N. Korea’s Nuclear Effort: Centrifuges Sought

By Bill Gertz
The Washington Times
June 12, 2007

North Korea purchased some two dozen centrifuges from the Pakistani nuclear supplier network headed by A.Q. Khan and must account for the equipment as part of the stalled nuclear agreement, said a senior Bush administration official.
    
The Feb. 13 nuclear accord reached by six nations in Beijing is being held up by $24 million in North Korean funds frozen in Macao’s Banco Delta Asia because of money-laundering concerns.
    
However, the senior official said the money is expected to be released soon and that the administration is set to promise not to prosecute the bank that agrees to handle the transfer, the senior official said.
    
“Any entity that is going to be moving that money is going to have to have some assurances because of the permanent 311 that’s been put on Banco Delta Asia,” said the senior official, who specializes in North Korean issues and who spoke to The Washington Times on the condition of anonymity.
    
The assurances are likely to be in the form of a Treasury Department “no action” letter that promises not to prosecute the bank under the USA Patriot Act money-laundering provision known as Section 311, which bars U.S. banks from conducting transactions with banks engaged in money laundering.
    
Treasury Department spokeswoman Mollie Millerwise declined to comment on the letter but said yesterday that the department is working with Russian authorities on the funds transfer from Macao.
    
The senior official said Washington fulfilled its part of the February agreement by not opposing the release of the funds, but Pyongyang “moved the goal posts” by demanding that the U.S. government facilitate the transfer.
    
“We’ve agreed not to interpose any objections to the release of that money, although some of that was obtained through illicit means,” the official said. “Now we’re going to look at how we can facilitate the transfer of that money.”
    
The funds could be shifted in the near future, the official said.
    
Of the centrifuges and uranium-enrichment goods that are the “central” issue of North Korean denuclearization, the senior official said, Pyongyang must account for the equipment.
    
“We know they acquired … close to two dozen centrifuges, P-1 and P-2 design, with P-2s being the most sophisticated,” the senior official said.
    
The P-1 and P-2 designs were sold by the Khan network to Libya, Iran and North Korea. Large numbers of the machines are needed to spin uranium hexafluoride gas to produce highly enriched uranium, the fuel for nuclear bombs.

Additionally, North Korean purchasing agents bought special aluminum tubing used for centrifuges and uranium enrichment.
    
“When you put all those pieces together, it spoke to a clear intent to have basically a production-scale capability to enrich uranium,” the official said.
    
Under the first phase of the February nuclear accord, North Korea must shut down its plutonium-fueled reactor and related facilities at Yongbyon and allow International Atomic Energy Agency inspectors back into the country to monitor the program. The second phase calls for dismantling all nuclear programs, including the uranium-enrichment facilities.
    
The senior official said U.S. intelligence agencies assess that the first phase of the accord can be completed and that “the North Koreans would abide by that commitment.”
    
However, U.S. intelligence assessments indicate problems in getting North Korea to abide by the second phase of the accord.
    
“When you talk about then looking at all nuclear programs, disabling and eventually dismantling all those nuclear programs in a verifiable comprehensive way, I think that’s where the assessment is less concrete,” the official said. “I think there are a number of people who say it’s going to be very heavy lifting and it will be somewhat arduous.”
    
The official sought to clarify public statements about U.S. intelligence agencies’ confidence in the North Korean uranium program. No change has been made in 2002 U.S. intelligence assessments about the existence of the equipment for the uranium-enrichment program, and Pyongyang had been “going full-speed ahead based on everything we were seeing,” the official said.
    
What changed was the intelligence community’s confidence level about the pace of the uranium program.
    
“At the end of 2006, because we were seeing less transactions, the confidence level went from high confidence to moderate confidence that the program to acquire a capability to enrich uranium was still in existence,” the official said. “But that is a central issue.”
    
Further complicating the matter, North Korea’s government admitted in October 2002 that it had the covert uranium-enrichment program but later denied having any such program, a position it holds today.
    
The senior official said the North Koreans have to resolve the issue whatever the case.
    
“We don’t know if they kept it in the box. The point is, there’s lack of clarity as to what they did with the significant amount of acquisition that spoke to a production-scale uranium-enrichment capability,” the official said.
    
North Korea tested cruise missiles during military exercises and undermined the nuclear talks by raising tensions in the region, the official said.
    
Christopher Hill, the assistant secretary of state for East Asia, said in a C-SPAN interview Wednesday that the North Koreans may have reverse-engineered 12 to 20 centrifuges in setting up a series of a few hundred to a few thousand machines.
    
“And they’ve got to stop it,” Mr. Hill said. “And they’ve got to abandon the program. And get rid of all the equipment. And we’ll work with them on that.” 
    

A $1.5 trillion mistake: Pakistan, North Korea, Iran and the Nuclear Nexus

By Arnaud de Borchgrave
May 6, 2007

On Oct. 4, 2003, a German cargo ship, the BBC China, was inspected in the southern Italian port of Taranto as part of an ongoing program to check on ships that might be transporting equipment to assist nuclear proliferation.
    
The inspection disclosed sophisticated components designed to facilitate erection of centrifuges indispensable for enrichment of weapons-grade uranium. The BBC China had taken on its secret cargo in Dubai and was on its way to Libya.
    
Instead of denouncing yet another imperialist plot, Libyan authorities startled Western intelligence agencies by admitting they did indeed have a clandestine nuclear weapons program under way. Col. Moammar Gadhafi immediately capitulated and agreed to cooperate. The U.S. had just overthrown Saddam Hussein and the insurgency was in its infancy.
Col. Gadhafi thought Libya, as a secret nuclear proliferator, might be next on the Bush Doctrine’s hit parade.
    
Since seizing power in 1969 at age 27, Col. Gadhafi had interfered in 42 countries with a mix of lavishly funded terrorism (including the downing of Pan Am 103), subversion and outright military aggression.

Now, he correctly calculated that by coming clean he would also ensure his survival.
    
Col. Gadhafi’s abject surrender included turning over to the International Atomic Energy Agency and the U.S. and U.K. all nuclear equipment already purchased on the international black market, as well as the details of how, where and what and with whom the secret deal was made.
    
Col. Gadhafi’s confession staggered the CIA, MI6 and other leading Western intelligence agencies. Libya’s secret nuclear purchase included the entire kit and kabootle for a nuclear enrichment plant and detailed how-to plans for assembling a nuclear weapon. The supplier was not a nuclear proliferating state, but a company based in Dubai, run by the infamous Dr. A.Q. Khan, father of Pakistan’s nuclear arsenal, and the second most popular man in his country after the founder of the state, Ali Jinna.
    
“Dr. Strangelove — or How I Learned to Stop Worrying and Love the Bomb” (1964) cast Peter Sellers as an eccentric, wheelchair-bound German scientist whose mechanical hand involuntarily jerked straight out in a Nazi salute. Pakistan’s Dr. Strangelove kept soliciting America’s self-avowed enemies — North Korea, Iran and Libya — with nuclear goodies designed “to deter an attack by our common enemy,” i.e., the United States. 
    
Dr. A.Q. Khan’s Dubai-based holding company controlled a nuclear centrifuge plant in Malaysia, as well as a network of 75 suppliers throughout the world, ranging from Germany and Switzerland to Singapore, Japan and South Korea. Khan’s clandestine nuclear empire was heavily compartmentalized. None had the overall picture of what he was up to. Three or four major production points had to know about the recipients unless A.Q. had ordered his managers to undergo frontal lobotomies.
    
The Malaysian operation, SCOPE, clearly was protected at the highest level. A.Q. Khan’s partner was none other than the prime minister’s son. A Swiss family engineering group, TINNER, assembled the nuclear centrifuge kits and a group in South Africa — the only country to have unilaterally abandoned its secret nuclear weapons program — supplied pumps designed to be coupled to centrifuges. 
    
In his new book “Rapacites (Greed),” Jean-Louis Gergorin, a prominent French strategic thinker, pulled a variety of financial strands together as he investigated Clearstream Banking, a financial clearing institution based in Luxembourg.
    
Clearstream had been in the news since 2001 as a facility for kickbacks to secret accounts held by several French political figures, industrial leaders, and intelligence operatives, all involved in a controversial sale of six French frigates to Taiwan. The deal generated 5 billion French francs (before the euro) in kickbacks. Eight deaths have been linked to the scandal. In Taiwan, 13 military officers and 15 arms dealers were sentenced to between 8 months and life for bribery and leaking military secrets. Mr. Gergorin was accused of circulating a list that included the names of several prominent French politicians.
    
An investigation by the Luxembourg government led to the resignation of Clearstream’s CEO. There was a little math error. The clearinghouse at one point handled back-office paperwork for some 40 percent of European stock and bond trades and had, said BusinessWeek, overstated its assets in custody by $1.5 trillion — not billion. At one stage, Clearstream carried 33,000 secret, nameless numbered accounts.

From Russia’s new robber oligarchs to Colombian drug dealers to Mafiosi networks to Col. Gadhafi’s secret payments to Dr. A.Q. Khan for the do-it-yourself nuclear weapons kit, the chicanery Laundromat worked squeaky-clean wonders. 
    
A.Q. Khan was president and CEO of a multinational holding company. His chief of staff was Abu Tahir, a Sri Lankan. His principal executives were Swiss, German and South African. Peter Griffin and his son Paul, both of them Brits, headed the commercial sales side. Gerhard Wiesser, a German nuclear engineer, had worked on South Africa’s nuclear weapons program that was later scrapped. He said he worked with Pakistan’s nuclear black marketeer because he had a costly divorce pending. Most were based in Dubai, the new Hong Kong on the Gulf, one of the United Arab Emirates. where anything goes (including $20,000-a-night hotel suites).
    
Gotthard Lerch, a Swiss-domiciled German engineer, was the technical brain behind the Libyan project. He had done business with Khan as he assisted in Pakistan’s secret nuclear program in the 1980s. For Libya, Khan signed a contract that gave Mr. Lerch 27 million euros. He was eventually extradited to Germany where a judge decreed a mistrial as the prosecution said it couldn’t share classified documents. 
    
For most of Khan’s minions, proliferation was rewarding — and unpunished. Mr. Griffin cooperated with British and U.S. intelligence, which nailed Col. Gadhafi and led him to turn over the unpacked kit boxes to the Brits and the U.S.
    
A.Q. Khan made $100 million on the aborted deal.

When Pakistani President Pervez Musharraf was confronted with the evidence, he persuaded Khan to confess and repent in return for amnesty, but he was allowed to keep his ill-gotten gains. He made 13 trips to North Korea through 2004 where he traded Pak nuke know-how for Korean missiles. And his cash-and-carry nuclear centrifuge deal with Iran’s mullahs is now two decades old. Unlike Libya and North Korea, Iran has thousands of scientists and engineers.
    
North Korea now has a rudimentary nuclear capability. Iran can’t be far off.
    
    Arnaud de Borchgrave is editor at large of The Washington Times and of United Press International.