The State Department’s chief North Korean negotiator, Christopher Hill, is currently in Pyongyang. He should not be there; his presence can only worsen the state of affairs between the U.S. and North Korea. In fact, it already has.

To understand why requires some background. In February of this year, Hill negotiated a two-stage interim arrangement with North Korea. During the first stage, the militant state agreed to shut down and seal by April 14 its reactor in Yongbyon, under the supervision of international inspectors. In the second, the North Koreans promised to disable all their nuclear facilities and to disclose all their nuclear programs. In return, the United States and Japan agreed to lift some sanctions and to start the process of normalizing relations—and to provide a million tons of heavy fuel oil or an equivalent amount of aid. The State Department called this deal a “breakthrough.”

Not formally part of the deal was America’s promise to allow the return of about $25 million in North Korean funds held in the Macau-based Banco Delta Asia (BDA). In September 2005, the Treasury Department effectively froze these assets by designating BDA a “primary money-laundering concern.” (BDA had previously helped North Korean leader Kim Jong Il hide his cash, distribute counterfeit American currency, and launder the proceeds of other state-sponsored criminal activities.) Pyongyang refused to continue participating in Beijing-sponsored disarmament talks until all frozen funds were returned, and the Chinese sided with Kim’s government. In a humiliating about-face, Washington ultimately bowed and freed all the monies as of April 11 of this year.

The North Koreans, however, did not attempt to repatriate the funds for more than two months. The money finally moved last week, passing through the New York branch of the Federal Reserve on its way to a North Korean account in Russia. Pyongyang subsequently invited inspectors from the International Atomic Energy Agency (IAEA), the UN’s nuclear watchdog, to come to the North to prepare for Yongbyon’s shutdown. But today Kim Jong Il’s government told the IAEA inspectors to stay at home: reports had surfaced that the Banco Delta Asia money had not yet reached North Korean hands.

Hill is still in Pyongyang, presumably trying to get the February deal on track again. This is a mistake. It is now more than two months since April 14, the date the North Koreans should have shut down Yongbyon. The United States has already let them use the American banking system to return tainted funds, possibly in violation of American law.

What more can we do to accommodate Pyongyang? Hill has certainly done too much. The dispute over the funds in Macau was never about the $25 million—a relatively small sum even by North Korean standards. It was Pyongyang’s way of testing Washington’s will. Having prevailed in forcing America to unfreeze the money, North Korea is now pushing its advantage even further. And Hill’s continued presence is sure to be read as evidence of American weakness.

The New York Times this morning reported that the Bush administration is now considering buying the uranium-enrichment equipment the North Koreans purchased from Pakistan’s Dr. A.Q. Khan, the infamous nuclear black marketeer. But the U.S. government has tried repeatedly to acquire the North Korean nuclear program with cold, hard cash—and failed. (The first such attempt was in 1994, under the Agreed Framework brokered by Jimmy Carter.) By now, everyone should know that this approach is unworkable as long as Kim remains in power. And Christopher Hill should get back on his plane as soon as possible.