N. Korea investigating inter-Korea agency (misjudgement & purge)

The rare move comes as South Korea's President-elect Lee Myung Bak (above) said he would review cooperation projects with the North.

SEOUL - NORTH Korea is investigating allegations of corruption, such as trading aid goods on the black market, within its agency dealing with South Korea, Seoul's Yonhap news agency said on Saturday citing 'informed sources'.

North Korean leader Kim Jong Il ordered the investigation, saying the inter-Korea agency lacked supervision and was involved in corruption scandals, the sources said.

The rare move comes as South Korea's President-elect Lee Myung Bak said he would review cooperation projects with the North and make it harder for the communist neighbour to receive aid by linking handouts to progress on its nuclear disarmament.

The investigation, launched in September, has so far found officials working on inter-Korea projects received bribes and were responsible for selling some aid from South Korea on the black market, according to Yonhap.

The North's Kim said that 'those who took even one gram of South Korean flour should throw up', one source was quoted as saying.

North Korea, which suffers from chronic food shortages, usually relies on handouts from South Korea and China, as well as international agencies. -- REUTERS

There is more to this story than corruption. Kim Jong-il is angry that the inter-Korean agency, Dept. of Unification Front, completely misjudged the outcome of S. Korean presidential election last December. They told Kim that the candidate of the ruling party (Roh Moo-hyun's pro-North party) would be elected in the end. However, the oppostion candidate ended up being elected by a wide margin.

Now that Kim Jong-il set out to punish them, they are digging out any dirts on them, including those they used to ignore. They all took a little extra to keep for themselves when they get some aids or payment from S. Korea. These incidents may not have annoyed Kim Jong-il much. However, now that they got screwed up on their main mission, these infractions will be used against them.

However, there is an exception. One senior figure is now said to be charged with embezzling $1.4million from Kim Jong-il's personal slush fund, the bedrock of so-called "palace economy." This man set up a separate account at Banco Delta Asia, and divert into his account money sent to Kim. His wife made too many trips to Macau to take care of the account, which tipped off N. Korean security. This came out to the open when U.S. and BDA were cataloguing all N. Korean bank accounts at BDA in order to unfreeze them and return money to N. Korea.

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