Joshua PollackBerlin Games: A Tale of Hughes Helicopters, Diplomats, and North Korea’s Arms-trading Networks

Hughes OH-6A Cayuse US Army helicopter

The following is a guest post by Friend of Blog Daniel Salisbury.

Last month, I published an article in Intelligence and National Security exploring the role of intelligence operatives in perpetrating arms trafficking and that of intelligence agencies in countering it. The piece provided a case study of an audacious 1980s arms deal where DPRK operatives based in Berlin procured a large number of US-manufactured helicopters for use by the North Korean military.  

The global nature of North Korea’s networks mean that source material can be found in unlikely places. Some discoveries in the British archives – largely a result of Britain’s role as one of the occupying powers in Cold War West Germany and West Berlin –  provide some new details surrounding this old arms trading story.

This tale takes us from southern California to the Korean Demilitarized Zone (DMZ) to Berlin in the Cold War’s twilight years, and finally to present-day New York City. We begin our story in Los Angeles in the early 1980s, with what US officials described as the “largest illegal diversion of US aircraft ever.”

Los Angeles, 1981.

A story seldom-told concerns how North Korea managed to illicitly procure 86 Hughes MD500 helicopters in the mid-1980s.

Two California-based brothers – the Semlers – were indicted on 27 charges for export violations, conspiracy, false statements and tax violations after transferring the aircraft from their North Hollywood company to North Korea through a West German company. They plead guilty in 1988 to reduced charges and received 3 and 1 years in prison respectively. Since the helicopters were civilian, the West German company – Delta-Avia – broke no German law, but it was blacklisted by US authorities.

The Hughes MD500 was the civilian version of the Hughes OH-6 Cayuse military light utility helicopter. Since the late 1960s, almost 5,000 OH-6s have been operated by a variety of air forces, police departments, and private individuals around the world. As a communist country, North Korea was subject to the US-led COCOM export control restrictions on the transfer of technologies, and as a result, was barred from openly procuring many military technologies from the West.

In 1985, according to British archival documents, US Deputy Assistant Secretary of Commerce for Export Enforcement Ted Wu told a British official in Washington that the Semlers had put the deal together in 1981-1982, with the first shipments taking place in 1983. The aircraft, supposedly headed for Berlin, were diverted en route, trucked from Antwerp to Rotterdam, and then shipped to North Korea on a Soviet cargo ship. Further shipments were made in 1984.

Several years later, the CIA noted the Hughes purchase to be “a spectacular, but rare, achievement” on the North Koreans’ part. It was one of the largest single illicit transfers of the Cold War.

The Korean Demilitarized Zone, 1985.

The transfer of these helicopters – civilian models that North Korea would adapt for military purposes – presented strategic implications far outweighing the benign nature of the choppers themselves.

The greatest problem stemmed from the use of very similar models by the South Korean and US militaries around the DMZ. SIPRI notes that South Korea had procured 34 helicopters of this type from the US in the late 1970s, and a further 175 had been produced under license in the country between 1977 and 1985. The similarity provided North Korea with a great opportunity to infiltrate the South. Indeed, in April 1985 the Washington Post carried an article which suggested that the illicitly transferred helicopters had already been encroaching on South Korean airspace.

A visit to Washington around this time by South Korean President Chun Doo-hwan was “dominated” by concern over the helicopters. As a British telegram notes, the US Commerce Secretary allegedly told his British counterpart:

During that visit more than half of all the discussion (including with the president) had revolved around this issue. The South Koreans had asserted very strongly that the illegal diversion of the Hughes helicopters to North Korea had significantly changed the strategic relationship between North and South.

Indeed, this concern was shared in Washington, not least of all because US forces also flew similar helicopters around the DMZ. A 1985 CIA Research Report notes:

…the Hughes 500 is especially well suited for use in insertion/infiltration. Because they are visually indistinguishable from South Korea’s own 195 Hughes 500s, they are ideal for inserting teams of agents and terrorists into the South.

In a May 1985 meeting with a British counterpart, Assistant Secretary of Defense Richard Perle noted that the US DOD had even launched a study of risks surrounding “look alikes.”

After the revelation of the huge Hughes transfer, steps were taken to prevent North Korea from procuring spare parts for the choppers from civilian industry. The 1985 CIA Report notes that North Korea was already receiving spares for its MD500s from unspecified sources.

West Berlin, 1986.

North Korea long had strong relations with the Deutsche Demokratische Republik (DDR – or East Germany) – and therefore had a particularly large embassy in East Berlin during the Cold War. In the early 1980s, the mission included 45 diplomats and administrative staff and 90 dependents. It was a focal point for procurement from Europe.

In January 1986, the US sought British support for the expulsion of four diplomats from the North Korean Embassy in East Berlin on grounds of their procurement of Western technology through Berlin. The previous autumn, according to UK records, the Americans had received “firm indications” that $500,000 of helicopter spare parts would be transferred from Delta-Avia to a company based in West Berlin called “Killewald Expotrans GmbH” and then shipped from Schonefeld airport to North Korea. The Embassy had also allegedly been involved in facilitating the initial helicopter deal.

Killewald Expotrans appears to have been used by North Korean diplomats as a front company. Its location in West Berlin allowed it to operate as a benign-seeming intermediary in a “third country” hub. Despite restrictions on the movement of military goods through the city, West Berlin would have looked far less concerning to exporters than East Berlin or North Korea itself.

Responding to the North Korean diplomatic arms trafficking network was not easy. In this case, it was complicated by the politics of the allied jurisdiction over the divided city of Berlin. The governance of the city had been overseen by the Allied Kommandatura (AK) since the end of the Second World War, which after the Soviet walk-out in 1948 was composed of the US, the UK, and France.

The US argued in January 1986 that the North Koreans had breached not only COCOM controls but also AK Law 43, which forbade the manufacture, export, or import of war materials from Berlin. They argued AK Law 8 would allow the rarely convened Expulsion Board to expel the North Koreans from “Greater Berlin” as non-Germans whose presence was “liable to endanger the maintenance of public order or the prestige of security of the allied forces.”

“Greater Berlin” was de facto West Berlin, given the nearly 40-year absence of the Soviets from the AK, and the slim chance that either the Soviets or the DDR would expel diplomats at the request of the Western powers.

What would such an expulsion mean in practice? The North Korean diplomats – resident and working in East Berlin – would be expelled from West Berlin into the DDR or denied entry into the West at the crossing points. They would be able to enter East Berlin again from the DDR after expulsion. Diplomats expelled from the Western sectors of Berlin were often ejected from the most westerly checkpoint, with their colleagues facing a humiliating drive of several hours through the city’s outskirts in the DDR to pick them up.  

By February 1986, despite British skepticism, the Americans were still pushing for expulsion. The French were happy to go along, and the Brits noted they would acquiesce despite their doubts about the legal basis and an unenforceable expulsion. They suggested that there was no obvious threat to security of allied forces, and the threat to prestige was “pretty vague.”

The Americans countered that an initial expulsion would make the North Koreans avoid West Berlin, and they could be removed again if necessary. Despite willingness to go along with it, the UK’s Ambassador to West Germany noted “we have no clear idea of the part alleged to have been played by the North Koreans,” since the allegations relied on circumstantial evidence.

The AK Expulsion Board met on 24 February 1986 and agreed to expel the four North Koreans. The statement released alongside the announcement noted: “These four officials have been working from an office in the Western sectors of the city in order to engage in illicit arms transactions.”

New York, 2022.

Over thirty-five years later, diplomats are still at the heart of North Korea’s arms trading and procurement networks. In 2017, the UN Panel of Experts noted, “Diplomats, missions and trade representatives… systematically play key roles in prohibited sales, procurement, finance and logistics.” A Panel report released last month detailed the role of a North Korean diplomat in Moscow in procuring technology for the DPRK’s liquid-fueled, solid-fueled, and cruise missile programs.

The story of the Hughes transfer, like the helicopters themselves, appears to be a bit of a  Cold War relic. But the episode highlights a number of dimensions of North Korea’s arms trafficking networks and the challenges of countering them, which I recently discussed in an article in Asian Security.

First and foremost, it highlights the centrality of North Korea’s diplomatic missions in these networks, and their persistence over time. As I explained in the Asian Security article, this is largely for reasons of convenience and diplomatic immunity and privileges.

Indeed, the mission in Berlin – besides hosting until recently a controversial youth hostel – still remains one of the most active in these networks. For example, in 2018, a source from German intelligence noted that the Berlin embassy had in the past two years been used to acquire missile‑ and nuclear‑related dual-use goods, alongside a number of other cases recorded by the UN Panel and German intelligence. Indeed, in 2013, much like in 1986, a North Korean diplomat was ejected by the German authorities for illicit procurement activities.

The challenges in countering these networks also remain similar. The issues of diplomatic immunity and jurisdiction raised their heads in the Hughes case. While the Allied Kommandatura and the jurisdictional complexities of the allied occupation of Germany are long gone, questions of jurisdiction, diplomatic immunity, and outdated legislation remain among the most challenging in countering these networks around the world.

The Hughes case also shows that while diplomats can be made persona non grata, they can also be easily replaced. In December 1986 – just ten months after the initial expulsion – the US again pushed the allies to expel a further three North Korean diplomats who had taken over from the four expelled the previous year.

However, while the conveyor belt of diplomats to backfill these roles may be discouraging, expulsions can also disrupt. As the CIA noted later, the North Koreans had used West Berlin as their “chief operations center” in Europe until the expulsions in 1986 and 1987.

But less than two years later, Berliners would dance on the Wall, and Germany would be on its way towards reunification. The North Korean’s DDR Embassy, now in a reunified Berlin, would retain its utility for the DPRK’s illicit trading activities. The more things change…