S. Korean prosecutor ends summit probe

Thursday, June 26, 2003

By Barbara Demick ~ Los Angeles Times

SEOUL, South Korea -- It has all the elements of an intriguing political scandal: offshore bank accounts, a mysterious burglary and presidential aides on covert missions. And like the true classics of the genre, this scandal is likely to leave an indelible mark on how a nation views its history.

The case revolves around surreptitious payments of $500 million made by a South Korean company to North Korea just days before a landmark 2000 summit between leaders of the estranged Koreas, one of the happiest moments in recent decades on the Korean peninsula.

But a South Korean special prosecutor wrapped up his probe Wednesday of the so-called "cash-for-summit" scandal with the conclusion that at least a portion of the money was used to grease the wheels with the balky North Koreans.

Hyandai indictment

The special prosecutor also announced he was indicting eight people in connection with the payments, among them top former government officials and the chairman of Hyundai Asan, one of South Korea's most important companies.

"Politically motivated government aid for the North," is how the special prosecutor Song Doo Hwan characterized the payment, stopping just short of calling it a bribe, as conservatives charge.

Speaking at a news conference in Seoul Wednesday, Song also accused then-South Korean President Kim Dae Jung's government of "active involvement in the transfers of the money, keeping them secret from the people and failing to go through a justifiable procedure for sending the money." Kim won the Nobel Peace Prize for the summit and for his acclaimed "sunshine policy" of dialogue with North Korea. But South Korean conservatives point to the illegal payments along with North Korea's renewed nuclear ambitions as evidence that the entire reconciliation was a fraud.

Eight days before the landmark June 15, 2000, summit, the Hyundai Asan Corp. received a government loan of about $500 million that was in turn sent to North Korea, mostly through accounts in Macao. Some of the money was Hyundai's payment for exclusive development rights to a resort at the North's Mount Kumgang and for an industrial park near the demilitarized zone. But the prosecutor said he could not account for the purpose of about $100 million, which he concluded was "related to the summit." Those who are being indicted include the chairman of Hyundai Asan, Chung Mong Hon; Kim Dae Jung's former intelligence director, Lim Dong Won, and Park Ji Won, a former minister of culture and tourism.

But the charges for most of the suspects are for fairly minor offenses, for example, violations of a law requiring government approval for any donations of aid to North Korea.

Park also was charged with abuse of power and obstruction of public business.

"It is not like they have proven there was personal wrongdoing or embezzlement," said Moon Chung In, a South Korean academic who has been a prominent supporter of the sunshine policy. "This was a covert action that was undertaken in the national interest and in that kind of operation people can't be expected to follow every law perfectly."

The biggest mystery is exactly what happened to the money. Many people in South Korea believe it went to North Korean leader Kim Jong Il's private slush funds, while others suspect more ominously that it went to pay for weaponry that could eventually been used against South Korea.

"We don't have proof, but we understand that over the past several years, North Korea has been spending a lot of money acquiring nuclear weapons and we don't know what other means they had of coming up with that much money," said former assemblyman Lee.

The South Korean opposition party on Wednesday introduced legislation seeking to continue the probe. South Korea's new president, Roh Moo Hyun -- a self-described protege of Kim Dae Jung -- approved the naming of the prosecutor after taking office in February in what was seen as a nod to conservative critics. But he has opposed extending the prosecutor's term, which expired Wednesday.

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