Hong-up Asked for Tax Reduction

Prosecutors found on the 1st that Kim Hong-up, vice chairman of the Peace Foundation for the Asia Pacific Region asked Ahn Jung-nam, former director of the National Tax Service (NTS) and other high-ranking NTS officials for tax reduction and began investigating the circumstances of the case.

Prosecutors also confirmed that in 1999, Hong-up personally asked Lee Hyeong-taek, former managing director of the Korea Deposit Insurance Corporation (KDIC) for a prompt court protection applied by a construction company. Hong-up was asked for a favor from the chairman of the construction company via Kim Sung-hwan, his high school alumnus.

The prosecution said that a related person testified that Hong-up personally asked Ahn to interfere in the special NTS audit of a company at the request of the president of the company in November 2000. The prosecution is grilling Hong-up on this corruption case and another corruption case, in which he allegedly asked to select a CEO of a company as an exemplary tax payer in Feb. 2000.

The prosecution, however, sees a possibility that Hong-up asked for favor not to Ahn but to other high-ranking NTS officials.

Prosecutors said that Lee after being asked from Hong-up ordered a KDIC staff member, who worked at a creditor bank of the construction company, to approve the company`s court protection.

Regarding the suspicion on the fund collected by Oh Si-deok, former president of the Korea National Housing Corporation, prosecutors decided to summon a former administrator of the presidential secretarial office, who received a phone call from Hong-up.

The prosecution is considering calling in senior prosecutors to question whether they peddled influence at the request of Hong-up or other prosecutors concerning 3 other cases in which high-ranking prosecutors were asked for a favor from Kim Sung-hwan.

In the meantime, the prosecution indited Yoo Jin-gul, Hong-up`s college alumnus for taking 300 million won in addition to one billion won he and Kim Sung-hwan received from the construction company.

Sang-Rok Lee myzodan@donga.com