$400 Million Funneled into North via Paper Companies

An allegation is stirring a heated social debate. According to the allegation of Grand National Party (GNP), the government secretly gave, via one of Hyundai affiliate company, $400 million won to North Korea at around the summit between North and South, which took place in June of 2000.

On September 26, 2002, the GNP, after making allegations including the secret give-out, requested for the Congressional National Investigation to find out the truth of the allegations.

On the other hand, Millennium Democratic Party (MDP) filed a criminal claim with the Prosecutors’ Office, charging GNP’s Rep. Um Ho-sung with defamation. Rep. Um is the person who made the secret contribution allegation.

The confrontation between the two parties is getting fiercer day after day. Again on Sep. 26, they held press conferences and criticized each other.

Rep. Um, during Sep. 26th session of a congressional national auditing, alleged, “Someone tipped me off that $400 million Hyundai Merchant Marine (HMM) had loaned from Industrial Bank was drifted into the account of a paper company of North. Asian Pacific Commission of North Korea has set up the paper companies in Hong Kong, Macao and Beijing to make hard currency.”

Previous day, another GNP member Lee Sung-hun alleged that Hyundai Construction Co. secretly provided approximately $150 million to North. But on Sep. 26, he contended, “From May to June of 2000, Hyundai Construction Co. transferred a total of $150 million to Hong Kong and Singapore in the name of real estate investment. Then the money was sent to North via 6 bank accounts.” And he also asserted that, thus, the total amount of secret monetary aid to North at around the North-South summit came to $550 million, exceeding what Rep. Um has alleged (i.e. $400 million).”

Rep. Lee continued, “The decision was made by Chairman Lee Ik-chee, who was then a powerful figure within Hyundai Group. Upon Chairman Lee’s direction, director Kim Jae-soo conducted the transferring.”

Also on Sep. 26, GNP’s Chairman Suh Chong-won held an emergency press conference and demanded “The Congressional National Auditing has found out that Kim Dae Jung administration secretly paid $400 million to North via Hyundai companies. It’s like the administration bought the summit. In order to find out the truth behind this act of treason, we should immediately commence on the Congressional National Investigation.”

Chairman Suh continued, “The problem does not lie just in the fact that the government gave money. The problem lies in the fact that North used the money to build up its military arsenal. That is what US Congress has found out. Actually, US government informed our government of this in February of 2001. Nonetheless, the government has kept lying to the public.” He also stressed, “When all the relevant facts are brought to surface, President Kim should resign at once regardless of his remaining term.”

In response, MDP’s Chairman Han Hwa-kap also held an emergency press conference on Sep. 26 and said, “Of the loan to the HMM, $18 million has already been paid back. Payments on the rest will also be made. Under these circumstances, without any hard evidence, how could the GNP make a bloated allegation that the government gave money to the North. The GNP should stop making allegations motivated by partisanship.”

Chairman Han added, “GNP’s Presidential Candidate Lee Hui-chang should make clear whether what he really wants is peace or war.” He also requested, “The government should break its silence. It has kept silent since the matter was done but by Hyundai, not by it. But its silence has led the GNP to make more allegations. The government should make the facts and its position known and do what it can do to fight back the allegations.”

The same day, the MDP held an emergency meeting of its congressional members including its chairman and floor whip, Chong Kyun-hwan, and decided to file criminal claims with the prosecution against Rep. Chong Hyung-keun and Um Nak-yong, the former chairman of Industrial Bank for defamation.

Blue House Chief Press Aide to President Park Suk-sook said, “The allegation is in a nutshell a baloney. How could they mention the word ‘act of treason?’ It’s like deserting the least ethical behavior expected of a politician. It’s totally immoral. The GNP should account for the groundless allegation and distortion it has been waging.”

In the meanwhile, Lee Keun-yong, head of Financial Supervisory Commission, reinterpreted, in the Sep. 26th press conference, former Chairman Um’s testimony, and said, “Former Chairman of Industrial Bank Um Nak-yong may have understood what HMM’s president Kim Choong-sil’s remarks as saying, ‘The government should pay back the loan for Hyundai.’ What President Kim meant was ‘Business projects performed in North are not purely private in nature. Thus, the government should help us.’”

Young-Chan Yoon Seung-Ryun Kim yyc11@donga.com srkim@donga.com