North Korea has restored a special department in the Workers Party codenamed Room 38 that manages leader Kim Jong-il's private coffers, the Unification Ministry said Monday in a report on the organizational chart of the North Korean power structure for 2011.
"It seems the North in 2009 merged Room 38 with Room 39, another special department that handles a network of business operations, but separated them again in mid-2010," a ministry official said.
According to a North Korean source, Room 38 handles the private slush funds needed to buy luxury goods for Kim Jong-il and his family as well as gifts for officials, while Room 39 deals with executive funds to pay expenses for party events.
A source in the North said the regime merged Room 38 with Room 39 in March 2009 to simplify management of Kim Jong-il funds but apparently restored Room 38 in September last year, since it had become difficult for Room 39 alone to earn enough hard currency due to tightened international sanctions against the regime.
Room 39 supervises Taesong Bank, which took remittances from the operator of the lucrative Mt. Kumgang package tours, and a trading company that sold US$200 million worth of agricultural and fishery products to South Korea per year. But those stopped in the wake of the North's second nuclear test in May 2009 and its attack on the South Korean Navy corvette Cheonan in 2010.
Room 39 is managed by Jon Il-chun, a high school classmate of Kim Jong-il's. Who runs Room 38 is not known.
Meanwhile, the regime has established a new ministry of national resources development to earn hard currency.