Time For DOD To Pull The Plug On North Korea-Connected Auto Shipper

Peter Roff Contributor
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If there’s anyone who is certain beyond a reasonable doubt that the North Korean government or agents in its employ hacked into the computer system at Sony Pictures they’re not saying. Nevertheless suspicions still run high that the attack – which combined 21st century technological ruthlessness with the amateurishness of a fraternity prank – reminded everyone that the regime in Pyongyang considers the United States its mortal enemy.

It would make sense, therefore, for the United States government to be especially circumspect about doing business with it or with any entity that enjoys considerable and close ties to it. In this respect the U.S. Department of Defense has fallen down on the job.

Last year the United States Transportation Command, which has under its auspices the the complicated process of moving the personal vehicles of U.S. service personal and their families to and from locations overseas and domestically, let the contract for this work to International Auto Logistics, a company created specifically for the purpose of doing what the USTRANSCOM needed done.

At the time the decision was justified on the grounds that IAL put in a lower bid than American Auto Logistics, the company that had been doing the work and which in fact had been cited several times by DoD for the excellence with which it performed its assigned tasks. What did not receive much attention at the time, except for here in The Daily and in a few offices on Capitol Hill, was the corporate owners of IAL, a company called International Auto Processing, enjoyed close ties with North Korea through its officers and directors. Park Sang-Kwon, IAP’s chairman and a director of IAP Group Limited, is an American who in 2013 was granted honorary North Korean citizenship.

“This means that North Korea has acknowledged the trust they put in me,” Park said. “They were also encouraging me to start new projects in the North, more freely and aggressively,” he said at the time.

When asked about Park’s relationship with the North Korean dictator the Defense Department responded that they had looked into the matter and were unconcerned.

Whether or not they need to reexamine this relationship in the aftermath of the Sony “hack” USTRANSCOMM is under increasing pressure from Capitol Hill to once again justify its decision to change contractors because IAL reportedly is not up to the job it has taken on. Service members have been exposed to increased financial and emotional costs as cars have been delivered damaged, late, or not at all as the “on-time” delivery dropped, for the first few months of the contract, to somewhere in the 20 percent range according to the office of U.S. Sen. Patty Murray, D-Wash. That’s significantly less than the 98 percent level IAL’s contract with USTRANSCOM promises.

Thanks to congressional intervention, the Pentagon’s Office of the Inspector General is currently examining IAL’s overall performance even as sub-contractors are bailing out. Liberty Global Logistics, which handles ocean shipping of vehicles for IAL, says its owed $20 million by the company and that its failure to pay has left them on the verge of “financial ruin.” Liberty terminated its relationship with IAL.  Liberty was soon followed by a second key subcontractor, Fayetteville Vehicle Processing Center & Storage, in ending its relationship with IAL because of a payment dispute.  These could mean even longer delays and additional problems for service members.

If IAL promised USTRANSCOM it could deliver better service at lower prices than any other company bidding on the contract it may, the evidence suggests, have overstated things just a bit. The available evidence in fact suggests its failure to do what it promised has created the need for oversight investigations and recourse to backstop measures that have the whole thing costing U.S. service members and the taxpayers more than what they had been paying under the old agreement.

“I fully expect the Department of Defense to make every effort to expedite the return of the cars the families have been without for months,” Sen. Murray said in a recent letter to USTRANSCOMM head Gen. Paul Selva “Further, I expect IAL’s poor performance thus far will be fully considered when you determine whether or not to renew their contract, or to terminate the current contract.”

“Finally,” she concluded, “I would like to know what you plan to do in the future to ensure that the same inexcusable performance is not repeated when a new contractor takes over this responsibility for the Department.”

It appears that instead of addressing the root cause of IAL’s problems, USTRANSCOM has instead chosen to relax the delivery requirements of the contract, changing it to give the company more time to deliver vehicles. That will “improve” their on-time performance but leave service members and their families holding the bag, paying more out of pocket, and waiting longer to get their cars. It is doubtful that is what USTRANSCOM meant when its acquisition chief Gail Jorgenson said the new contract would “provide enhanced services to service members.”

The writing is on the wall whether or not any agency of the federal government chooses to explore and expose the North Korean connection lurking behind all this. One thing however is almost certain: according to some of the people on Capitol Hill who have followed this issue from the start, it would have been hard for the security forces in Pyongyang to make a bigger mess of things if they had set out to do so deliberately than what has actually happened. We presume they were speaking tongue in cheek.

Peter Roff is a former senior political writer for United Press International and is a senior fellow at Frontiers of Freedom, a non-profit group concerned with securing the nation’s defenses. He appears weekly as a commentator on The Daily Ledger, a program airing on the One America News Network.