Courtesy: The Nihon Keizai Shimbun
Courtesy: The Asahi Shimbun
Courtesy: The Mainichi Shimbun
See the world in green and blue
Chapter closes in saga of LDP postal rebelsSo Nakagawa Hideanao (I am toying with calling him Nakagawa the Good, differentiating him from the head of the policy research council, Nakagawa the Barking Mad) held his ground, saving the LDP's shreaded reputation from annihilation.
The Yomiuri Shimbun
With their readmission, the latest development in the saga of the Liberal Democratic Party's postal rebels can be considered the close of a chapter.
The 12 postal rebels were among those ousted last year by the LDP over their opposition to the party's postal privatization policy. The group, which includes former Economy, Trade and Industry Minister Takeo Hiranuma, submitted a joint petition Monday, seeking to rejoin the party.
Of the 12, 11 also submitted written pledges to support postal privatization and reflect on their past antiparty conduct. The exception was Hiranuma who has not changed his stance of opposing the privatization of Japan Post. The 11 legislators are to be readmitted to the party.
While they had a difference of opinion with the party over the privatization of the postal services, the postal rebels share the party's views when it comes to political principles and basic policy issues such as national security, education and the Constitution.
As such, it was only reasonable for some to point out the absurdity of their being apart from the party.
Nonetheless, the turmoil within the party over the issue of readmitting the postal rebels has made it difficult for voters to understand the situation.
Support rating for Abe Cabinet plummets to 53 percent
Mainichi Interactive
The approval rating for the Cabinet of Prime Minister Shinzo Abe plummeted 14 percent from the previous poll to 53 percent, according to the results of a Mainichi Shimbun survey.
Behind the decline appears to be the government's slow response to the rise in suicides by schoolchildren after they were bullied at school and other problems related to education, as well as the LDP's move to allow rebellious legislators to rejoin the party, observers said.
Some experts pointed out that the public has been disappointed with Abe's lack of leadership, which has caused a split within the governing party.
Courtesy: Yahoo Japan News
Japan needs a more robust advisory body on national security at the prime minister's left elbow. However, membership in such a body cannot be just a reward for past glories and recent episodes of multiple aggravations of top bureaucrats.
An example of what I am talking about?
While not the most egregious appointment by any means, I cannot imagine what Sassa Atsuyuki will be bringing to this power conference. I love Sassa-sensei as much as anybody (How could people not think you the bees knees after all the accolades, not the least which is having Yakusho Kōji play you in a motion picture?).
Sassa-sensei, however, has been outside the mainline the security apparat for two decades. The years, furthermore, have also not been kind to him: he struggles to get around with a cane. Advising the prime minister on national security and steering him away from really dumb ideas of some of the panel's more irrepressible hawks will require tremendous reserves of energy--particularly with this Prime Minister, who is as slippery as an elver.
I just do not see that fire in Sassa-sensei anymore, nor in Ishihara Nobuo either.
However, what we have here may be only another example of Abe's love of showy commissions with numbing non-mandates.
See if you can spot the subtle lack of connection between the first and second paragraphs of yesterday's Yomiuri editorial:
Creating 'Japanese NSC' requires Abe to take lead
The Yomiuri Shimbun
China's growing military power, North Korea's nuclear test and other factors have drastically altered the security environment surrounding Japan, making it extremely important for this country to create a unified organ within the government that can pursue a strategic security policy and deal with a national emergency.
An advisory panel chaired by Prime Minister Shinzo Abe was launched Wednesday to enhance the functions of the Prime Minister's Office concerning national security.
Sectionalism ties govt's hands
Both the Foreign Ministry and the Defense Agency have been unwilling to help the Prime Minister's Office strengthen its authority over foreign and security affairs, apparently worried that their authorities in these fields could be undermined.
Courtesy: Yomiuri ShimbunUSS McCampbell to replace USS Gary at YokosukaSo the Aegis-equipped McCampbell (DDG-85) (9,217 tons, 153.9 m) replaces the guided missile frigate Gary (4,100 tons, 135.9 m).
Stars and Stripes Pacific edition
Sunday, November 19, 2006 - The guided-missile destroyer USS McCampbell will replace the USS Gary at Yokosuka Naval Base, Japan, the Navy announced Friday.
The Arleigh Burke-class McCampbell, currently based at San Diego, is scheduled to arrive at Yokosuka in June.
After a turn-over of duties, the Gary will return to the United States, the Navy said.
Ruling bloc-backed candidate wins election seen as test for US military move
A candidate backed by the ruling coalition won Sunday's closely watched gubernatorial election in Okinawa, where thousands of U.S. forces are based, electoral officials announced.
Hirokazu Nakaima, 67, a bureaucrat-turned-former utility president with support from Prime Minister Shinzo Abe's ruling Liberal Democratic Party-Komeito coalition, collected 347,303 votes, narrowly beating Keiko Itokazu by just over 37,000 votes, said prefectural election board official Maiko Tashiro.
A close race had been expected between the two main candidates, who hold opposite views on Tokyo's plans to relocate a U.S. Marine Corps airstrip to another site on the island.
Itokazu, 59, a former lawmaker backed by opposition parties, opposes the relocation plan and wants the airstrip moved off the island.
"I am happy the candidate we supported won," Abe told reporters in Hanoi, where he was on a state visit after attending a Pacific Rim summit. "We want to continue to lend our ears to the voices of the people of Okinawa."
Wakayama Governor Kimura faces arrestI wonder if Kimura is not feeling at least a little spark of pride at being the first in something.
The Asahi Shimbun
11/16/2006--OSAKA--Prosecutors on Wednesday obtained an arrest warrant for Wakayama Governor Yoshiki Kimura, who faces the dubious distinction of becoming Japan's first incumbent governor arrested for suspected involvement in bid-rigging.
Kimura, 54, on Nov. 2 expressed his intention to resign to take responsibility for confusion in the Wakayama prefectural government related to the suspected collusion. He is expected to step down Dec. 2.
ＡＰＥＣで拉致も提起＝安倍首相 (no link)If and when Prime Minister Abe makes mention of the horrible injustice visited upon the citizens of his nation, I hope Hun Sen passes a note to Susilo Yudhoyono, "This guy is kidding, right?"
Jiji.com
安倍晋三首相は１５日、アジア太平洋経済協力会議（ＡＰＥＣ）参加国の報道各社のインタビューに応じ、「ＡＰＥＣの主なテーマは経済だが、地域の最大の不安定要素として北朝鮮の核、拉致の問題も提起したい」と述べ、北朝鮮による拉致問題も取り上げ、各国に協力を求める考えを示した。
「米向けミサイル迎撃も」・首相、集団的自衛権研究で
日経新聞
安倍晋三首相は14日、米紙ワシントン・ポストのインタビューで、憲法が禁じている集団的自衛権の行使に関連して「ミサイル防衛（ＭＤ）で米国に向かうかもしれないミサイルを撃ち落とすことが集団的自衛権に当たり、（迎撃が）できないのか研究しなければいけない」との認識を示した。
Japanese Premier Plans to Fortify U.S. Ties in Meeting With Bush
Washington Post
By Anthony Faiola -- TOKYO, Nov. 14 -- Prime Minister Shinzo Abe on Tuesday outlined a vision for a stronger Japan and vowed to fortify the U.S.-Japan security alliance during his first official meeting with President Bush in Hanoi this weekend.
In a wide-ranging interview with The Washington Post, Abe, who succeeded Junichiro Koizumi in September, also said he would push to redraft Japan's pacifist constitution.
In the current charter, which was drafted by the United States during its occupation of Japan following World War II, Tokyo effectively renounces the use of virtually any form of aggression. Abe, saying he hoped to foster a "new spirit" in Japan, said he would seek a new constitution within six years -- referring to the maximum time a prime minister can serve in office.
Few postwar Japanese leaders have secured such long terms. Given new threats facing Japan -- most notably a nuclear North Korea -- Abe suggested that his administration could take the interim step of reinterpreting the existing constitution to increase defensive capabilities.
Abe noted that it is unclear whether Tokyo is permitted under its own constitution to shoot down a ballistic missile flying over Japanese territory en route to the United States. Rules of engagement for Japanese troops on overseas peacekeeping missions are also severely limited by the constitution. Under current interpretations, for instance, Japanese troops are not permitted to defend themselves -- or U.S. or other allied troops -- unless directly fired upon.
But leading Japanese scholars have said policy changes to address such issues may not require the adoption of a new constitution, and could instead be made through official clarifications issued by the cabinet. While declining to provide a timetable for declaring new security protocols, Abe called for options to be analyzed on a case-by-case basis.
"We need to take up each individual example and study whether they . . . infringe upon the constitution," he said.
Japan says its constitution would allow nukes for defense
The Associated Press
TOKYO — Japan's new government said today the country's pacifist constitution allows it to own nuclear weapons for self-defense, a news report said...
Japan's Economy Expands at Twice Expected Annual Pace
Bloomberg
By Lily Nonomiya -- Nov. 14 -- Japan's economy grew twice as fast as expected in the third quarter, spurring gains in the yen on speculation the central bank will raise interest rates next month to cool surging corporate spending.
Gross domestic product in the three months ended Sept. 30 grew an annualized 2 percent, the Cabinet Office said in Tokyo today. Second-quarter growth was revised to 1.5 percent from 1 percent.
Bank of Japan Governor Toshihiko Fukui said last week the central bank needs to act ``in advance'' to prevent the lowest interest rates among major economies from triggering excessive capital investment. The Nikkei 225 Stock Average jumped today on expectations the longest expansion since World War II will increase profits.
``We're seeing an increasing possibility that the Bank of Japan will raise rates'' as soon as December, said Ryutaro Kono, chief economist at BNP Paribas in Tokyo. Confirmation a slump in consumer spending was temporary and a quarterly Tankan business confidence survey that improves would be among factor that may influence sway a decision, he said.
The yen rose to 117.68 per dollar at 10:59 a.m. in Tokyo from 118.04 before the report. The Nikkei 225 advanced 1.6 percent, the biggest gain in more than five weeks. The yield on five-year notes rose 6.5 basis points to 1.225 percent.
Growth May Slow
The median forecast of 33 economists surveyed by Bloomberg News was for the economy to expand at an annual rate of 1 percent. The economy expanded 0.5 percent from the previous quarter, above the 0.2 percent forecast.
Since the end of the quarter, some data have shown that the pace of Japan's growth may be cooling. Bank lending slowed for a third straight month in October, and machinery orders, an indicator of future capital spending plans, had their biggest drop on record in the third quarter.
Capital spending in the quarter surged 2.9 percent, more than three times the 0.9 percent gain expected. Mizuho Financial Group Inc., Japan's second-largest bank by market value, and Tokyo Electric Power Co., the nation's biggest power company, announced plans this month to invest as the economy grows.
The gain in business spending more than offset a 0.7 percent decline in outlays by consumers, twice as much as the 0.3 percent drop expected. Expenditure slid amid a spell of bad weather that kept shoppers at home and as wages growth stalled.
Is history repeating itself in Japan?The BOJ would have an easier time in conducting monetary policy if it knew which metric it should be following.
Despite the compelling case to be optimistic about Japan, there is also evidence to the contrary
The Financial Express
V Anantha Nageswaran - When Mr Abe took over as the Prime Minister of Japan, he had to contend with North Korean missiles. Now, he has to contend with Japanese machinery orders—an indication of industrial production. Orders dropped 7.4% year-on-year in September, though the consensus forecast called for a rise of 1.8%. Putting on a brave face, Mr Toshihiko Fukui, the governor of the Bank of Japan (BoJ), had said he expected interest rates to rise “soon.” The short-rate in Japan stands at a paltry 0.25%. Interest rate futures show that the market expects this rate to be around 0.75% by end-2007. That reflects expectations of modest growth and a very slow exit out of deflation in Japan. Mr Fukui obviously does not concur with the market’s assessment. He is concerned about the risks of keeping rates too low rather than the risk of raising them too prematurely. Is he right?
The question is whether the BoJ is about to repeat its policy errors of the past. The Lex column of The Financial Times last Thursday expressed scepticism on the Japanese recovery story, and for good reason. Mr Takenaka, the former financial services minister has questioned the actions of the BoJ in mopping up money supply and liquidity too quickly from the economy. He blames that action for the economic slowdown.
Our belief in the Japanese economic recovery this time is based on the following: (a) It is driven by the private sector; (b) It is coming on the back of a genuine cleanup in the banking sector; (c) It is based on a classical recovery pattern seen in the US in the ’90s with investment spending and corporate profits recovery; and (d) it is based on a firming of land and property prices.
Yet, recent data has created a noise of slowdown so loud it is hard to ignore. Bank lending growth has slowed for the second month in a row. The Economy Watchers’ Survey indicates a softening of the optimism on current conditions. The chart shows that the level of optimism has crested twice at 55 and has been unable to break above that level. It is just above break even now. The October survey is not available yet in English and the details would be as important, if not more, as the headline index reading.
Japan reports 30th mad cow case
Xinhua
A 5-year and 4-month-old female cow, which died last week in northern Japan, has tested positive for mad cow disease, the Agriculture, Forestry and Fisheries Ministry said Monday.
This is the 30th case of confirmed bovine spongiform encephalopathy (BSE) in Japan, according to a release of the ministry.
The cow was born on a farm in Chitose, Hokkaido in June 2001 before the implementation of a ban on meat-and-bone meal suspected of being a cause of the brain-wasting disease, the ministry said.
Comfort women bill likely to get another chance in Pelosi-led House
Yonhap
WASHINGTON, Nov. 12-- A U.S. congressional bill holding Japan accountable for sexual enslavement during World War II has a renewed chance of going to the House floor for a full vote next year if Rep. Nancy Pelosi is elected House speaker as expected, close sources said Sunday.
The U.S. House Committee on International Relations passed a resolution in September demanding Japan acknowledge and accept responsibility for enslaving young women, known as "comfort women." This is the first bill to be passed by a U.S. legislature on the issue but is not likely to reach the House in the current session.
"(If Pelosi becomes the House speaker,) she is more likely to bring it to the floor," a source close to Congress told Yonhap News Agency. Pelosi is characterized as a human rights advocate, and is especially outspoken on women's and China issues.
Hundreds of thousands of women, mostly Koreans, were coerced or lured to serve Japanese soldiers at frontline brothels during World War II when Korea was colonized by Japan. Tokyo has admitted to the existence of comfort women, but denies its imperial government was directly involved in operating the brothels.
Two previous House resolutions on comfort women, submitted in 2001 and last year, were shelved, due mainly to Japanese lobbying.
DPJ Gains Momentum With Victory In Fukushima Governors Race
Nikkei Net
(English behind the subscription wall, free 日本語 here)
TOKYO--The Democratic Party of Japan is expected to step up its confrontational stance toward the ruling parties during the remaining month of the Diet session, emboldened by the Nov. 12 victory of the Fukushima Prefecture gubernatorial election by a candidate it supported.
Pop culture key to foreign relations, new report saysOh, surely it is not worth the Yomiuri's while to mention somewhere in the article that our current Minister of Foreign Affairs--the Minister of Foreign Affairs--finds the time to sit down and read through 7-8 manga books every bloody week --for, as we know, the personal proclivities of ministers in the Abe Cabinet have nothing to do with the findings published by their advisory committees*.
The Yomiuri Shimbun
An advisory panel to Foreign Minister Taro Aso that was established to improve cooperation and understanding between Japan and other countries has drawn up a report proposing the use of Japanese pop culture, including comics and anime, as a diplomatic tool, sources said Saturday.
According to the report by the Council on the Movement of People Across Borders, Japanese pop culture has become enormously popular with young people overseas.
The report goes on to say that to help related industries expand their business opportunities abroad, it is important that cultural events in other countries are properly promoted, and that the government urge foreign leaders to take adequate measures against pirated products.
The council also proposed the establishment of a so-called ambassador of anime culture--a person who would introduce contemporary Japanese artwork to other countries--as well as a Japan comic award targeting overseas cartoonists. It also called for the creation of a pop culture study group consisting of ministries, agencies and industries related to the field.
"...the Cabinet of Prime Minister Shinzo Abe has put priority on resolving the abduction issue. "
However, the council also asked Suga to continue to take NHK's editorial freedom into consideration, even while working within the framework of the Broadcast Law.
"Since I also had concerns about editorial freedom, we asked the minister to take that into consideration," council chairman Mitsutoshi Hatori told reporters after the council's meeting.
"The abduction issue is one that is in progress. While it may be important to consider various opinions (through public hearings), we also felt it was important to reach a decision quickly."
Asahi Shimbun, November 9, 2006. "Council OKs plan to make NHK focus on abductions"
Haste makes waste, me hearties.
Seriously, does anyone doubt that establishing a precedent of telling NHK what it should report will not in time transmogrify into telling NHK what it should not report?
One hopes that the folks at NHK have the brains to point out if NHK can plausibly be criticized for being a platform for government propaganda (not that anyone would ever believe that anything as hamhanded and unconvincing as the present iteration of the 9 p.m. news is anything but government propaganda--and bad government propaganda at that*) it is possible that even more citizens might refuse to pay their yearly dues, further deepening NHK's budget woes.
One hopes...
Next, in the middle, the announcement that 11 of the postal rebels will be readmitted to the LDP by the end of the year.
Now all of the dirty 11 sucked it up, abandoned all principle and, spitting in the face of their supporters all the way, voted for the postal reform legislation after the election. They further demonstrated their abnegation and self-loathing by casting ballots for Abe Shinzo in the Diet prime ministerial election.
Still, readmitting them to the party seems a really, really bad idea.
Nakagawa Hidenao realizes how bad this idea is and has already once postponed the immaculate reaccession of the forces of resistance. Lest the readmission of the 11 paint the LDP as a tawdry party of numbers, not principles (Gosh, who could have imagine that?) he has pushed the readmission date into the blur that is late December.
Way, way past the Okinawa gubernatorial election.
I have to go over the numbers but I would venture that the number of rural prefuctural seats the 11 might conceivably help the LDP keep or gain are far fewer than the number of at-large seats, suburban seats or urban seats the party could lose through the inevitable tarnishing of its reformist image.
I do not often compliment Ozawa Ichirō for his smarts. Here, however, he played a cool hand.
He very openly sought the cooperation of the rebels throughout the summer, declaring he will work with anyone intent on toppling the LDP.
Should his efforts to seduce the rebels fail, he saddles the LDP with all their baggage, and revives the ancient, hated image of the LDP as the party of unscrupulous powermongering.
If, by contrast, the LDP stiffs the rebels--something Abe has to consider, now that Mori Yoshirō has once again demonstrated all those blows to the head he absorbed in his many years of rubgy playing were not in vain:
森氏、新人議員に「当選保証求めるな」造反組復党問題で
産経新聞
自民党の森喜朗元首相は８日夜、都内で開かれた同党衆院議員のパーティーあいさつで、郵政造反組の復党に反対する新人議員について「当選したら次の選挙も保証してくれなんて思っている政治家だったら、辞めた方がいい」と批判した。
Way to go, Scrumsfeld! Way really tick off duly elected members of the Diet and your party's projected future stars!
Anyway...where was I? Oh yes! Abe seriously has to think about calling the whole thing off in order to preserve the Koizumi shift. If Abe does stiff the postal rebels, then Ozawa wins the their cooperation in prefectures where the Democrats have traditionally been slaughtered ("Dreams of Gif--with you...")
Finally, on the left, in the biggest juiciest font of all, the ringer controversy involving the town hall meetings organized by the Ministry of Education, Culture, Sports, Science and Technology.
(Does anyone else share my conviction that The Mikado solution-- "And the Ministry of Everything Else"--applies here?)
It seems the Monkashō bureaucracy was disastisfied with the opinions that the people were expressing at town meetings it was organizing around the country. Now while these meetings were, for many, the one chance an individual might have to put a question directly to a minister, the Monkashō bureaucrats felt they needed to "improve the quality of the discussion". So they planting their own representatives in the audience in predetermined locations to ask the minister questions.
Questions exhibiting an oddly detailed knowledge and an unexpectedly positive view of the government's draft of the Basic Law on Education.
It turns out that the Monkashō has been salting the audiences with ringers-a lot of them--for a long time.
Now I must confess I know former Monkashō Minister Kosaka Kenji. I find it heartbreaking to think he might have been party to such dishonest stage managing.
Bizarrely, I find myself in complete agreement with an Asahi Shimbun editorial. It is outrageous--an outrageous abuse of the taxpayer.
Now the Mainichi Shimbun, not willing to let go of past gripes, screams, "Well, what did you expect? It wasn't called 'Koizumi Gekijō' for nothing."
Still, one would have thought that bureaucrats whose job it is to guard against cheating, against presenting another's work as your own, against plagiarism or falsification of records, that such individuals might get a bit queasy about having phoney citizens plying the panel with predetermined questions.
One would have thought...
It is a long time from now until July--but if Abe cannot get a grip on his party's image, on the perception that bureaucrats running amok and his ministers (to whom he owes big, big favors) are embarking on ideological crusades --the he is going to have a heck of problem convincing the people that reform is still alive...and worth voting LDP for.
-----------------------------------------------
* Seriously, who is the producer of NHK's 9 p.m. newscast? It is an insult to television's evolution--as if we were suddenly warped into an ugly alternate universe where Kume Hiroshi had never clipped on a microphone.
米中間選挙の開票進む 下院で民主党勝利
CNN
2006.11.08 - 米中間選挙は７日に投票が行われ、投票が先に締め切られた東部各州から開票が始まった。民主党が共和党の上下両院支配に終止符を打つかが焦点で、同党が上院で現在の議席数に６議席、下院で１５議席をそれぞれ上積みすれば過半数の議席を獲得するが、下院では１２年ぶりに民主党支配が確実となった。
Abductees' relatives 'satisfied' with U.N. visit
Kyodo
NEW YORK (Kyodo) Family members of Japanese abducted by North Korea wound up a weeklong stay in New York on Friday saying they were pleased with the outcome of their efforts to obtain cooperation from the U.N. on the rescue of abduction victims.
Shigeo Iizuka, 68, one of the group members, described the trip as "a satisfactory visit" during a news conference at the headquarters of Japan's U.N. mission.
The group met envoys and senior diplomats from 13 countries, including U.S. Ambassador to the U.N. John Bolton.
Besides Iizuka, the entourage included Teruaki Masumoto, 51, along with Tsutomu Nishioka and Yoichi Shimada, both deputy representatives of a group supporting people whose relatives have been kidnapped by North Korea.
Expressing satisfaction with the Japanese government for their U.S. trip, Nishioka told the news conference that Japan's position of never compromising over the abduction issue helps ensure the safety of abductees in North Korea.
After meeting with the family members on Tuesday, Bolton told reporters, "The abducting of innocent civilians by a regime like that tells you about the character of the regime and it's obviously both an act of terrorism and a gross abuse of human rights."
Squeeze on North Korea's money supply yields results
Cash crunch seems to have helped bring nation back to talks.
Los Angeles Times
By Josh Meyer, Times Staff Writer - November 2, 2006Washington — For three years, the Bush administration has waged a campaign to choke off North Korea's access to the world's financial system, where U.S. officials say the nation launders money from criminal enterprises to fuel its trade in missile technology and its efforts to build a nuclear arsenal.
That effort has started to pay off.
U.S. pressure forced Macao this year to freeze North Korean assets in one of its banks, then foiled North Korea's panicky attempts to find friendly bankers in Vietnam, Mongolia, Singapore and Europe. And after North Korea's Oct. 9 nuclear test, China ordered some of its major banks to cease financial transactions with the country.
The cash crunch appears to have played a key role in North Korea's decision Tuesday to return to six-nation talks over its nuclear ambitions. North Korean officials said that as part of the talks, they wanted to raise the issue of lifting financial sanctions.
"They're not coming back because they want to give up nuclear weapons," said David L. Asher, the U.S. State Department's point man on North Korea until last year. "They are feeling the financial pressure and the cutoff from the international financial system, so they are trying to make nice."
But the U.S. effort still faces two enormous obstacles: Russia and China.
North Korea continues to have access to banks in both countries, according to current and former U.S. officials who say that without those nations' cooperation, the U.S. effort will be largely ineffective.
Both major powers have historically been more concerned about protecting their strategic interests than in joining U.S. efforts to sanction their neighbor.
Stuart Levey, the U.S. Treasury undersecretary in charge of investigating terrorist financial webs, has traveled to Russia and China, including a trip to Moscow last week. Levey said he had "constructive discussions" with his Russian counterparts, but declined to say whether they would act. A Russian Foreign Ministry official said they had "agreed to further cooperation."
U.S. officials believe that both countries will continue to resist American appeals for a further crackdown in part because of their "historic ties to North Korea," said a senior counter-terrorism official, who spoke about the U.S. campaign on condition of anonymity.
Evidence gathered over the decades by Washington indicates that North Korea has become what some U.S. officials call a "Soprano state." The government in Pyongyang used its embassies to coordinate illegal activities, its ships to move heroin and other contraband, and its factories to make counterfeit $100 bills and bogus brand-name cigarettes, U.S. officials say.
Kim Jong Il, the North Korean leader, used the profits to fund his nuclear program, U.S. officials say, but also to import Mercedes-Benzes, pricey cognacs and other luxury items to buy loyalty.
Washington fears that North Korea could decide to use its well-worn trafficking networks to sell Iran or others the hardware or know-how to make weapons of mass destruction.
So administration officials decided in 2003 to attack by unconventional means. They created the Illicit Activities Initiative, a classified, multi-agency effort aimed at curbing North Korea's black-market networks.
A year ago, the United States moved on one of North Korea's bankers, officially designating the small Banco Delta Asia in Macao as a "primary money-laundering concern" under the Patriot Act.
Pyongyang, U.S. authorities found, banked much of its criminal proceeds in the former Portuguese colony, a freewheeling gambling haven, which became an autonomously governed Chinese territory in 1999.
"Banco Delta was just a thumbtack against their skin," said Asher, who headed the Illicit Activities Initiative. "We knew that behind the skin was a central artery. When we pricked it, blood was going to start coming out fast."
The Treasury action created a run on Banco Delta, which lost a third of its deposits in six days, and forced the government to seize control, sending an unmistakable message to bankers about the consequences of dealing with the North Koreans...
