The tiny, troubled Pacific island nation of Nauru was recruited last year in a secretive, madcap scheme to spirit North Korean defectors out of China, according to documents and people involved.
The idea was pitched by a group of political activists, some of them American, who were staunchly opposed to North Korean leader Kim Jong Il. Nauru officials said they were led to believe their nearly bankrupt nation would be rewarded with U.S. financial aid and with help to reform a corrupt offshore banking and passport-selling operation.
The plan called for Nauru -- eight square miles of guano and rock located halfway between Hawaii and Australia -- to open an embassy in Beijing and a consulate in Washington, using its diplomatic cover to help senior North Koreans defect to the United States.
Kinza Clodumar, a former Nauruan president and finance minister who made two trips to Washington in the last six months, says that the country was offered $1 million as well as free staff and office space for their diplomatic missions.
" 'You help us with the North Korean scientist, you are good boys and we will look at what U.S. aid can assist you,' " Clodumar said they were told. " 'What we need is for you to set up an office in Beijing. We give you the staff. You don't pay for a thing.'
"In our view, it seemed reasonable. We were told it would help to stabilize the Pacific region. We wanted to help the Americans," Clodumar said in a telephone interview from his office in Melbourne, Australia.
The timing coincides with sharply rising tensions between the Bush administration and North Korea, a last bastion of communism and a country seemingly intent on developing nuclear weapons.
The operation ultimately did not succeed, in part because of political turmoil in Nauru that delayed opening the Beijing embassy. But it is believed that the group of activists nevertheless helped some prominent North Koreans escape to the United States. Among those who reportedly escaped is a 75-year-old nuclear scientist, Kyong Won Ha.
The operation was first reported last weekend by a Sydney-based newspaper, the Australian. State Department spokesman Richard A. Boucher denied the report.
"We did not pay for the establishment of any Nauru diplomatic missions, we never promised to provide financial assistance to Nauru or requested their cooperation in any other sphere," Boucher said in response to questions about the story.
A well-respected human-rights activist who works with North Korean refugees in China said that he and a handful of others were aware of the Nauruan plan and thought it was being orchestrated by government operatives from the United States, Canada and New Zealand.
"These people seemed to be working for their respective governments, but they were operating at arm's length so they would have deniability," said the activist, who spoke on the condition of anonymity. "This was not the first time they were trying to get high-level military assets to defect to the United States."
The Nauruans say they were not approached directly by any U.S. government official, but instead received a vaguely worded invitation that was sent through a Washington lawyer, Philip A. Gagner, who had represented the country for several years.
In a letter dated Oct. 12, which was obtained by the Australian newspaper and seen by the Los Angeles Times, Gagner wrote to Nauru that several governments, "including governments in the Pacific and the United States government, would like to have the assistance of the Nauru government in a diplomatic matter of great sensitivity, which also involves a country [not Iraq] which may have acquired weapons of primary concern to other governments in the region and the world." The letter did not mention North Korea by name.
Intrigued by the letter, a delegation of Nauruan officials flew to Washington a week later. There they held several meetings concerning reforms demanded in their banking system by the United States, which believed that Nauru's offshore banks and passport-selling schemes were being used by terrorists. They also were told more in detail about the North Korean operation, according to a memo about the meetings that was written by Gagner.
"This project, when finished, is likely to bring Nauru very high prestige and the gratitude of both the United States and China governments," the memo stated.
Reached by telephone at his Washington office, Gagner said he could neither confirm nor deny the authenticity of the documents because of rules concerning client confidentiality. Clodumar said, however, that the documents were genuine.
Clodumar said that the Nauruan delegation never spoke directly to U.S. government officials about the North Korea operation but to people he believed were acting as intermediaries.
One of them was Michael Horowitz, a former Reagan administration official who has written and spoken frequently about human rights in North Korea.
Horowitz, a fellow at the Hudson Institute, a Washington think tank, confirmed that he spoke with a Nauruan delegation about North Korea. But he says he was not personally directing any operation to bring out refugees through Nauruan diplomatic offices.
"The Nauruans came to call on me like many people who were interested in human rights in North Korea," said Horowitz. He said he did not find it peculiar that a country as small and troubled as Nauru would take on such a cause. "There were some people advising the [Nauruan] government who were genuinely concerned about North Korea."
Nauru is possibly one of the most troubled countries in the world. Its meager land mass, composed largely of guano, an organic material made of bird droppings, is sinking into the Pacific Ocean as a result of global warming and excessive phosphate mining. Nearly half of the population of 11,000 suffers from diabetes. The country has had three presidents in the last six months.
In October, Nauru was also up to its neck in legal trouble as a result of a bucket-shop operation to sell Nauruan passports for $30,000 each. A number of criminals and terrorists, including suspected Al Qaeda operatives, had been caught with Nauruan passports in hand. Terrorists and crime syndicates were also laundering money through Nauru's post office-box banks.
The United States was threatening to invoke crippling economic sanctions against the republic under the 2001 Patriot Act if it did not change its banking and passport systems -- which were also a major revenue source.
In effect, the deal allegedly struck by the Nauruans involved far more than selling passports; they were selling their entire diplomatic status. According to the documents, the Nauruan government was to get a list of staff that it would name to its consulate in Washington and to its Beijing embassy, with little choice in the appointments.
The operation was, according to the documents, supposed to be directed by Steven M. Ray, an American who would be temporarily named consul general in Washington "for the particular purpose of this project."
According to Nauru's official Web site, Ray is the consul general designate in Washington, awaiting approval by the State Department. Ray, a former journalist who works with a conservative talk show, said through a lawyer that he was not involved with North Korean defectors. Staff at the embassy in Beijing similarly denied involvement.
From the perspective of refugee advocates, an embassy in Beijing would be enormously useful. More than 100,000 North Koreans are believed to have fled across the border into China. But they are denied refugee status by the Chinese government and routinely repatriated to North Korea. Many seek diplomatic asylum at embassies in Beijing, but foreign governments are fearful of straining their relations with China by giving overt aid to North Korean defectors.
The scientist, Kyong Won Ha, who reportedly escaped, is a mathematician by training whose expertise in the field of spherical detonation is crucial to the building of a nuclear bomb. His background is unusual; he grew up in North Korea, escaped to South Korea after the Korean War, then moved to the United States and Canada before defecting back to North Korea in 1974. According to some accounts, Kyong worked briefly at Los Alamos in the early 1970s.
"One of the key scientists and engineers behind the 30-50mw reactor in Yongbyon [the North Korean nuclear complex] and its configuration into a source of plutonium," is how one science journal referred to him.
The South Korean newspaper JoongAng Ilbo last week quoted a North Korean official confirming that Kyong had defected recently. A refugee activist said he believed that Kyong is living either in the United States or Canada.
It would not be the first time a North Korean scientist has defected to the United States. In January 2002, Lim Ki Sung, a missile expert, is believed to have escaped with his son and a nephew into China, where U.S. officials ultimately helped them get new passports and visas. Lim has reportedly supplied key U.S. intelligence about North Korea's efforts to develop a multistage intercontinental ballistic missile that could reach the United States.
Clodumar, the former Nauruan president, acknowledges that Nauru was never able to help with the North Korean defectors. But it says it followed all the instructions it was given: setting up the diplomatic offices and tightening its passport and banking laws. He says that Nauru also turned over previously confidential banking records of Nauruan-registered corporations to assist in the war against terrorism.
"We did everything they told us to do," said Clodumar. "If the United States denies it, what can we do? We're a little country."
Special correspondent Anthony Kuhn in Beijing contributed to this report.