North Korea's Mafia Moment

A secret report says the North torpedoed and sank a South Korean ship. With tension rising in the region, what will the U.S. do?

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Shin Young-Geun / Yonhap / Reuters

As part of the investigation, the wrecked Cheonan was reassembled

On a chilly spring evening late last March, a South Korean naval ship, the Cheonan, was conducting routine exercises in waters just off the coast of a sparsely populated island in the Yellow Sea, which Koreans call the West Sea, just 10 miles (16 km) from North Korean land. The vessel, nearly 90 yards (82 m) long from bow to stern, was named after a city in South Korea in which 98 American soldiers died during a North Korean attack 60 years ago, just after the start of the Korean War. For most of the ship's 104 crew members, work was done for the day. The ship's commanding officer, Choi Won-Il, had retired to his cabin and was checking e-mail.

What happened next would shock South Koreans, roil their country's politics and contribute to a deteriorating security climate not just on the Korean peninsula but throughout East Asia — a deterioration the U.S. is now struggling to arrest. And it would eventually show, once again, the limits of American power and influence when dealing with the regime in North Korea, a government that former U.S. ambassador to Japan Thomas Schieffer describes as operating on the "Mafia model": "If you don't give me some money, I'll throw a brick through your window."

This story isn't over. In the next few weeks, South Korea is expected to release a secret and detailed report on the Cheonan incident. TIME, exclusively, has reviewed the report, 287 pages of scientific and engineering analysis. The South Koreans insist it shows that the "only plausible possibility" — in the report's words — is that the Cheonan was sunk by a North Korean torpedo. How the U.S. and other nations respond to the report will go a long way toward showing what the world can do to rein in the unpredictable regime in the North. And what it can't. Or won't.

At 9:21 p.m. on March 26, what appears to have been an explosion rocked the Cheonan. According to the report that TIME reviewed, a rush of "seawater into the boat suddenly tilted [it] to the starboard side by 90 degrees." Damage from the blast trapped Choi, the ship's commander, in his cabin; quick-thinking crew members lowered a fire hose to him through a hole in his cabin's ceiling. Choi strapped the hose to his waist so he could be hauled up to deck. Within minutes, the Cheonan was sinking; 46 South Korean sailors would wind up dead.

About a month later, the South Korean government came to suspect that a North Korean "midget" submarine sank the ship. Seoul dredged up the shattered vessel in sections and recovered the remains of what it has claimed ever since was a smoking gun: a North Korean torpedo. The South Koreans convened an international joint investigative group — with representatives from the U.S., the United Kingdom, Australia and Sweden — and on May 20 went public with a summary of its findings. Though couched in diplomatic language, the conclusion was plain enough: the North Koreans were guilty of what amounted to an act of war. The Cheonan sank near the Northern Limit Line, a disputed border, but in what indisputably are South Korean waters.

Suddenly, the U.S. and the other major powers in East Asia — China, Russia, South Korea and Japan — confronted what Kim Tae-hyo, South Korean President Lee Myung Bak's chief adviser on North Korea, acknowledges was a "security crisis." A diplomatically tense summer has followed. Relations between the U.S. and China — North Korea's lone ally and diplomatic patron — have been souring since late last year, when Beijing helped frustrate President Barack Obama's push to get a binding international agreement on climate change in Copenhagen. Washington then infuriated Beijing when it announced an arms sale worth more than $6 billion to Taiwan in January, after which China shelved plans to participate in military-to-military exchanges with the U.S. At a conference in Singapore earlier this summer, a People's Liberation Army general publicly accused Defense Secretary Robert Gates of treating China like "an enemy."

The Cheonan sinking didn't help. North Korea steadfastly denied that it had anything to do with the sinking, but a furious President Lee wanted to ratchet up sanctions on Pyongyang, and with U.S. backing, Seoul proceeded to the U.N. Security Council. For years, the U.S. has practically begged China to rein in its ally — particularly in the context of North Korea's nuclear-weapons program — but just how much pressure Beijing has ever put on the "Dear Leader," North Korea's Kim Jong Il, has always been murky. Beijing made it plain that it was uninterested in participating in new sanctions. Diplomatic sources say at first Beijing supported only a so-called presidential press statement condemning the sinking, about the weakest step the Security Council could take. The same sources say China was less interested in the evidence than in preventing anything from destabilizing the North. "They made a political decision to protect North Korea," says a diplomat.

Beijing worked successfully to get Moscow to back its position. Together, they eventually agreed to take a slightly tougher stance — the Security Council ultimately issued a presidential statement that condemned the attack on the Cheonan but failed to condemn the attacker. "North Korea committed an act of war and didn't pay much of a price for it," says Kim Dong Sung, a national assemblyman for Lee's Grand National Party.

A Nation Misunderstood
The politics of how to respond to North Korea's alleged aggression was an issue not just at the U.N. It also bedeviled Lee at home and eventually caused some strain between South Korea and the U.S., thanks to China's looming (and increasing) presence in the region.

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