U.S. targets North Korean hackers, money sources as talks sputter

U.S. officials are engaged in an intense behind-the-scenes campaign with foreign allies to cripple North Korea’s cyber-hacking and fundraising capabilities, as consensus grows in the Trump administration that nuclear talks with Pyongyang will remain stalled for the coming year.

While recent high-level personnel shifts on the administration’s North Korea policy team suggest President Trump is moving the North Korean crisis to the back burner, sources familiar with the backroom diplomacy say it remains active and as focused as ever on undercutting the financial lifelines for the regime of North Korean leader Kim Jong Un.

In addition to expanding intelligence sharing and countermeasures with allies against North Korean hackers, the campaign aims to widen interagency efforts to identify what U.S. officials say are Chinese and Russian violations of U.N. sanctions on North Korea.

At the same time, U.S. officials are preparing a “name-and-shame” list of countries — with China and Russia at the top — that employ North Korean workers who provide crucial hard currency for Pyongyang. U.S. officials estimate that North Korea makes more than $500 million a year from approximately 100,000 workers it sends overseas, with 80% of those workers in China or Russia, the Voice of America reported recently.

Both Moscow and Beijing have been openly lobbying for an easing of President Trump’s “maximum pressure” campaign on North Korea, with Russia’s UN Ambassador Vassily Nebenzia describing an easing of UN sanctions as a “humanitarian issue” not directly related to the nuclear issue.

Some analysts say covert U.S. operations against North Korea should be even more robust and focused directly on disrupting Mr. Kim’s push for new nuclear and ballistic missile capabilities amid the current stall in diplomacy.

The Trump administration, which has declined to comment on its behind-the-scenes campaign, has been cautious in its statements on North Korea during the year since the February 2019 Hanoi summit between Mr. Trump and Mr. Kim broke down with no denuclearization agreement.

Mr. Trump made no mention of North Korea in his State of the Union address in early February, and a series of recent changes to his policy team have prompted speculation the president has made the pursuit of a deal a much lower priority.

The ouster of hawkish National Security Adviser John Bolton in September removed a leading skeptic of the North Korean diplomacy, but then Stephen Biegun, Mr. Trump’s special envoy for North Korea, was elevated to deputy secretary of state, meaning his duties now include matters ranging far beyond the pursuit of talks with Pyongyang.

While Mr. Biegun continues to hold the dual title of special envoy, administration insiders say that his deputy, Alex Wong, would take over day-to-day operations on North Korea. That was until two weeks ago, when the White House nominated Mr. Wong to be a political affairs ambassador at the UN in New York.

Former U.S. Ambassador to South Korea Mark Lambert was also recently moved from his post as State Department Korea Desk director to New York, where he’s now focused on countering Chinese influence at the United Nations.

Policy shift?

Some say the personnel moves signal a clear policy shift.

“The reassignments of officials who have worked on North Korea, combined with Trump’s silence on the subject during his State of the Union address, suggest that no further engagement with Pyongyang is planned for the rest of this presidential term,” Joshua Pollack, a North Korean expert at the Middlebury Institute of International Studies in California, told Voice of America.

But others argue the personnel shifts shouldn’t be read sign of disarray. The moves, they say, came only after North Korea had refused repeated invitations to engage in working level-talks in the months following the breakdown in Hanoi.

“Yes, the North Korea policy has been put on the back burner, but that’s because the North Koreans won’t put it on the front burner, not because the U.S. and South Korea aren’t interested in pushing the ball forward,” said Patrick Cronin, the Asia-Pacific security chair at the Hudson Institute.

Mr. Cronin said in an interview that the decision to shift Mr. Wong to New York — a move that could still take months for the Senate to confirm — may actually benefit North Korean diplomacy by reviving the currently idle “New York back channel” with the Kim regime’s envoy to the United Nations.

“Alex will provide some substance up in New York, where we need some substance,” Mr. Cronin said, adding that Mr. Wong’s role at the United Nations will presumably “overlap with the North Korea back-channel there should that ever become useful again.”

David Maxwell, a North Korea expert with the Foundation for Defense of Democracies, also pushed back against the notion that the policy team is in disarray.

“If anything, the move of Steve Biegun to deputy secretary of state means he’s now in a position to more strongly influence North Korea policy from that higher perch,” Mr. Maxwell said, adding that there remains a deep bench of career officials working on the policy, not only at the State Department but across several other agencies.

“Furthermore, should North Korea suddenly be willing to negotiate, our best people from State will be ready to engage and that means Biegun, Wong, Lambert and others, even though they have other roles right now that they’ve gone into because North Korea is not engaging,” he said.

The covert targeting of North Korea’s cyber and fund-raising operations continues apace amid the uncertainty over personnel, including an effort to boost the ability of U.S. allies to counter Pyongyang in cyberspace.

U.S. officials “are taking cyber intelligence that we have and sharing it with countries around the world to help them defend themselves against what the North Koreans are doing and also prepare them to take action against it, basically to undermine North Korea’s capability to carry out malign cyber activities,” one administration source said, speaking on condition of anonymity because they were not authorized to discuss the effort.

However, a February report published by the private intelligence analysis firm Record Future said North Korea has developed a wide-reaching clandestine cyber operation to circumvent international sanctions and earn hard currency.

“This includes not only using the internet as a mechanism for revenue generation, but as an instrument for acquiring prohibited knowledge and skills, such as those enabling the development of North Korea’s nuclear and ballistic missile programs and cyber operations,” the report said. “This model uses three primary tactics for generating revenue — internet-enabled bank theft; use and exploitation of cryptocurrencies and blockchain technology; and low-level information technology work and financial crime.”

Delicate posturing

Some analysts say the writing is on the wall that North Korea’s current leader is no more willing to denuclearize than were his father and grandfather — and that the Trump administration should actually be doing far more to overtly confront Pyongyang.

“North Korea continues to nuclearize. Their nuclear missile programs continue unabated,” according to Bruce Klingner, a former high-level CIA officer in Korea now with the Heritage Foundation. Pyongyang has produced enough fissile material “perhaps for six to eight or more nuclear weapons” since Mr. Trump and Mr. Kim held their first summit in Singapore in 2018, he estimated.

“They’ve [also] continued to expand and refine the production facilities for missiles, mobile missile launchers, warheads and re-entry vehicles, and in 2019, they launched 26 missiles. That’s the highest number of UN violations in a single year by the regime ever,” Mr. Klingner said last week at an event hosted by the Hudson Institute.

“There is a lot of sub-rosa sanctions enforcement going on with U.S. officials at State and Treasury and others,” Mr. Klingner said. “But…the Trump administration, for all its declarations of maximum pressure, has only anemically enforced sanctions since the Singapore summit, and maximum pressure has never been ’maximum.’”

Administration officials remain cautious in what they’re willing say publicly about the future of their North Korea policy.

Mr. Wong, who also spoke at the Hudson Institute event last week, said only that U.S. officials continue to seek talks with Pyongyang, but are “clear-eyed about North Korea’s ongoing development of weapons of mass destruction” and “the means to deliver that destruction around the world.”

U.S. officials continue to “work with our partners to maintain fidelity” of sanctions on North Korea, he said, insisting that there remain “immense opportunities” for peace on the Korean peninsula.

“A denuclearized and peaceful peninsula will foster new cooperation along economic, security and political lines. It could mean the opportunity to enhance connectivity throughout the Korean peninsula, more open sea lines, more overflights, high-quality infrastructure investment,” he said. “It could mean new energy routes, diversified trading relationships and rising living standards. It could mean that our military forces will no longer need to posture themselves perpetually to fight a war and could instead serve to cooperate and build the institutions to support a lasting peace.”

“But to seize these opportunities,” said Mr. Wong, “our negotiation teams have to meet. … We have to engage intensively, close off the space for miscommunication suspicion, and drum up a rhythm of talks that will give momentum to the diplomacy begun by President Trump and Chairman Kim.”

“When [the North Koreans] are ready to set in motion the necessary talks,” he added, “our team will be ready as well.”