[Focus] Fund diversion scandal might hit dead end

The prosecution has significantly downsized its investigation of the alleged diversion of the top intelligence agency¡¯s money into the former ruling party in the face of ever-escalating partisan conflict over the issue.

According to the investigation plans announced Tuesday, the Supreme Public Prosecutor¡¯s Office intends to purse some thieves who stole the state budget money but will give indulgences to hundreds of politicians who received the money without knowing it was stolen.

The plans announced under a situation when it is impossible for the prosecutors to interrogate Rep. Kang Sam-Jae of the opposition Grand National Party (GNP) also are interpreted as meaning a virtual Suspension or delay

The scandal mainly involves Rep. Kang, secretary general of the former ruling National Korea Party, predecessor of the GNP, who allegedly distributed more than 100 billion won from the Agency for National Security Planning (NSP) to the party candidates as campaign funds in the 1995 local and 1996 general elections.

Background of downsized probe:

Until Monday, the prosecutor¡¯s office had asserted that it would take legal action against the politicians who received the NSP money on suspicion of taking stolen goods and was considering who should be summoned and when. However, Shin Seung-Nam, deputy chief of the office, made clear Tuesday that ¡°we will confirm only who received the money and how much through various means, but there will be neither expanded investigation, nor legal action.¡±

Shin stressed that the prosecutor¡¯s office¡¯s judgment was based on common sense. What he meant was that there could be no politicians who would ask the source of the election campaign money their party gave them when they are in dire need of it.

The sudden change in the prosecutors¡¯ policy gives rise to diverse analyses. First of all, the office apparently reached a conclusion that further escalation would be little helpful to the current government, prosecution and to the nation.

In actuality, the prosecution might face a situation it cannot cope with, in the event it summons opposition politicians en masse when the GNP is staging a radical resistance, demanding the investigation of alleged slush fund of President Kim Dae-Jung and the appointment of an independent counsel to investigate the NSP scandal.

It seems that the prosecutor¡¯s office has judged that there is no need to risk any danger since the hitherto investigation result disclosed the practice of misappropriating the state budget in the past and dealt a considerable blow at the opposition party. Shin, however, did not show any reaction at all to the allegation that the prosecutors had changed policy had something to do with the successive confirmation of the fact that some ruling camp figures, including Rep. Kim Chong-Hoh, acting president of the United Liberal Democrats, also received the NSP fund.

Prospects for investigation:

The subjects for the investigation after the prosecutor¡¯s office¡¯s plan to scale down the probe was announced are Rep. Kang and some people who are suspected of being directly involved in the embezzlement of the state budget.

The prosecutors revealed that those involved are politicians who were involved in the course of the NSP money embezzlement by Kim Ki-Sup, former deputy chief of NSP in charge of operational matters, and Rep. Kang. Others are the politicians who received a huge amount of money, although they know it was the budget of the spy agency, it said.

However, prosecutors declined to elaborate on who they were. A prosecutor said only, ¡°We are now investigating.¡± It is expected that the number of the politicians to be probed would be minimal.

Those who can be initially regarded as suspects include leaders of the then New Korea Party, Cheong Wa Dae officials and high-ranking officials of the NSP. But the prosecutors said they have yet to secure evidence enough to release names.

It seems that Rep. Kang and Kim Ki-Sup, now under custody, have the key to identifying who they are. But Kim Ki-Sup has been keeping silent, while Rep. Kang appear determined not to comply with the summons. So it is not uncertain if the investigation can proceed further.

Shin Suk-Ho kyle@donga.com