North Korea's party organization funding the leadership siphoned nearly all dollars paid in cash by South Korean companies as salaries for the laborers over an economic cooperative project in the border city of Kaesong, a defector told Kyodo News.

Office 39 takes away the salaries of North Korean workers and earns up to $100 million in cash annually, 59-year-old Ri Jong Ho, a former senior official of the secretive office, said in a recent interview in the U.S. capital. The cash is likely to have been used for Pyongyang's nuclear and missile development.

"The laborers are strictly supervised and do not get the pay. Senior officials (of the North Korean authority) there say that the workers are like slaves, exploited by South Korean companies," Ri said.