The emergence of an elite more feared than the Supreme Leader

Tuesday 9th December, 2014

In the aftermath of Jang Song Thaek’s execution for “factional behaviour”, there has almost ironically emerged a class of elite in Pyongyang whose patronage and confidence is considered worth much more than that of the Supreme Leader.

Among cadres in North Korea, there is talk that ‘While Jang Song Thaek was alive, the Internal Defence Force of the Ministry of People’s Security strictly monitored and severely punished – to the point of execution – even the smallest infraction that was at odds with observance of the “Supreme Leader centred transcendental guidance system”.

‘But nowadays, while the guidance system continues to be enforced for the rest of the populace, some among the elite consider themselves above these laws and behave in even more factional ways than Jang Song Thaek himself.’

The premise is that a class of financial elite in Pyongyang, who are all offspring of North Korea’s high level cadres, openly parade their wealth and influence – in a manner unthinkable under the rule of Kim Jong Il – and that other cadres are seen to grovel in their presence.

Particularly, there are said to be hushed criticisms among cadres about the Ministry of State Security (MSS), which is supposed to conduct surveillance and crack down on hoarding, circulation and black-market transactions of foreign currency as part of its remit of control over exchanges with the outside world.

None dare loudly say, yet cadres feel that the ministry has lost its justification for this control authority when the Minister of State Security and nominally the top cop, Kim Won Hong, has a son leading such activities in Kim Chul.

Senior cadres and those engaged in foreign currency businesses refer to Kim Chul, who heads the trading company Chungbong Trading, as “little MSS director” and he is well known as a multi-millionaire.

In addition to that moniker, it is in current use to refer to Kim Chul as “Chungbong Bank” or “Kim Jong Un’s Elder Brother” because through the business of Chungbong Trading, he is thought to be able to bring in whatever amount of capital he pleases and whenever it suits him.

In particular, in the earlier half of 2014, when many vehicles could not run, the fuel crisis was felt to be as severe as the food crisis was in the mid 90s, during the mass famine years also known as the Arduous March. Using this opportunity, the rights to fuel trading with China, which include the rights to import in order to sell into sectors of the DPRK domestic market, were monopolised and spearheaded by Kim Chul’s Chungbong Trading.

Choe Ryong Hae’s son Choe Hyun Chul too is said to be an “economic big shot”, to the point almost of rivaling Kim Chul. He is regarded as one of two major players controlling the sphere of North Korean trade, and it is said that Choe Hyun Chul likes to display his wealth and engage in indulgence in ways different from Kim Chul.

Kim Chul’s entourage is said to include taekwondo experts as bodyguards, while that of Choe Hyun Chul features beautiful women. In the past, the Ministry of State Security would have had to politically investigate them for such blatant displays of individually amassed wealth.

Those charged with earning North Korea’s foreign currency are said to mock Choe Hyun Chul behind his back by saying “like father like son” (it is well established that Choe Ryong Hae has also indulged in extravagance), or mockingly refer to him as “the deaf one”. The latter term is believed to stem from knowledge that Choe Hyun Chul has been mostly deaf since his youth.

In fact, when Choe Hyun Chul gets drunk, he is said to love to share indiscriminately how he enjoyed shopping and touring in Beijing while returning from a famous hospital in Singapore for an operation on his deafness.

Choe Hyun Chul is said to have become more of a negative fixture in people’s minds after being involved in a traffic accident. In that incident, the accused driver was investigated for traffic rules violations, but was said to have expressed anti-regime comments during that process, and was consequently executed by firing squad.

But because of circulating sentiments that the accused elderly driver was a gentle and simple-minded party member who was merely in the wrong place at the wrong time, it is said that many are angered at the “Choe Hyun Chul Traffic Accident”.

Ri Yong Ran, eldest daughter of deceased OGD first deputy director for military affairs Ri Yong Chul, is also said to be a leading figure in this class of capital-control elite. Most accept that Ri Yong Ran has become the adopted daughter of General Political Bureau director Hwang Pyong So, and Ri Yong Ran herself is often heard saying as much.

With regards to this, cadres whisper in furtive tones that when Kim Jong Il was alive, Hwang Pyong So used to boastfully claim that he banned his own children from earning foreign currency in order to preserve the revolutionary purity of his clan, but why now after Kim Jong Il’s death has he adopted another man’s daughter who rakes in foreign currency earnings?

It can be noted that inter-clan adoption had been considered to be in the exclusive permission-remit of the Supreme Leader.

After Jang Song Thaek’s execution, Hwang Pyong So re-subordinated Section 54 under General Political Bureau auspices and took it away from the Administration Department; Hwang appointed Ri Yong Ran as de facto charge of Section 54 by putting forward Ri Yong Ran’s experience as imports supervisor from the early years of Section 54, in 1996.

But when Kim Won Hong’s son Kim Chul began to intervene in the main rights to mines, fisheries and gold mines held by Section 54, Hwang Pyong So put forward the Defense Command of the Ministry of the People’s Armed Forces to instigate internal investigations into Kim Chul.

The dynastic conflicts are inter-generational such that even when the older generation dies, the major contradictions will remain unresolved. Moreover, the struggle for acquiring economic territory and trade rights will inevitably hold much more weight in determining distributions of power.

In the past, no matter that you were the offspring of a most elite cadre, one could not so boldly boast about money. In addition, during the previous era, the remits of trading companies were dependent on the institutional remit under whose auspices the company operated under.

Nowadays, those in proximity see that ‘It has become a completely different world – both remit and investment can managed to be pulled to trading companies from which individual offspring of current elite cadres, such as Kim Chul, Choe Hyun Chul or Ri Yong Ran, coordinate their business activities.’

Several people know that in October 2014, Ri Yong Ran went on about the confidence of a Chinese trading company to divert coal intended for the Pyongyang Thermal Power Plant.

Although the daily requirement of coal for normalising electricity supply for Pyongyang was supposed to have been ratified in Kim Jong Un’s name, the coal was stolen and Pyongyang suffered intermittent power outages for a month. An anonymous report to the Central Party was filed regarding the issue, but its author was tracked down and banished to the provinces on the grounds of having filed an anonymous report in an attempt to “deceive the party”.

Cadres are said to be murmuring that the appropriation of coal in defiance of the Supreme Leader’s ratification is an act of treason absolutely unimaginable under Kim Jong Il’s rule, and yet such an act of treason has happened so brazenly.

In the past, foreign currency earning activities were discreet and distanced as independently chasing currency amounted to renouncing loyalty to the Supreme Leader. But now, not only has it become a familiar sight to see cadres spontaneously bow when in the presence of one of the core capital-control elite, many try to get an audience with Kim Chul, Choe Hyun Chul or Ri Yong Ran by bringing cash. The word is that one needs at least two hundred thousand US dollars to spare to begin to get close to them.

In the previous era, those elite who led foreign currency earnings had to justify their activities under a premise of “showing loyalty to the Supreme Leader”, and no one dared openly flaunt personal influence and wealth.

Since the aftermath of the state’s economic collapse in the mid 90s, even as real value changed from absolute loyalty to the Supreme Leader into an uneasy symbiosis of loyalty and money, one could not admit it openly. But demonstrating adherance to old rules is no longer the concern for a select few.

(This exclusive New Focus report is an amalgamation based on ongoing correspondence.)

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