Must Read: On N. Korean Counterfeiting

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1. Dear Josh,

   I posted a comment, then Previewed it – but I fear it has vanished.

   Basically I don’t think this piece is that great. See below.

   cheers
   Aidan FC

   _________
   Dear all,

   Very many thanks to David K for flagging this up.

   He gives no source, but I see it is in today’s Independent:
   http://www.independent.co.uk/news/world/asia/counterfeiting-notes-on-a-scandal-1776329.html

   I’m still ploughing through it. Alas, my initial excitement at
   so solid-seeming a study has been dented by the fact that he
   gets the Irish politics completely wrong.

   Sean Garland may indeed be flogging NK supernotes,
   though his innocence is loudly protested at http://www.seangarland.org

   But as to his wider political role, he and the Official IRA turned
   away from violence early. And contra the ignorant Samuels,
   Sinn Fein The Workers’ Party has won several seats.

   – And I won’t go on, coz I’ve just noticed that someone makes
   these points on the Indy website. See below.

   Who is David Samuels anyway?

   yrs in puzzlement and annoyance that ‘investigative journalists’
   can be so pignorant of basic facts,

   Aidan

   Aidan Foster-Carter

   Honorary Senior Research Fellow in Sociology & Modern Korea, Leeds University, UK

   Flat 1, 40 Magdalen Road, Exeter, Devon, EX2 4TE, England, UK

   T: (+44, no 0) 07970 741307 (mobile); 01392 257753 Skype: Aidan.Foster.Carter

   E: afostercarter@aol.com, afostercarter@yahoo.com W: http://www.aidanfc.net

   _________

   At end of the second paragraph the author made such howler as to lose all credibility
   cpmack wrote:
   cpmack wrote:

   Monday, 24 August 2009 at 09:14 am (UTC)

   “‘the Official IRA’ or OIRA, which rejected the idea of a peace deal in favour of the continuation of bombings, bank robberies and other politically-motivated crimes.

   Anyone remotely familiar with Ireland or the IRA would know that the IRA split into the “Provisional IRA” and the “Official IRA” in 1969 and the “Officials,” known as the “stickies,” and that the OIRA declared a ceasefire in 1972 and has not been active since about 1975. This entire sentence is therefore a complete howler of an error, one that should not have made it into the article. It is so ludicrous a statement that from that point onwards any knowledgeable reader would discount the rest.

   But no, it gets worse – “Irish Workers Party that had never elected a single one of its members to any mainstream political body,” would that be Sinn Féin – the Workers Party, the “The Workers Party,” now called “Democratic Left”? which has indeed had members elected to counsels and the Dáil (Parliament), including such prominent politicians as Proinsias De Rossa, Pat Rabbitte, Eamon Gilmore, Eric Byrne, Pat McCartan and Joe Sherlock – who left Garland behind after the party split.

   Wow, to make a mess of the first two paragraphs is pretty inexcusable — Garland’s background is in fact pretty well known…

2. Sorry you had trouble with the comments. Nothing was stuck in the spam filter or the moderation cue.

   As for the Irish politics angle, I’m no expert on the subject, so I wouldn’t have spotted the errors. I was really more interested in the details about North Korea’s supernote counterfeiting. But I suppose the fact that you’ve found mistakes in the article suggests that we should be circumspect about other details.

   We’d begun to see a wave of junk journalism and conspiracy theories from various hacks (Klaus Bender, Kevin G. Hall) who obviously have motives that transcend the evidence. It’s gratifying to see that refuted. Obviously, the Obama Administration is leaking some of this information, but journalists are also quoting folks like David Asher, and I don’t think his puppet strings run back to the White House. And when stories like this get publicized, it’s difficult to flip a switch at some moment of convenience and pretend it’s not happening.

3. A modest proposal: redisign the $1 and $2, and issue new denominations: $4, $8, $16, $32. Binary currency for the digital age.

4. Ignoring the problem with Irish politics, is there any evidence of N. Korean currency counterfeiting in the Independent article? I only see accusations.
   I also see no evidence in the recent Vanity Fair article. In that article, Wilson Liu, the one person who could provide first-hand information about N. Korea involvement in currency counterfeiting, decided to clam up, apparently fearing death at the hands of N. Korean operatives. The imprisoned Mr. Liu seems to think that if he opens up US law enforcement officials will be unable to protect him. Or maybe he is worried about his US-based family.
   By some measure the articles may be “first-rate,” but not the evidence, which is absent. If not the VF and Independent articles, what else is there of late that provides evidence?

5. Read this and this, and the articles linked there. They’re all accusations — from former senior government officials and investigators, who put them all into an indictment that was killed not for lack of evidence, but for political reasons. We know all of the details, right down to the name and place of the printing house and the name of the North Korean general who is orchestrating the whole operation.

6. The June 2, 2009 Bill Gertz article relies on “a foreign-government report obtained by The Washington Times from a diplomatic source in Washington.” Here I’ll take OFK’s advice in the blog post that presented the article, which applies equally to unnamed reports: “The problem with making an assertion . . . based . . . entirely on the word of one unnamed source is that readers have no idea who that source is, what biases he may hold, or what basis exists for his assertion.”
   The Vanity Fair report, as I already noted, has no evidence at all.
   You dismiss Newsweek’s Takashi Yokota for quoting an American official, who said: ““The Treasury Department couldn’t find a single shred of hard evidence pointing to North Korean production of counterfeit money.” But isn’t that what we* all want — hard evidence?
   You also write: “They’re all accusations — from former senior government officials and investigators, who put them all into an indictment that was killed not for lack of evidence, but for political reasons.” I’m ready to believe a draft indictment exists. Where is it? In the meantime, as you say, it’s “all accusations.” In other words, not “a single shred of hard evidence.”
   *we=those interested in evidence of North Korean criminality

7. I certainly look forward to the filing of the indictment as much as you do, but I doubt anything in it would persuade you. Do you suppose North Korea would permit us a tour of Pyongysong Printing House Number Six if the U.S. Attorney issued a subpoena? What exactly do you expect in the context of the world’s most secretive nation? Do you wish to propose an alternative theory, perhaps?

8. If the indictment (or any other law enforcement or government document) has or points to verifiable evidence, that will persuade me. In the meantime, anonymous soures in Vanity Fair, Independent and Washington Times reports do not persuade me, for the very reason you yourself wrote (quoted in an above comment).
   So, if not these three recent reports, is there anything else that might attach a name of a person or an accountable govt. agency to evidence?
   “Do you wish to propose an alternative theory, perhaps?” An alternative theory to what? Lack of evidence? Of course I don’t. Lack of evidence stands on its own and doesn’t need alternative theories.

9. You obviously didn’t follow the links. David Asher is not an anonymous source. He is a former State Department official who has personal knowledge and went on the record with it. Retired FBI agent Bob Hamer, who worked the case, also went on record, as did former Treasury official Juan Zarate and former DOJ prosecutor Suzanne Hayden.

   Read together, the stories lay out the anatomy of the North Korean operation in great detail and are substantiated by the specific allegations of people who are speaking on the record and based on personal knowledge — something Takashi Yokota’s source does not do. I’ve taken plenty of cases before juries and obtained convictions based on testimony — accusations, if you will — alone. If you’re asking for video of the inside of the printing plant or Kim Jong Il’s DNA stains on the notes, you’re obviously just trying to raise the bar rather than examine the evidence objectively. As much as I wish I had the time to go indexing each of these reports for your personal convenience, I just don’t, so feel free to actually read them before we continue this discussion.

10. 1. I have not adjusted the bar up or down. So far in examining the Independent, Vanity Fair (VF) and Washington Times reports I have applied the standard of proof stated by One Free Korea on June 3, which I again quote: ““The problem with making an assertion . . . based . . . entirely on the word of one unnamed source is that readers have no idea who that source is, what biases he may hold, or what basis exists for his assertion.” As the three reports rely heavily on anonymous sources they do not meet this standard.
    Speaking of bars, I’m unclear on which bar or standard of proof you want to apply: the one above, the one used in (which?) courts of law, the one stated in point #3, or something else? Please pick one and I’ll do my best to stick by it.
    2. Regarding former State Dept. official David Asher, retired FBI agent Bob Hamer, former Treasury official Juan Zarate & and former DOJ prosecutor Suzanne Hayden, I have followed the links you provided. Some excerpts and brief comment:
    a. Asher: Let’s apply another OFK standard of proof, as stated on the OFK website on Aug. 14. Has Asher ever provided one “completely [. . .]supported and thus [non-]risible allegation” of N. Korean currency counterfeiting? If yes please provide one example from any time in the 10-year or so history of Asher comments to the media.
    b. Hamer: According to the VF article Hamer received supernotes from a Chinese or Chinese-American supplier. Where is there any proof in that or any other article that the supernotes came from N. Korea?
    c. Zarate: From VF: “”The Banco Delta was critically important to the regime,” says Juan Zarate, the senior official behind the Treasury Department’s action. (Zarate later became Bush’s deputy national-security adviser.) “Designating it compelled other institutions, especially Chinese ones, to realize that they risked jeopardizing their own business relationships with the U.S.” That, in turn, “gummed up North Korea’s ability to operate in the normal financial world—for example, to issue letters of credit in dollars to pay for what they were doing,” including arranging payment for parts for new missiles.”
    All true or likely true. But how is this proof of N. Korean currency counterfeiting or any other kind of illicit financial activity?
    d. Hayden: Again, from VF: “”The criminal cases would have provided the evidence. It would have been in the indictments. As with any money-laundering investigation, we would have identified the players and traced them back, from Macao to those who were behind it in North Korea.” Hayden spent several years attached to the International Criminal Tribunal for the former Yugoslavia, working on the case against the Serb leader Slobodan MiloÅ¡ević and his financial criminality. She sees close parallels between his activities and Kim Jong Il’s: “The most difficult thing is connecting evidence of criminality to a state’s leader, because there is so much deniability built in. But there isn’t a whole lot of activity in North Korea that isn’t sanctioned by the leadership, and the evidence we had already built up was very good. These cases were very doable.””
    Alas, so close yet so far. There’s good evidence, says Hayden, but apparently it will never see the light of day, for matter of state reasons. (But currently the relevant state is going all out to impede N. Korean financial & trading relations with the world. Curious that thus far it has held back on using a juicy and fairly up-to-date draft indictment.) Leaving aside what run-of-the-mill seekers of objective evidence might think, how would a court of law handle such a situation?
    * * *
    Let’s forget such troublesome matters as reports indexing. All I want is one piece of publicly available evidence, no matter how tiny or how old, of N. Korean involvement in currency counterfeiting that might meet either of the two OFK standards of proof stated above. Is there just one? Your use of ridicule on June 3 indicates that you do believe “a shred of recent evidence of North Korean counterfeiting” exists (but please forget “recent”).
    If not counterfeiting, how about OFK-standards-meeting evidence of N. Korean involvement in any kind of illicit financial activity? I’ll grant that N. Koreans were involved in passing supernotes (face value of $160,000 worth, possibly of Chinese origins) to BDA in Macao in 1994, as stated by BDA principal shareholder Stanley Au in a publicly available petition submitted to US Treasury in May 2007. Anything since then up to OFK standards?
    A final point: N. Korea is quite guilty of certain kinds of criminal behavior. Japanese abductees, for example. As for counterfeiting/other illicit financial activity, I am seeking evidence, not unsupportable accusations. Public admissions of guilt by N. Korea, as in the case of the abductees, also work.

11. Apologies for the continuation. When I hit “Preview Comment” and then returned to the comment page to make changes, the website slowed considerably. Running out of time I hit the submit button and sent what I had.
    One slight amendment to point #1 in my previous comment, a request to OFK: Please choose a standard of proof that can guide further discussion and make that standard explicit in your next comment. Thank you.
    As for Newsweek’s Takashi Yokota, I am not making any judgment about his use of an anonymous US govt. source. I just wonder why OFK rejects the Yokota source but accepts or trusts, say, the report of unknown origins in the Bill Gertz piece. I hate to repeat myself, but I’ll quote again the commendable OFK standard of proof that in my view should be applied consistently: “The problem with making an assertion . . . based . . . entirely on the word of one unnamed source is that readers have no idea who that source is, what biases he may hold, or what basis exists for his assertion.”
    Asher, Hamer, Hayden, etc. Yes, those are names. But given what I am asking for and OFK seems to think exists by way of evidence (a belief OFK makes explicit in previous blog posts but, interestingly, not yet in this string of comments), what proof have they provided? Just give me something, anything public and verifiable from any article/report from any point in time and I’ll turn my attention elsewhere (or in any event will have to if nothing exists).

12. John, I see you don’t agree and I can accept that. I’m not a prosecutor, you’re not a juror, and I haven’t assumed the obligation to authenticate exhibits, admit them into a tribunal, and prove this case beyond a reasonable doubt. You’re free to disbelieve the evidence and demand what you know very well the nature of Kim Jong Il’s regime makes impossible to obtain. If I went down the path of responding to all of the repetitious gainsaying in your long harangue, I’d have no time to write anything that’s actually interesting to anyone else. You or anyone else can see that Yokota’s one-source anonymous whisper campaign isn’t remotely comparable to the detailed, on-the-record statements of multiple persons who have investigated the supernote allegations. If you’re looking for the best evidence, go to them, not me.

    By the way, I see you’re writing from Tokyo. Purely coincidental, or do you have some stake in this discussion that you’d like to tell us about?

13. Dear Joshua Stanton:
    Please be reasonable.
    Said the salesperson to the customer: “Ma’am, if you don’t know anything about our store’s line-up of lamp products, please read over this 50-page catalogue and ask me questions.”
    Customer reads catalogue, and after firing off a half dozen questions, is interrupted by the salesperson, who asks: “Ma’am, why are you haranguing me about lamps?”
    I took your advice to “follow the links” and “actually read [the linked reports] before we continue this discussion” of alleged N. Korea involvement in currency counterfeiting. I read the information, commented on some of the key bits, and now you accuse me of a “long harangue.”
    Damned if do, damned if I don’t.
    I have not asked you to “authenticate exhibits, admit them into a tribunal, and prove this case beyond a reasonable doubt” or provide the “best evidence.” These are straw man arguments.
    I asked you to point me not to the “best evidence” of currency counterfeiting but to any evidence, no matter how tiny or how old. To make things easier, I expanded the bounds. Let’s see evidence of any kind of illicit financial activity, I said. Evidence that meets either of the two One Free Korea standards of proof, as stated on the website on June 3 and Aug. 14. Or, as I put it, evidence that is verifiable and in the public domain.
    So far, nothing.
    Alternatively, I invited you to establish any standard of proof you wish to guide the discussion.
    No reply.
    There’s no work for you to do, except supply a link or links, and choose a standard of proof, preferably one of your own already stated, for the sake of consistency across the dozens of counterfeiting/financial crime references on your website and your multiple acceptances/rejections of bearers of accusations and purported proof.
    You wrote: “You’re free to disbelieve the evidence and demand what you know very well the nature of Kim Jong Il’s regime makes impossible to obtain.”
    Again, what evidence? So far you have only provided links to articles in which people make unsupported accusations (and, except for the alleged secret draft indictment, impossible to prove in the future too, it seems) or statements irrelevant (such as on the strategic intent of the BDA blacklisting) to a presentation of proof of N. Korean financial criminality.
    Twice you have commented on the “nature of Kim Jong Il’s regime,” which “makes [it] impossible to obtain” evidence. How true. The flip side of this statement is that outside of that secretive, closed regime there is no proof of financial criminality.
    N. Korea may be the worst financial criminal empire in the world. Or among the worst. But where’s the proof?
    For some six months I have enjoyed reading the One Free Korea blog. I will continue to enjoy reading it. From the blog posts, comments and links to articles I have learned many things about North Korea and how it is viewed by the rest of the world. Your blogging/research efforts are admirable and highly appreciated.
    One thing I have learned over the past several days is that One Free Korea cannot point to a single shred of supportable evidence of N. Korean involvement in currency counterfeiting or any other illicit financial activity.
    I am John McGlynn writing, currently, from Tokyo. Two years ago I wrote about the BDA case and the lack of verifiable evidence of N. Korean involvement in financial crime for the Asia-Pacific e-journal (www.japanfocus.org). I have also written about other matters.
    You asked me: “do you have some stake in this discussion that you’d like to tell us about?” I don’t know how to answer this question, except to say I would like to get as close to the truth as possible. I shall add (in case your meaning lies in this direction) that I have no financial or professional stake (to the best of my knowledge) in any group or person anywhere in the world affiliated with any business, NGO or government in either North or South Korea.