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KIM'S NUCLEAR GAMBLE
Written, Produced and Reported by Martin Smith
Coproduced and Directed by Marcela Gaviria

ANNOUNCER: North Korea's nuclear ambitions are now clear.

Pres. GEORGE W. BUSH: We now know that that regime was deceiving the world and developing those weapons all along.

ROBERT GALLUCCI, Asst Secretary of State, 1992-01: Day after day, the North Koreans turn up the heat another notch.

ANNOUNCER: North Korea says that it needs nuclear bombs to defend itself against an American attack. President Bush has drawn the line.

Pres. GEORGE W. BUSH: Today the North Korean regime is using its nuclear program to incite fear and seek concessions. America and the world will not be blackmailed.

MADELEINE ALBRIGHT, Secretary of State, 1997-00: This administration has dug its heels in and said anything that we do vis-a-vis North Korea is appeasement. Once you define it that way, it's very hard to un-paint yourself.

RICHARD PERLE, US Defense Policy Board: It was pretty clear that we were being blackmailed. I don't believe that we ought to pay the North Koreans to get them to sit down.

ANNOUNCER: While the United States debates how and when to talk to North Korea, FRONTLINE investigates Kim Jong Il's brinksmanship.

WILLIAM PERRY, Secretary of Defense, 1994-97: We have months, not years, to resolve this problem before it reaches a point of no return.

ANNOUNCER: Tonight on FRONTLINE, Kim's Nuclear Gamble.

NARRATOR: The Cold War ended 14 years ago, but it seems no one told the North Koreans. The capital, Pyongyang, remains their version of a utopian socialist showcase. Its murals and monuments celebrate the victory of the working class, its wide streets and apartment towers the products of central planning. Underground, party workers ride to work on gleaming subway trains.

But Pyongyang is an illusion. Most of North Korea is impoverished, if not famished. Foreign aid workers estimate that as many as two million people might have died of starvation between 1994 and 1998. Others, especially children, are malnourished. North Korea is anything but a socialist paradise.

ASHTON CARTER, Asst Secretary of Defense, 1993-96: There's no question that it's a very strange place. It is heartbreaking what the situation of children and old people is. And therefore, one has to realize that you're dealing with about the most dangerous situation you can imagine, of isolated, repressive government and a people that have suffered in unimaginable ways. History, human nature, would tell you they can't go on like this forever.

And while that's true, the North Koreans see themselves as a miniature Soviet Union arrayed against a hostile world. The paramount objective of the North Korean regime is survival of itself.

NARRATOR: The man who built North Korea is the late Kim Il Sung. In spite of the country's hard times, he is still revered here as a kind of deity, a great leader who has miraculously defended his tiny nation against much larger, more powerful enemies. With Russian backing, he fought off Japanese occupation in the '40s. After partition of Korea following World War II, he led a war of aggression against South Korea and the United States in the '50s, the Korean war. After a million dead, including 35,000 Americans, a ceasefire was called, but no surrender. The country remained divided and officially still at war. Kim stayed in power in communist North Korea. He built a society that worshiped him as the nation's sole savior.

CROWD: Kim Il Sung! Kim Il Sung!

JAMES LILLEY, US Ambassador to China, 1989-91: It's almost superhuman, what this man was. He was a god-king. And it's the cult of personality that was built around Chairman Mao in China in spades. It has the elements of Nuremberg in 1936, with goose-stepping troops going down there. It's a powerful image that you get. You take the cult of personality, you take Nuremberg, and then you add, as many say, the touch of 1984, George Orwell.

NARRATOR: Since the Korean war, the United States has often come into conflict with this small, belligerent nation. But understanding North Korea's intentions has always been difficult.

DONALD GREGG, CIA 1951-82: I refer to North Korea as the longest-running intelligence failure in U.S. espionage.

NARRATOR: Donald Gregg spent 14 years in northeast Asia, trying to recruit undercover operatives to work inside North Korea.

DONALD GREGG: They were very difficult to recruit, I think the reason being that they came from a country that had a tradition of being the "hermit kingdom," trying to shut out the incursions of foreigners. They came from a Confucian tradition, very tight family structure. And then there was the overlay of self-reliance and the overlay of the particularly virulent kind of Marxism which had been adopted in the north. And they were just extremely difficult to get at.

And then there was the very difficult problem was if you did get one to agree to help, it was almost impossible to do anything with him once he returned to North Korea.

NARRATOR: As a result, the U.S. has relied almost entirely on satellite photos. The current conflict with North Korea began in 1989, when one photo showed new construction at a nuclear complex near the town of Yongbyon. Some American intelligence analysts suspected the North Koreans were in the early stages of building an atomic bomb.

At the time, the Cold War was ending and North Korea was losing the security guarantees and economic support from the Soviet Union that had sustained it for 45 years. Kim Il Sung was considering his alternatives.

MARTIN SMITH, FRONTLINE Correspondent: What did the North Koreans want?

CHARLES KARTMAN, State Department, 1975-01: We didn't know, at the time. We thought they wanted nuclear weapons. And as we got into negotiations with them, we came to understand that they were willing to consider other routes to improving their own security and that the route that seemed to attract them the most was a new relationship with the United States.

JAMES LILLEY: Well, the opening probably came in January, 1992. And this is when Kim Yung Sun, probably fifth to seventh in the hierarchy of North Korea, comes to New York City. And we had a whole day with him. And the idea was that this was the highest-level meeting we'd had with the North Koreans, really, since the armistice.

MARTIN SMITH: Since '53.

JAMES LILLEY: Since '53. And they seemed to be anxious to open up with us.

NARRATOR: It was encouraging that during those first meetings, the North Koreans agreed to allow a team from the International Atomic Energy Agency to visit the suspect nuclear facility at Yongbyon. The delegation was led by then IAEA chief Hans Blix.

HANS BLIX: We are here to familiarize ourselves with the nuclear program of your country.

NARRATOR: Blix's tour was prelude. What he and the United States suspected was that the North Korean's were secretly using this five-megawatt reactor and a reprocessing facility to turn spent fuel into weapons-grade plutonium. Before leaving, Blix arranged for fully-equipped inspection teams to follow.

But over the next several months, inspections did not go well. The Koreans repeatedly blocked inspectors from visiting two of Yongbyon's suspected nuclear waste sites. The North Koreans understood that their ability to improve relations with the outside world was at stake. But apparently, the price was too high.

Just seven weeks after President Clinton took office, Kim Il Sung reversed course. North Korea announced it was going to withdraw from the Nuclear Non-Proliferation Treaty, or NPT. Clinton appointed Robert Gallucci to quickly start a new round of negotiations.

ROBERT GALLUCCI, Asst Secretary of State, 1992-01: More than once in that first meeting. Vice Foreign Minister Kang said, "You wish to strangle us." I told him that we did not have the objective of strangling North Korea. I told him that we actually did not pose a threat to North Korea, unless, of course, North Korea did something to threaten our allies in South Korea or in Japan or the international community.

NARRATOR: The administration was under heavy domestic pressure. Republican opponents repeatedly attacked the Clinton administration for even trying to negotiate, arguing that the government had no business talking to the North Koreans.

ROBERT GALLUCCI: We have made clear to the DPRK that certain steps must be avoided if our discussions are to continue.

The real crisis period was May and June of '94, when we seemed to be headed more on a road to war than we did on a road to a negotiated end to the conflict. That was a very tense time.

MARTIN SMITH: And you walked out on the negotiations, at one point.

ROBERT GALLUCCI: We did. We had warned the North Koreans not to do something, and they quite deliberately did it.

NARRATOR: On April 19th, 1994, North Korea raised the nuclear stakes by announcing it was going to move its stock of irradiated fuel from its five-megawatt reactor, without providing international inspectors the ability to monitor the process. The North Koreans were also threatening to go one step further.

WILLIAM PERRY, Secretary of Defense, 1994-97: They were ready to reprocess the fuel from that reactor. They announced they were going to reprocess the fuel from that reactor. And had they done that, that would have given them enough plutonium to make about five or six nuclear bombs.

MARTIN SMITH: What was it that prompted them to take those actions?

WILLIAM PERRY: My judgment then and my judgment today was that they determined that they needed nuclear weapons for their own security. So we decided that we would take every action to try to stop them going ahead with that nuclear weapon program, even if it would risk war.

[www.pbs.org: Read Perry's interview]

MARTIN SMITH: You were willing to go to war?

WILLIAM PERRY: We were willing to risk war. We seriously considered solving the problem directly by simply striking the reactor and the processor at Yongbyon.

ASHTON CARTER, Asst Secretary of Defense, 1993-96: We analyzed each building at Yongbyon, particularly the reactor, also the fuel fabrication plant, the reprocessing plant, the reactors under construction. And we were absolutely confident that we could have carried out a strike which would have been surgical within its own frame.

MARTIN SMITH: So why not do it?

ASHTON CARTER: Well, the larger consequences would be far from surgical. North Korea maintains a million men on the DMZ, thousands of artillery tubes that are trained on Seoul and Scud missiles that are trained on South Korea. The intensity of violence would be greater than any the world has witnessed since the last Korean war and that would shock people.

CHARLES KARTMAN: The estimates are up to 100,000 American casualties.

MARTIN SMITH: And plus civilian deaths.

CHARLES KARTMAN: Presumably. It's a terrible scenario to try to think through. But hundreds of thousands of deaths, yes.

NARRATOR: Seoul, the capital of South Korea, is a city of 10 million only a one-hour tank drive from the North Korean border. The Clinton administration opted for U.N. sanctions. However, Ambassador Gallucci and Secretary Perry realized this move would also be extremely provocative.

ROBERT GALLUCCI: Even just a sanctions resolution we all thought might well lead the North Koreans to a military response.

WILLIAM PERRY: It was in that context, in that-- during the discussion about the sanctions, that North Korea made their quite inflammatory statements, saying that they would consider sanctions an act of war.

Minister PARK YONG SU: [subtitles] If you force us to go to war, we will go at any time.

NARRATOR: The remarks came from Park Yong Su, a North Korean negotiator, and were captured on a closed-circuit video.

Minister PARK YONG SU: [subtitles] Seoul is not far from here. Once the war begins, Seoul will turn into a sea of flames. And you will probably be dead.

WILLIAM PERRY: This is pretty strong language, and it got our attention, which I'm sure is what the North Koreans intended that it do.

NARRATOR: In South Korea, authorities called for civil defense exercises to prepare the country for an attack. Though aware of the risks, Clinton still decided to push for full sanctions. He also asked the Pentagon to present options for reinforcing U.S. troop strength in South Korea.

ROBERT GALLUCCI: And so that led us to that one now somewhat famous meeting of the National Security Council, which the president held in the Cabinet Room, attended by the secretary of state, secretary of defense, the vice president, chairman of the Joint Chiefs of Staff -- a whole lot of people involved -- in which the secretary of defense presented three military options.

WILLIAM PERRY: I advised President Clinton that we ought to reinforce our military forces. We had gone over the war contingency plans very carefully and had concluded that we-- in the event of an invasion from the north, we would undoubtedly win. We would be successful in defeating the north. But how many casualties we'd suffer would depend very much on how well-prepared we were. We were literally in the process of giving the briefing to him, laying out the three alternative options, when the call came in from North Korea

ROBERT GALLUCCI: The phone call comes from Jimmy Carter, who is in Pyongyang at the time, talking to Kim Il Sung, in which Jimmy Carter tell me-- I step out of the meeting with the president to step into a small room to talk to the former president. And Jimmy Carter then describes a possible way out of this situation.

NARRATOR: Former president Jimmy Carter had gone on a private trip to Pyongyang to broker a peace deal, even though some senior members of the Clinton White House opposed his effort.

Pres. JIMMY CARTER: I was given a list of all the U.S. demands concerning nuclear program, primarily, but a few others. And when Kim Il Sung agreed with me directly and personally that he would comply with all those demands that I relayed as a messenger, then I was very relieved about that.

ROBERT GALLUCCI: There was in the room some unhappiness over the deal. But even--

MARTIN SMITH: Carter had freelanced.

ROBERT GALLUCCI: Well, it wasn't only that Carter had freelanced. It's that President Carter also told me he was about to go on CNN and say what the terms of this would be.

ANNOUNCER: This is CNN breaking news.

ANCHOR: It is now past midnight Friday morning in North Korea. And later today, former president Jimmy Carter plans a second day of--

MARTIN SMITH: You made a decision to go on CNN while you're sitting there--

Pres. JIMMY CARTER: Yes.

MARTIN SMITH: --negotiating with Kim Il Sung.

Pres. JIMMY CARTER: I felt that it was important for the commitments that Kim Il Sung had made to be revealed to the public. It would have made it much more difficult for him to reverse himself or to violate his commitments.

MARTIN SMITH: But it wasn't a chess move on your part to try to get this thing aired--

Pres. JIMMY CARTER: Yes.

MARTIN SMITH: --in order to box in both sides to bring them together?

Pres. JIMMY CARTER: Well, I can't deny that I hoped that it would consummate a resolution of what I considered to be a very serious crisis.

NARRATOR: Kim Il Sung told Carter he would freeze the reactor at Yongbyon and go back to the negotiating table. But a month later, he suddenly died of a heart attack.

NORTH KOREAN ANNOUNCER: [subtitles] The Great Leader's hearse is approaching! Great Leader, is this true? Are you leaving without us? [weeps]

NARRATOR: Hundreds of thousands of Koreans came into the streets. The spectacle of people fainting and sobbing lasted days and gave rise to predictions by U.S. and South Korean intelligence analysts that the North Korean government would now finally fall and that the best policy was inaction. But they underestimated the Great Leader's son, Kim Jong Il.

He had been ridiculed in the Western press as a playboy who drank expensive Hennessy cognac and cavorted with Swedish blondes. He was insecure about his height, so he wore boots with heels and bouffed his hair. He had a voracious interest in movies. He once aspired to be a film producer, and in the 1980s, he kidnapped a South Korean film star and her director husband to come show him how.

But there is another side to Kim Jong Il. He is linked to acts of terrorism against South Korea, one a bomb blast in 1983 that killed four government cabinet members, another in 1987 that killed 115 civilians aboard a South Korean airliner.

Kim is also tied to North Korea's nuclear program. One of the only public murals in North Korea depicting Kim Jong Il is located at the entrance gate of the Yongbyon nuclear complex. The question now was, would Yongbyon's founder deal away his pet project?

On the day of his father's death, negotiations restarted in Geneva between Ambassador Gallucci and Vice Minister Kang. Surprisingly, in October, 1994, the two sides agreed. The North Koreans would shut down the Yongbyon complex and cease nuclear plant construction at another location in return for the construction of two modern light-water reactors, reactors that are harder to use for weapons development. They were also promised 500,000 metric tons of heavy fuel oil annually until the first light-water reactor was complete.

In Washington, many considered the deal an outrage. James Lilley first heard about the deal when he was visiting with Clinton administration officials.

JAMES LILLEY, US Ambassador to China, 1989-91: I think that it was a deal based on extortion. I was in the White House when that deal was announced about the light-water reactors. And I said, "Well, if that's it, that's it." And then they said, "We're going to deliver 500,000 tons of oil a year." I almost fell through my chair. I said, "You can't make that kind of a commitment. You haven't got the authorization to do this. Under what program are you going to do it?" "We can handle it. Never mind."

MARTIN SMITH: Who says that?

JAMES LILLEY: The administration.

MARTIN SMITH: Clinton.

JAMES LILLEY: Well, it wasn't Clinton. Tony Lake was there. Christopher was there. Gore was there. All of them were there. And I forget which guy-- person said it, but-- "Don't worry about it. We can handle this. We can reprogram money around. We get these-- this money back."

MARTIN SMITH: What did you say?

JAMES LILLEY: I said, "Good luck." I said, "I don't think this makes any sense."

MARTIN SMITH: Anybody listen to you?

JAMES LILLEY: No.

ROBERT GALLUCCI: Under the Agreed Framework, they will accept those inspections. If they don't accept them--

NARRATOR: The Agreed Framework was defended before the Senate Foreign Relations Committee by Robert Gallucci and William Perry.

WILLIAM PERRY: This is the agreement which both sides would agree to. I could get a better agreement if I could sit on both sides of the table, but I'm only allowed to sit on one side of the table. And there's another country with other interests sitting on the other side of the table.

STEPHEN BOSWORTH, US Ambassador to S. Korea, 1997-00: The Framework was hammered.   Within 10 days after the Framework was signed, it became a political orphan. The Democrats, President Clinton, lost control of both Houses of Congress. And conservative Republicans, particularly in the House, who hated the Agreed Framework, believed that it was basically an example of the U.S. paying extortion, began to oppose it very fiercely.

ROBERT GALLUCCI: Yeah, we did not get tickertape parades, as it turned out.

MARTIN SMITH: What happened? What did you hear?

ROBERT GALLUCCI: That we had submitted to blackmail. The North Koreans were threatening us with a nuclear program, and we gave in and gave them good things

Sen. JOHN McCAIN (R), Arizona, 1985-Present: I spoke out against it. I debated Mr. Gallucci. I did everything in my power because I thought it was a terribly flawed agreement that would result in us being where we are today, with a huge, enormous threat to the United States of America.

MARTIN SMITH: You called Clinton an appeaser.

Sen. JOHN McCAIN: Well, you know, if it quacks like a duck and walks like a duck, it's appeasement.

MARTIN SMITH: So what was the alternative?

Sen. JOHN McCAIN: The alternative was to say, "You stop this development of nuclear weapons, or we exercise every option we have," not excluding the military option, sanctions, conversations with the Japanese, the Chinese, the South Koreans, the Russians. Exercise every option. Don't engage in bribery, which is what it was. It was bribery.

MARTIN SMITH: But in retrospect, they would have 50, 60 bombs by now, and they don't.

Sen. JOHN McCAIN: In retrospect-- in retrospect, if they hadn't stopped doing it, we would have acted militarily. And we wouldn't be facing the magnitude of the threat that we're facing now.

MARTIN SMITH: You had tremendous resistance to this. McCain calls it appeasement. What was the consequence of that?

CHARLES KARTMAN, State Department, 1975-01: General dissatisfaction with the whole Agreed Framework made every appropriation just a-- one of the rings of hell.

MARTIN SMITH: And you would have to go--

CHARLES KARTMAN: On hands and knees--

MARTIN SMITH: --to Congress--

CHARLES KARTMAN: Yes.

MARTIN SMITH: Asking for the money.

CHARLES KARTMAN: Repeatedly. Repeatedly.

NARRATOR: While Congress dragged its feet, a Korean-speaking State Department official, Ken Quinones, was dispatched to Yongbyon. He was there, along with inspectors from the IAEA, to verify that the reactor was shut down and that the North Koreans properly handled and stored their plutonium-laden spent fuel rods.

MARTIN SMITH: What was that like, being around that spent fuel?

C. KENNETH QUINONES, State Department, 1980-97: It was an intense experience. It tested you physically. It was bitter cold. Food rations were sometimes in very short supply. And of course, we worked in a highly radioactive environment.

MARTIN SMITH: A lot of tension?

C. KENNETH QUINONES: Tensions would flare over somebody looking strange at another person or making a-- the international hand gesture

MARTIN SMITH: The international hand gesture?

C. KENNETH QUINONES: Yeah. [laughs] Yeah, the finger.

MARTIN SMITH: But you succeeded.

C. KENNETH QUINONES: Yeah, ultimately, we-- we did--

MARTIN SMITH: Stored all the 8,000 fuel rods.

C. KENNETH QUINONES: They all got stored. North Korea did, in fact, comply with all the stipulations of the Agreed Framework, as stated in the annual reports by the International Atomic Energy Agency.

MARTIN SMITH: What was the United States' record on compliance?

C. KENNETH QUINONES: The U.S. record was quite spotty, frankly speaking.

STEPHEN BOSWORTH: In my judgment, the administration was not prepared to expend very much political capital on behalf of implementation of the Agreed Framework.

NARRATOR: State Department official Stephen Bosworth was head of KEDO, the Korean Peninsula Energy Development Organization, an entity created by the Agreed Framework to build the two promised light-water reactors. In part because of Congressional opposition, construction fell behind and delivery of the heavy fuel oil was often late. The North Koreans complained frequently. Bosworth complained to his colleagues in the State Department.

MARTIN SMITH: So tell me what arguments you made.

STEPHEN BOSWORTH, US Ambassador to S. Korea, 1997-00: That, first of all, this was an attempt to draw North Korea out of its dark cave, out into the world, and that it was in our interest to break down that isolation in which North Korea existed. Moreover, that it was very much in our interest, since this was North Korea's first agreement, in effect, with the outside world, to make sure that we complied with the agreement in a meticulous fashion, to demonstrate to the North Koreans that they could enter into agreements with us and others and be confident that the commitments that we made in those agreements would be implemented. Failure to, basically, deal with the North Koreans would cause them to do increasingly irresponsible and dangerous things.

NARRATOR: While tensions over compliance with the Agreed Framework mounted between the U.S. and North Korea, a new president, Kim Dae-jung, came to office in South Korea. He instituted a new approach to dealing with North Korea called the Sunshine Policy, advocating openness and engagement. It assumed that Kim Jong Il wanted to modernize his economy. President Kim's right-hand man was Lim Dong-won.

LIM DONG-WON, S. Korean Unification Minister, 1998-01: I was the architect of Sunshine Policy and evangelist of our Sunshine Policy. We want to induce change in the north. That is the way to build confidence between the south and north and to make peace on the Korean peninsula. So we have to seize this moment.

NARRATOR: Lim, a former chief of South Korean intelligence and staunch anti-communist, would make many trips to meet with Kim Jong Il.

MARTIN SMITH: And what kind of man was he?

LIM DONG-WON: He has a sense of humor. He's, you know, very interesting-- he has a very interesting personality. He's a wine drinker.

MARTIN SMITH: Cognac, I hear.

LIM DONG-WON: No, no. He kicked cognac. That's what he told me.

MARTIN SMITH: He told you that he quit drinking cognac?

LIM DONG-WON: Yeah. Now just prefer to drink wines only. For his health. That's what he said.

MARTIN SMITH: Did you talk to him about the dire situation in the countryside, the starvation, the fact that he spends so much money on the military and--

LIM DONG-WON: Well, I didn't touch much of that kind of things.

NARRATOR: Just as diplomacy seemed it had a fighting chance, however, North Korea played another surprise card. On August 31st, 1998, the North Koreans launched the Taepo Dong missile, a design that, if successful, could reach Hawaii or Alaska, a missile developed by a country that already derived 25 percent of its export income from sales of Scuds and other short-range missiles into the Middle East, Pakistan and Iran.

[www.pbs.org: Study North Korea's missile trade]

ASHTON CARTER, Asst Secretary of Defense, 1993-96: The North Koreans fired this ballistic missile, and everybody in the region and the United States woke up and said, "Boy, we haven't been paying attention to them, but they've been-- sure been paying attention."

NARRATOR: The missile launch was an embarrassment for Clinton, who had backed South Korea's Sunshine Policy. Mandated by Congress to review U.S. policy towards North Korea, the president called once again on William Perry.

WILLIAM PERRY, Special Envoy to N. Korea, 1998-00: The Agreed Framework was on the block. We looked seriously at the approaches, many in U.S., many in Congress had asked us to consider, one of which was that we should simply put pressure on the North Koreans until their government collapsed. We rejected that alternative. They have an iron police state in North Korea, and the misery of the people, in our judgment, was not likely to lead to a popular overthrow of the government. Secondly, we didn't have enough time. Even if that strategy was successful, in the most optimistic view of it, it would take several years. So it was a very difficult problem.

NARRATOR: Upon Perry's recommendation, the Clinton administration stuck with diplomacy. In 2000, Secretary of State Madeleine Albright flew to Pyongyang to negotiate a missile deal. Her CIA briefing had not prepared her for the man she was about to meet.

MADELEINE ALBRIGHT, Secretary of State, 1997-00: We had very peculiar information about Kim Jong Il, that he was a recluse, I think "delusional" actually was a word that was used. But Kim Dae-jung had reported that it was possible to have perfectly decent, rational conversations with him.

WENDY SHERMAN, Special Envoy to N. Korea, 1998-00: I think that both Secretary Albright and I were surprised about Kim. He had some humor. He actually, and very unsurprisingly, had tremendous pride in himself, in his country.

CHARLES KARTMAN, State Department, 1975-01: He's a reasonable man, who was fully engaged with us for that very extensive period that Secretary Albright was with him. He always seemed to be personally attentive to the people that he was hosting.

MARTIN SMITH: Gracious, in other words.

CHARLES KARTMAN: I hate to use the word lest I be criticized later, but yes, I would say he was gracious.

MADELEINE ALBRIGHT: At the end of about three or four hours of official meetings, he said, "I want to take you tonight to a huge celebration." What we were going to was the recreation of the 50th anniversary celebration of the Workers Party.

CHARLES KARTMAN: We proceeded to climb into this long motorcade that his limousine headed, and we went off to this stadium. Now, we pulled up to the stadium, and it was pitch dark. No cars in the lot, no people walking around, no sound. You could have heard a pin drop. So we walked into the stadium, and then, all of a sudden, the lights all flashed on, and this wall of sound from a quarter of a million North Koreans hit us all at once.

MADELEINE ALBRIGHT: We walked in, and we were in a stadium where there was something like 200,000 to 250,000 people who applauded wildly.

CHARLES KARTMAN: Everybody was on their feet, with their hands in the air, and they were all screaming and shouting their hosannas to Kim Jong Il. And this hit us, and it made me feel pretty grand, I can tell you.

WENDY SHERMAN, Special Envoy to N. Korea, 1998-00: That has to do something to someone's psyche, when you're cheered on like that. It was as Stalinist a country as ever has been.

[www.pbs.org: More about the North Koreans]

MADELEINE ALBRIGHT: I have to say, I was fascinated. You know how they do those flash cards at our big football games, where students can deliver various messages? Well, this was done in the most precise way, where they showed tableaus of various scenes of countrysides. And then there was one-- and they were so good at it that they could make a rocket go up by moving the cards, and it was a Taepo Dong missile.

NARRATOR: The next day, Secretary Albright and Chairman Kim sat down again and talked about missiles. Kim Jong Il also reiterated an invitation to President Clinton to come to North Korea.

MADELEINE ALBRIGHT: The purpose, I think, generally, of his policy was to get some recognition from the United States that North Korea existed, that we should have diplomatic relations. And so he was really quite open in discussions that we had, in terms of limiting his missile program.

[press conference] We must be pragmatic and recognize the road to fully normal relations remains uphill--

WILLIAM PERRY: We had the deal almost in hand. The detail or two that needed to be worked out were very, very important details to do with how all this would be verified. But those were not the issues that curtailed the visit so much as we just ran out of time.

NARRATOR: With the coming of President George W. Bush, both North and South Korea asked for reassurance that the missile talks initiated by the Clinton administration would continue. It appeared the transition would be smooth.

COLIN POWELL, Secretary of State: [March 6, 2001] We do plan to engage with North Korea, to pick up where President Clinton and his administration left off. Some promising elements were left on the table.

NARRATOR: The South Koreans pushed for an early summit meeting.

LIM DONG-WON, S. Korean Unification Minister, 1998-01: My foreign minister went to Washington to prepare for this summit meeting. And during that consultation with the Department of State and Secretary Powell, they assured us that new administration's North Korea policy will be, you know, continuing where the Clinton administration took off.

MARTIN SMITH: He assured you that the policies--

LIM DONG-WON: Yeah.

MARTIN SMITH: --of the Clinton administration would continue--

LIM DONG-WON: Yes.

MARTIN SMITH: --into the Bush administration?

LIM DONG-WON: Yes. Yeah. So we are very happy to hear that. And then President Kim came to Washington, D.C.

NARRATOR: But the summit was not what the South Koreans expected. Although Bush publicly endorsed South Korea's Sunshine Policy--

Pres. GEORGE W. BUSH: It's been my honor to welcome President Kim here to the Oval office. We had a very good discussion.

NARRATOR: --privately, he told Kim talks with the north were off and the U.S. did not support a policy of engagement. Kim Dae-jung was stunned.

LIM DONG-WON: It was a real unfortunate thing.

MARTIN SMITH: Was he angry? He was furious.

LIM DONG-WON: Maybe so.

MARTIN SMITH: He talked to you when he returned to Seoul?

LIM DONG-WON: He was, of course, disappointed at that time, yes. And returning from Washington, D.C., North Korea immediately announced that "No dialogue with South Korean government."

MARTIN SMITH: So everything fell apart.

LIM DONG-WON: Yeah, everything fell apart.

DONALD GREGG, CIA 1951-82: President Bush said, "I don't trust Kim Jong Il. We're going to have a policy review. And we're not going to do anything until we've finished the policy review." So there was just really a cutoff of the progress that had been made.

MARTIN SMITH: So what happened to U.S. policy towards North Korea when the new administration--

DONALD GREGG: It's never had a policy. It's had an attitude.

MARTIN SMITH: What's the attitude?

DONALD GREGG: Hostility.

RICHARD PERLE, US Defense Policy Board: I think the break in continuity had to do with the belief that the policy had been wrong, that when you pay blackmail, you're asking for further blackmail.

NARRATOR: A long-time adviser to the Pentagon, Richard Perle is among those conservatives critical of Clinton, Perry and Albright's approach to North Korea.

MARTIN SMITH: I think what they would say is that talks should not have been cut off, that open dialogue should have continued.

RICHARD PERLE: That there should have been more blackmail. They wouldn't characterize it in that way, of course, but that is, in fact, what it was and what it remains.

MARTIN SMITH: But this was a policy that was advocated by the South Koreans under Kim Dae-jung. Kim Dae-jung came to Washington, for instance, early on in his administration and felt rebuffed.

RICHARD PERLE: I think Kim Dae-jung's interests and the interests of the South Koreans are not at all identical to ours. And it's understandable. Seoul is within artillery range of thousands of North Korean artillery tubes. So it's hardly surprising that the South Koreans are going to see this differently from the way we see it. But our president has, first and foremost, a commitment to the security of the United States.

NARRATOR: In North Korea, Kim Jong Il was also confronting Bush's new policy. The Clinton administration had been willing to talk before Kim made concessions or complied with existing agreements. The Bush administration was demanding concessions and full compliance before talks could begin. They also expanded the agenda. The North Koreans accused Bush of moving the goal posts.

RICHARD PERLE: I would hope that we would move the goal posts because we didn't like the playing field that was established during the Clinton administration. It was a playing field on which we were expected to pay the North Koreans not to do dangerous things, and that is not a sound basis for a policy.

NARRATOR: When President Bush came before Congress in January of 2002, talks with North Korea were still on hold. And now the terrorist attacks of 9/11 were raising new fears about weapons proliferation, the possibility that a rogue nation could sell its missiles and nuclear technology to a terrorist group. In his speech that night, Bush put a few countries on notice.

Pres. GEORGE W. BUSH: North Korea is a regime arming with missiles and weapons of mass destruction while starving its citizens. Iran aggressively pursues these weapons and exports terror--

NARRATOR: Then the president used a phrase for which he will long be remembered.

Pres. GEORGE W. BUSH: States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world.

NARRATOR: North Korea said the speech was part of an aggressive and hostile policy.

Pres. GEORGE W. BUSH: These regimes pose a grave and growing danger.

THOMAS HUBBARD, US Ambassador to S. Korea, 2001-Present: North Koreans complaining about words? Have you ever read the press statements, the governmental statements that they put out about the United States?

NARRATOR: When FRONTLINE approached the White House for an interview on North Korean policy, they referred us to the State Department, which designated U.S. ambassador to South Korea Thomas Hubbard as their spokesman.

THOMAS HUBBARD: I-- I-- it's kind of hard-- I have trouble understanding--

MARTIN SMITH: But we shouldn't let them set the moral standards.

THOMAS HUBBARD: Of course not. Of course not. You know, I-- I think there's been entirely too much focus on-- on-- on-- on words and too-- and too little focus on-- on the substance of the policy.

MARTIN SMITH: Words matter. You're a diplomat. The concern is that the policy has been, in a way, stagnant, that in the words of a former ambassador, there is no policy, at this point. There's simply an attitude.

THOMAS HUBBARD: I think that's a -- I think that's an exaggeration. The clear policy of our government is that we find nuclear weapons in North Korea to be unacceptable and intolerable.

RICHARD PERLE: What the president did in referring to the "axis of evil" was identify evil where it exists, and to make it very clear that we were going to treat evil regimes with a full recognition of what they represent. If the word "evil" doesn't apply to North Korea, it doesn't apply to any nation.

MARTIN SMITH: I don't think the argument is that evil doesn't apply to Kim Jong Il. I think the argument is that it does not have any real benefits. It's not as if we didn't already know that this place was nasty and dangerous. So what does the president gain?

RICHARD PERLE: I think he breaks with the previous policy, that said, "Well, they may be evil, but we're going to treat them as if they could be counted upon to respect an agreement. In short, we will deal with them in a way that we would not deal with a nation whose fundamental evil quality was properly understood."

MARTIN SMITH: Were you surprised by the administration's language and approach?

WILLIAM PERRY, Special Envoy to N. Korea, 1998-00: I was surprised. I thought-- I'm not surprised that some people in the administration thought that. I'm surprised that they would take that as a-- they'd take that policy approach to North Korea. I thought it was counterproductive.

MARTIN SMITH: Why? Why not show that you're tough? That you're not going to be the appeasers that the Clinton administration was?

WILLIAM PERRY: Yes, I've heard that language. Talking tough and acting tough and putting pressure on North Korea is not an effective policy. It may be therapeutic for us to say-- to talk that way, but does not accomplish our objectives and does not enhance our security.

NARRATOR: Sometime in the summer of 2002, the CIA, working with evidence that it had been collecting since the middle of Clinton's second term, concluded that North Korea was secretly pursuing an alternative nuclear weapons program.

MARTIN SMITH: Now, somewhere along the way, U.S. intelligence starts to report that they're on shopping trips, that they're in Pakistan buying high-frequency modulators, aluminum tubes.

DONALD GREGG: Apparently, we got definitive aerial photographs of equipment from Pakistan being delivered. It became a matter of certitude in July or August.

NARRATOR: They were buying equipment to build a uranium-enrichment plant. Uranium enrichment takes place in centrifuge tubes like these, but it takes two to three years to make enough weapons-grade uranium for a bomb. But like the separate program at Yongbyon, it showed Kim's intent to go nuclear.

On October 3, 2002, James Kelly, an assistant secretary of state, traveled to Pyongyang to confront officials.

DONALD GREGG: As Kelly geared up for his trip, apparently, there was a dogfight within the administration. Should he mention it? Should he not mention it? And those who said he should mention it put it right at the top of the agenda. So that really was the only thing that was discussed at his 3rd October meeting. And then, interestingly enough, the North Koreans, after caucusing overnight, came back and said, "Yes, we do have that program."

NARRATOR: Now Kim's nuclear card was on the table face up. A few weeks later, Bush played his hand. He ordered the Agreed Framework dead and cut off all future fuel oil shipments. North Korea retaliated by turning off all monitoring equipment at Yongbyon and sending inspectors home. In January, 2003, the North Koreans gave notice that they were withdrawing from the non-proliferation treaty.

NORTH KOREAN OFFICIAL: [subtitles] Because of the U.S., the NPT is void.

NARRATOR: The U.S. and North Korea are back at the brink. The U.S. has refused to talk unless Japan, South Korea and China are involved. The Sunshine Policy is also in trouble. Lim Dong-won and President Kim Dae-jung are being investigated for funneling as much as $500 million to Kim Jong Il's Singapore bank account in 1998 to buy his cooperation.

North Korea , meanwhile, still insists on direct talks with the U.S.

MARTIN SMITH: So why not talk to them? These regional powers are saying go talk to the North Koreans.

THOMAS HUBBARD: Well, do we have to give them what they want all the time? I think that's one of our-- our concerns, that-- that it might be tactically attractive for the North Koreans to try to-- try to isolate us and put pressure on us in a-- in a bilateral negotiation, but that's not necessarily in the interest of the United States. We think a multilateral approach would be much better.

Sen. RICHARD LUGAR (R), Indiana: This meeting of the Senate Foreign Relations Committee is called to order.

NARRATOR: Inside the administration, debate continues over how to structure talks with North Korea. In February, 2003, Colin Powell's deputy, Richard Armitage, a northeast Asia specialist, was called to Capitol Hill.

Sen. JOSEPH BIDEN (D), Delaware: In my discussions with the Japanese and the South Koreans, they're saying, "Multilateral is good. Count us in, but don't wait. We recommend you do it bilaterally." Now, am I wrong? Are they not recommending that?

RICHARD ARMITAGE: No, they are, indeed, suggesting that. And our suggestion is not quite that we handle these talks multilaterally, but we have a multilateral umbrella, of any sort--

NARRATOR: Armitage's performance reportedly infuriated President Bush. The next day, he called a special White House meeting and ordered a ban on any public discussion of anything that might resemble one-on-one or bilateral talks with North Korea.

LIM DONG-WON, S. Korean Unification Minister, 1998-01: There is no way but to have direct talks between North Korea and the U.S. Otherwise, war.

MARTIN SMITH: Bilateral talks?

LIM DONG-WON: Yes. Bilateral talks--

MARTIN SMITH: The Bush administration says they won't do it.

LIM DONG-WON: Yeah. Of course, they said that.

MARTIN SMITH: The Bush administration is saying we shouldn't have to give them anything. They're violating the nuclear nonproliferation treaty. They're in defiance of the world. They should be held to task, that appeasement leads to more aggressive behavior.

MADELEINE ALBRIGHT: Well, I-- it depends on if you decide that direct talks are appeasement. This administration has kind of dug its heels in and said anything that we do vis-a-vis North Korea is appeasement. Once you define it that way, it's very hard to un-paint yourself, and I think that's where we are now. I hope very much that there can be some way to get off of this escalation.

[www.pbs.org: More on the direct-talks debate]

NARRATOR: But the escalation continues. Kim Jong Il has stepped up air-raid drills in Pyongyang. In March, 2003, North Korea started up their reactor at Yongbyon. They tested two short-range missiles. They intercepted and harassed a U.S. spy plane flying off their coast. They announced they were pulling out of armistice talks that had been going on for 50 years.

The Bush administration, busy with a war in Iraq, insists it has no intention to invade North Korea and that the situation does not rise to the level of a crisis.

MARTIN SMITH: If we're willing to go to war in Iraq, why aren't we willing to go to war in North Korea?

THOMAS HUBBARD: These-- these issues have been-- been well answered by-- by a whole variety of people. But you know, we-- we continue to believe that-- that you can't just follow a cookie-cutter approach, that-- we continue to believe that the North Korean problem is one that-- that can be resolved through diplomacy.

MARTIN SMITH: What prevents them from going nuclear?

THOMAS HUBBARD: If they're determined to go nuclear, they're going to go nuclear. And then we have to deal with that problem.

MARTIN SMITH: Why isn't this a crisis?

THOMAS HUBBARD: Because we believe that this is a problem that can be solved. We don't have a precise formula for that yet, but we do believe that it is still possible.

MARTIN SMITH: They say there's no crisis.

WILLIAM PERRY: I'll be very clear on that point. I think what North Korea is doing now with the nuclear weapon program is not only a crisis, it is a serious crisis. We have, I think, months, not years, to resolve this problem before it reaches a point of no return, in terms of North Korea becoming a major nuclear power.

KIM'S NUCLEAR GAMBLE

WRITTEN AND PRODUCED BY
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ANNOUNCER: This report continues on FRONTLINE's Web site with analyses by key insiders on whether there's still time to avert a military or nuclear showdown, a chronology of the threats, deceptions and diplomatic ploys that have marked U.S.-North Korea relations, a closer look at who are the North Koreans and what is their nuclear capability, plus a Web-exclusive interview with a North Korean defector. You can watch the program again on line. Then join the discussion at PBS on line, pbs.org.

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