because of what it means 

for Japan. 

China supplies somewhere between 70 percent and 88 percent of 

North Korea’s fuel needs. I believe oil for food was 12 percent. 

24

1The prepared statement of former North Korean high-ranking government official appears 

in the Appendix on page 70. 

China supplies somewhere between 30 percent and 40 percent of 

North Korea’s food needs. They can modulate that, as they did for 

3 days in November, I think it was. But I think they are both the 

problem, and perhaps the key, to a solution, and that is why I 

think it is very useful that however diplomatic the facade was, that 

there were multilateral negotiations in Beijing. 

Senator AKAKA. Thank you very much for your response. 

Mr. Chairman, thank you. 

Senator FITZGERALD. Well, I would like to thank the gentlemen 

for appearing here before us. Your testimony was very enlightening. I appreciate your efforts, and we will submit your full statements for the record. 

And with that, I would like to now call on panel 3 and ask staff 

to make the necessary arrangements. 

The Subcommittee will hear from two North Korean defectors 

who have personal knowledge of and experience with a number of 

the issues we have discussed today. Both witnesses have requested 

that we protect their identities, and both witnesses will have interpreters. 

[Pause.] 

Senator FITZGERALD. Our first witness is a former North Korean 

high-ranking government official. He worked at a North Korean 

Government agency for 15 years and has detailed firsthand knowledge about drug trafficking and counterfeiting by the North Korean 

Government. For reasons he cannot disclose today, he defected to 

South Korea in late 1998. 

The second North Korean defector is a former missile scientist 

who is personally familiar with the manufacture, programming and 

deployment of missile systems. As the head of the Technical Department of a missile factory in North Korea, Bok Koo Lee—that 

is an alias that he uses—will testify to his personal knowledge of, 

and involvement with, the missile program in the factory town 

where he worked between 1988 to 1997. Mr. Lee defected from 

North Korea in July 1997. 

Gentlemen, thank you for being here today. You may proceed 

with your opening statements, beginning with the first defector, 

who is the former high-ranking government official. 

TESTIMONY OF FORMER NORTH KOREAN HIGH-RANKING 

GOVERNMENT OFFICIAL 1 [THROUGH AN INTERPRETER] 

DEFECTOR NO. 1. Mr. Chairman and Hon. Senators, I am the 

witness designated as the former North Korean high-level government official to testify about the drug production and trafficking by 

the North Korean regime. I would like to thank you and the American people for your concerns and interests to help save the North 

Korean people suffering under the worst kind of one-man dictatorship in the past 50 years. 

I worked at a North Korean Government agency for 15 years, 

where I was able to get detailed and firsthand knowledge about the 

drug trafficking by the North Korean regime. There are reasons 

that I cannot really explain here, but, nevertheless, for the reasons 

25

I cannot disclose, as I said, I defected to the Republic of Korea in 

late 1998. I now live in Korea’s capital city of Seoul and work to 

help save the people whom I left behind in North Korea. 

Production and trafficking of illegal drugs by the North Korean 

regime has been widely publicized for some years now. Recently, 

concerning the seizure of 50 kilograms of heroin, on a North Korean ship named ‘‘Bongsu,’’ by the Australian authorities has confirmed again that North Korean regime has been very busy making 

and selling the illegal drugs to other countries in order to support 

the cash-strapped regime. North Korea must be the only country, 

as far as I can tell, on the entire globe to run a drug production 

trafficking business on a state level. 

North Korea started its production of drugs secretly in the late 

1970’s in the mountainous Hamkyung and Yangkang Provinces. 

North Korea began to produce and sell drugs in earnest beginning 

in the late 1980’s, and that is the time when Kim Il-sung, of North 

Korea, who is the leader of that country, toured Hamkyung-Bukdo 

Province and designated the area around Yonsah Town in 

Hamkyung Province to be developed into an opium farm. It was 

known that the Japanese colonial government also used this area 

to grow opium, and Kim Il-sung told the people to earn hard currency by growing and selling opium because he needed cash. 

The local party province committee developed an experimental 

opium farm in Yonsah Town in secret, and the farm was tightly 

guarded by the security police officers. They began to produce 

opium at the collective farms located in towns like Yonsah, 

Hweryung, Moosan, and Onsung in Hamkyung-Bukdo Province. All 

opium produced, thus, produced in these farms were sent to the 

government to be processed into heroin. They called these opium 

poppies the broad bellflowers in order to hide the operation from 

the general public, but this was an open secret because everybody 

knew what that was all about. 

North Korea had very little to export since the early 1990’s because 90 percent of their factories became useless for lack of raw 

materials and energy. They tried to export mushrooms, medicinal 

herbs and fisheries to China, Japan and South Korea. However, the 

only way to bring in large sums of hard currency was to sell drugs 

to other countries and to smuggle in used Japanese cars in turn. 

In the late 1997, the Central Government ordered that all local 

collective farms must cultivate, grow, for the area of about 10 

chungbo, that is, about 25 acres, of a poppy farm beginning in 

1998. The Chinese Government somehow learned about this and 

then dispatched reporters and police officers to take pictures of 

these farms near the border. 

All opium thus produced are sent to the pharmaceutical plants 

in Nanam area of Chungjin City in Hamkyung-Bukdo Province. 

They are processed and refined into heroin under the supervision 

of seven to eight drug experts from Thailand, and this is all done 

under the direct control and strict supervision of the Central Government. 

I heard that there is another opium processing plant near the 

Capital City of Pyongyang, but I have not confirmed this myself. 

These plants are guarded and patrolled by armed soldiers from the 

26

National Security and Intelligence Bureau of North Korea. No outsiders are allowed in these facilities. 

North Korea produces now two types of drugs: heroin and methamphetamine, which is called in Korean, ‘‘Hiroppon.’’ They produce 

these drugs one ton a month each. Heroin is packaged in boxes, 

each containing 330 grams—that is about 11.6 ounces—of heroin, 

and those boxes have a Thai label. Methamphetamine is packaged 

in boxes each containing about 1 kilogram of the substance, but 

has no label. 

In China, near the border, the drugs are sold for $10,000 per 

kilogram. And through the ocean on board, these drugs are sold for 

$15,000 per kilogram. North Korea sells these drugs, through the 

border with China, to China or, through the seas, Hong Kong, 

Macao, Russia, Japan, Russia, even South Korea. They also deal 

with the international drug dealers on the Yellow Sea and Eastern 

Sea. Their major markets are, of course, Japan. 

It has been no secret that the North Korean regime has used its 

diplomats and businessmen for drug trafficking, using all means 

possible. In November 1996, a North Korean diplomat who was stationed in Moscow, Russia, was caught by the Russian border police. 

When he was caught, he had 20 kilograms of illegal drugs with 

him. He later committed suicide in the prison. 

Things were desperate in North Korea. In December 2001, South 

Korean authorities found a big shipment of illegal drugs at the 

Port of Pusan, but South Korean authorities did not identify the 

source of that drug shipment, but it was well known, I have no 

doubt, that this shipment must have come from North Korea. 

I have a list of instances involving North Korean drug trafficking 

as follows: 

In July 1995, an agent of the North Korean National Security 

and Intelligence Bureau was caught by the Chinese police when he 

tried to smuggle in 500 kilograms of heroin. 

In November 1996, a North Korean lumberjack working in Russia was caught at Hassan Station with 22 kilograms of opium. 

In May 1997, a North Korean businessman was caught in 

Dandung, China, when he tried to sell 900 kilograms of methamphetamine. 

In July 1997, another lumberjack was caught in Havarovsk, in 

Russia, with possessing 5 kilograms of opium. 

In January 1998, two North Korean diplomats stationed in Mexico were caught by the Russian police officers when they tried to 

smuggle in 35 kilograms of cocaine. 

And in July 1998, two North Korean diplomats stationed in Russia [sic] were arrested when they tried to smuggle in 500,000 capsules of psychotomimetics, which is a kind of stimulant. 

It is my view, given the fact that North Korean regime is confronting a very critical crisis and economic dire situation, that 

short of international measures, strong and effective measures on 

the part of the international community, North Korea will continue, in my view, to produce and sell drugs. 

North Korea is the only country on Earth that grows opium 

poppy, processes it into heroin and sells them abroad. I, again, 

would like to urge a stern measure on the part of the international 

27

1The prepared statement of Mr. Lee appears in the Appendix on page 73. 

community to cope with this dire situation of North Korea involving drug trafficking and selling. 

Senator FITZGERALD. Thank you very much, Defector 1. 

And now we will proceed to the second North Korean defector. 

He is, again, a former missile scientist who is personally familiar 

with the manufacture, programming, and deployment of missile 

systems. 

Thank you for being here, and you may proceed. 

TESTIMONY OF BOK KOO LEE [ALIAS],1 FORMER NORTH 

KOREAN MISSILE SCIENTIST [THROUGH AN INTERPRETER] 

Mr. LEE. Thank you for inviting me to this hearing. 

My name is Bok Koo Lee. I defected from North Korea on July 

21, 1997. Between 1988 until July 1997, that is, 1988 until July 

1997, I worked at Munitions Plant No. 38 in Huichon, Jagang 

Province, North Korea. There are 11 subplants at this munitions 

complex, also known as Chungnyon Jeonghi Yonkap Kiupso, meaning Youth Electric Combined Company. Among the 11 subplants, 

Nos. 603 and 604 produced and assembled missile parts. The parts 

we produced are all electronics. I held the position of head of Technical Department at Subplant 603 until I left North Korea in July 

1997. 

The responsibilities of the technical department are assembly 

and development of parts for missile guidance control vehicle, as 

well as developing the software. The missile launching units are 

made up of these control vehicles and the transport vehicles. 

In the interest of time, I would like to talk mainly about one of 

my experiences on this missile guidance control vehicle. 

In the summer of 1989, as we were ordered by the Second Economic Committee, which controls all munitions industry in North 

Korea, I, together with five colleague engineers of mine, went to 

the Nampo military port in Nampo City, South Pyongyang Province. 

When we arrived at Nampo, a cadre from the Second Economic 

Committee greeted us and issued camouflage uniforms for the military, and we changed into them before we boarded a ship. Since 

we were locked under the deck and could not see outside, I do not 

know exactly how long, but the voyage seemed to have lasted about 

15 days, according to our eating and sleeping pattern. 

When we docked at a port, we went to the stern of the ship, and 

there we found and boarded a missile guidance control vehicle that 

we built in North Korea. I knew then and there that we were about 

to test launch a missile. With the windows of the vehicle blocked, 

we traveled for about 2 days inside this missile guidance control 

vehicle before it stopped, and our military commander told us to be 

ready for battle. 

So we opened the windows and the back door, too, in order to 

connect the power supply. That is when I heard someone’s voice 

from outside, and when our commander walked up to him, I could 

see that the man was an Arab. ‘‘I must be in an Arab country,’’ I 

thought. 

28

About 10 minutes later, the commander yelled, ‘‘Storm,’’ which is 

the battle order in North Korea. Each of us took up his position inside the vehicle to man this equipment, and then we put it ready 

in sequence. In a few minutes, the commander gave us the order 

to launch, and we transmitted the launch signal. 

About 20 minutes afterwards of transmitting guidance control 

signals, the commander relieved us of our duties. Since the missile 

was not nearby, we could not see. And when the launch was over, 

we left in a hurry, leaving our control vehicle there, and rode another military vehicle to come back to the ship we were on. 

The next morning, the ship began its journey back to Nampo, 

which also took about 15 days. From there, we rode on a bus from 

Nampo to arrive at an annex building of the Party Central Committee in Pyongyang. The routine debriefing took as long as 15 

days. We did not have much to report, but the debriefing of our superiors took 15 days. 

When the debriefing was over, Kim Chol Man, then chairman of 

the Second Economic Committee, gave us some gifts, complimenting our mission, which he said was to Iran. 

After our return to the plant, I learned from Lee Byung Su, the 

chief engineer in charge of Technical Improvement, that Yon Hyong 

Muk, then-Premier of North Korea, accompanied us to Iran, and he 

brought back to North Korea 220,000 tons of crude oil. These 

220,000 tons of crude oil was taken by the military with the order 

of Oh Jin-u, the head of Armed Forces. And when the fact was revealed to Premier Hyong, he had a big fight with Oh Jin-u before 

Kim Il-sung about this, and he ended up taking back some of the 

oil from the military. 

After our trip, Subplants 603 and 604 began producing the same 

missile guidance control vehicles as we took to Iran. Since then, we 

produced nine such vehicles over a few years and exported them 

to Arab countries. Or course, we also produced and still produce, 

I believe, parts for other short- and medium-range missiles. 

Additionally, I would like to testify on the participation of North 

Korean missiles during the first Gulf War of 1991, the removal and 

relocation of Yongbyon nuclear facilities to somewhere else, and 

about the Kumchang-ri Cave during the closed session. 

One final thing I would like to stress in this hearing is the fact 

that in order to bring about the collapse of North Korean regime, 

the munitions scientists like myself, in and outside of North Korea, 

must be aware of the existence of safe harbors in the West which 

will take them. Then, more scientists will escape North Korea to 

seek asylum and the production of weapons of mass destruction, 

such as nukes and missiles, will be severely curtailed, eventually 

to the point where there is no more people left to push that nuclear 

button. 

It has been so long since the loyalty to Kim Jong-il by North Koreans have collapsed. If one sings well, there is an ample reward. 

Whereas, the scientists, like myself, will get mere briefcases, ballpoint pens and Kim Jong-il’s monologue for their achievement. 

Therefore, no one hardly strives to develop new things any more, 

but just occupies the desk. 

We urge you to mobilize the international community and do this 

to precipitate the collapse of North Korean regime. 

29

Thank you very much. 

Senator FITZGERALD. Well, thank you both for testifying, and 

thank you for your courage in making yourselves available to this 

Subcommittee. 

I want to start with Defector 1. Our State Department witness 

said that we do not have any satellite evidence of poppy production 

in North Korea. Based on what you know about North Korea’s cultivation of poppy, is there a reason why we could not see the poppy 

fields with our satellites? 

DEFECTOR NO. 1. It is surprising to me that satellite pictures 

could not catch, satellites could not catch the poppy farms in North 

Korea because, as I said earlier, since 1998, there were all poppy 

farms about 10 chungbo, I think it is about 30-some acres, was put 

aside for the sole purpose of cultivating poppies only. And Chinese 

police officers and Chinese reporters came to the border, and they 

took the pictures of these farms. I am just flabbergasted that satellites or the United States could not have access of this or 

ascertained this kind of agricultural activity growing poppies. 

Senator FITZGERALD. The poppy fields that you described, did you 

personally see those poppy fields? 

DEFECTOR NO. 1. Yes, numerous farms myself, with my naked 

eyes. 

Senator FITZGERALD. Were you personally involved in trafficking 

heroin, as a high-ranking officer of the North Korean Government? 

DEFECTOR NO. 1. Yes, there was a time I was directly involved 

in the trafficking, the drug trafficking myself, and I am confident 

that the drugs seized, after North Korean Ship Pong Su was seized 

by the Australian authorities, I am sure those drugs are North Korean products. 

Senator FITZGERALD. Were you directed by your superiors in the 

North Korean Government to traffic in the drugs you trafficked in 

or were you doing that on your own? 

DEFECTOR NO. 1. There is nothing in North Korea a person can 

do voluntarily to help the regime. And especially speaking of production and selling, trafficking drugs, and processing or growing 

poppies and processing poppies into heroin, these are all done on 

the state level, as a state business, and they do this as a means 

of acquiring or earning, as they say, hard currency. 

Senator FITZGERALD. So was it your job, working for the North 

Korean Government, was it part of your official duties to traffic in 

drugs? 

DEFECTOR NO. 1. Well, there are several reasons. I cannot really 

specify here, especially about certain things I did myself, but I can 

tell you this much. I can assure you that production, the sale and 

trafficking of the drugs is done, it is not because somebody wants 

to get involved in that kind of business, but they are told to do so. 

Therefore, they are doing it, and they are told directly by the highest authority in North Korea, the one who has most power. 

Senator FITZGERALD. So it is safe to conclude, from your testimony here today, that the North Korean Government is in the 

business of producing and trafficking in drugs like heroin. 

DEFECTOR NO. 1. Yes, sir, my answer is positive. Of course, that 

was the situation, and North Korean regime, since mid 1970’s, 

when its economy or economic situation started deteriorating, they 

30

started growing and trafficking drugs as a part of national policy, 

and it has been that way even today. 

Senator FITZGERALD. Do you have any idea how many people the 

North Korean Government employed in its drug production and 

trafficking business, at least while you were there? 

DEFECTOR NO. 1. Well, I can tell you that at least 30 people that 

I personally knew were involved in trafficking, drug trafficking and 

selling drugs, just to give you this as an example, what limits I 

have, directly had. I am just curious this thing that is the fact that 

the highest, most powerful authority in North Korea have his people to engage in production and trafficking drugs, it is not known 

to the United States or the international community. Because of 

the absolute power that North Korean leader has, anything is possible, as far as he is concerned. 

Senator FITZGERALD. Well, Defector 1, thank you very much. 

That has been very powerful testimony. 

I would like to ask some questions of Mr. Lee. 

Mr. Lee, based on your personal experience and knowledge, does 

North Korea currently have nuclear weapons? 

Mr. LEE. I am not a nuclear scientist, so I cannot give you ‘‘own 

hand’’ response, but I do believe there are nuclear weapons in 

North Korea. 

Senator FITZGERALD. Mr. Lee, you testified in detail about your 

own mission to a country that you believe was Iran to do a demonstration of a North Korean missile. Are you aware, personally, 

of other such missions, and do you know to what countries those 

missions have been? 

Mr. LEE. Yes, I do. 

Senator FITZGERALD. You indicated to my staff that the North 

Korean missile industry depends entirely on foreign imports. Can 

you go into greater detail about that dependence on foreign imports? 

Mr. LEE. I worked for 9 years as an expert in the guidance system for North Korean missile industry, and I can tell you definitely 

that over 90 percent of these parts come from Japan. And the way 

they bring this in is through the Chosan Sur [ph] and the North 

Korean Association inside Japan, and they would bring it by ship 

every 3 months, and we would go out to the port, at times, when 

we are in a hurry and pick them up ourselves. 

Senator FITZGERALD. Were those parts smuggled from Japan into 

North Korea or did North Korea purchase those parts? 

Mr. LEE. I am sure it is informal. The ship that is used to ferry 

these parts is called Man Gyong Bong, and this is a passenger ship. 

It is not a freighter, so it is the smuggling. 

Senator FITZGERALD. Mr. Lee, do you have any information on 

North Korea’s nuclear program and the Yongbyon nuclear facility? 

Mr. LEE. I do not have profound knowledge about the North Korean nuclear development structure, but I was nearby when there 

was this issue about IAEA inspection a long time ago. 

Senator FITZGERALD. Mr. Lee, you were a scientist in the missile 

program. As a scientist in the missile program, were you at all 

aware of the country’s trafficking in drugs, as testified by Defector 

1? Did you have any knowledge of that? Does that come as a surprise to you or do you believe that testimony? 

31

Mr. LEE. I knew already that from 1999 the collective farm had 

certain parcels allocated for the poppy cultivation. Each collective 

farm had to cultivate poppies. 

Even in the area where I worked, where the Munitions Plant No. 

38 is located, they developed a poppy field in Oh Su Dong [ph], 

Joongang Gun [ph], Jagang Province, from 1994. To do this, 2,000 

reserve military was mobilized, and they were put in to cultivate, 

to develop the poppy field. And because they lacked the housing, 

we were also mobilized to build housing for these reserve servicemen who were put in to develop the poppy fields. 

When I left in 1997, through that route in that neighborhood, I 

could see the poppies were growing there. I could see the poppy 

fields. In the fall, when they usually harvest these poppies, they 

would use the students, and when they do this, they would send 

the students in, and when they are done, they would frisk them 

with only briefs on so that there is nobody would take away these 

poppies. 

Senator FITZGERALD. I just want to be clear on that. You recall 

2,000 military personnel being directed to work on growing poppies? 

Mr. LEE. The servicemen who have just been discharged. 

Senator FITZGERALD. So they were men who had been discharged? They were put to work——

Mr. LEE. As soon as they were discharged, they were put to work 

to develop these poppy fields. 

Senator FITZGERALD. And then students were used to harvest 

them? 

Mr. LEE. To harvest them, yes, that is correct, sir. 

Senator FITZGERALD. Well, gentlemen, thank you very much for 

this testimony. At this point, I would like to ask you both to stay 

there. We are going to go into our closed session now. 

As I previously announced to the audience, I would now ask that 

the Capitol Police and security staff prepare the hearing room for 

a closed session. I also ask that members of the audience and the 

media please leave the room at this time. 

As a reminder to Senate staff, this closed session will be conducted at the unclassified level. 

[Whereupon, at 5:01 p.m., the open Subcommittee meeting was 

adjourned.] 

(33)

A P P E N D I X 


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Æ


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