38 North to continue despite closure of parent institution

By Yeo Jun-suk

S. Korea official says “different interpretation” in government funds leads to the decision to defund USKI

  • Published : Apr 11, 2018 - 16:43
  • Updated : Apr 11, 2018 - 17:58

 Research institute 38 North announced that it would continue delivering analysis on North Korea despite the imminent closure of its parent institution following the South Korean government’s decision to terminate its funding.

In a statement posted Wednesday on its website, 38 North founder Joel Wit said the research institute would continue its operations even after the planned closure of the US-Korea Institute at Johns Hopkins School of Advanced International Studies. 

“Without commenting on the current controversy, I would like to assure our readers that 38 North will continue its operations despite the demise of USKI. More news on that front will be coming soon,” Wit said in a statement.

USKI is reportedly planning to close its doors on May 11 and delivered the news to its staff. The announcement followed the South Korean government-funded Korea Institute for International Economic Policy’s decision to cut off $1.8 million of annual funding. 

Joel S. Wit, a Senior Fellow at US-Korea Institute at Johns Hopkins SAIS. USKI

KIEP’s parent institute, National Research Council for Economics, Humanities and Social Sciences, said Wednesday it decided to defund the USKI as the institute failed to provide a proper financial report, considering the fund to be a donation free from obligations to auditing.

The money was in fact a part of a government subsidy subject to the auditing process and such differences in understandings between the two cultures led to the government’s decision to end annual funding, said NRC Chairman Seong Kyoung-ryung,

“A subsidy project is required to make detailed financial reporting. It can‘t be done on a piece of paper,” Seong told reporters. “But when we look at US reports, it appears they consider (the money) a donation. In English, there’s a difference between a subsidy and a donation.”

The chairman, however, reiterated that the South Korean government will maintain a “cooperative relationship” with 38 North, describing it as a “crucial security asset.” 38 North often uses commercial satellite imagery to shed light on North Korea’s nuclear and ballistic missiles.

While the 38 North founder Wit did not specify how the institute would be managed, sources speculate that 38 North will be run as an independent entity funded by various foundations in the US.

Wit, a former US diplomat who has participated in “Track 2” dialogues with North Korean officials attending international meetings, expressed regret over the South Korean government’s decision to stop funding the USKI. 

“This is a very unfortunate development given the institute’s history,” Wit said. The USKI has been managed by former US government officials who exercise significant influence in the shaping of US policy toward North Korea,

The institute was founded in 2006 by Don Oberdorfer, a well-known Washington Post correspondent and longtime Korea watcher, and its chairmen have included Ambassadors Stephen Bosworth and Robert L. Gallucci.

The USKI controversy has roiled South Korea and Washington-based think tanks at a time when the liberal Moon Jae-in administration is pursuing a diplomatic breakthrough with North Korea through an inter-Korean summit and a US-North Korea summit.

USKI Chairman Gallucci, who served as a chief US negotiator during the North Korean nuclear crisis of 1994, told the Associated Press that it was a setback for research on North Korea and that the Moon administration has exerted “utterly inappropriate meddling” over academic affairs.

South Korea’s opposition parties criticized the Moon administration for trying to censor the North Korean policy debate in the US. This was reflected in attempts to replace USKI Director Ku, who has advocated a hard-line policy against North Korea during previous conservative administration, they said.

In a press release announcing the funding cut, KIEP said the decision was agreed upon by lawmakers across the aisle, who had echoed criticisms about the institute’s poor audit reports, lack of transparency in selecting visiting scholars and the “excessively long” tenure of Ku.

Galluci rejected those allegations. During the interview with AP, he said the institute‘s financial reporting was very thorough and there was no mismanagement of funds. He said he had asked the South Korean government for evidence and had “gotten zero.”