Samsung Employee in Hiding As Illegal Bond Buy Investigation Is Anticipated

It was confirmed on August 10 that Choi, a Samsung employee involved in Samsung’s purchase of bonds worth 80 billion won, returned Korea on May 20. The prosecution launched an investigation to track the money to its source last year to find out the truth about the questions surrounding the presidential election funds in 2002. Its attempts failed, and the entire investigation came to a stop.

Choi is known to have moved his residency and gone into hiding after returning.

The prosecution has said that it would reopen the investigation into the matter if Choi were back in Korea. So the next move of the investigative authorities is closely watched.

Case Summary–

The Central Investigation Department of the Supreme Public Prosecutor’s Office (SPO) has been carrying out a probe into presidential election funding for about six months since November 2003. Over the course of the investigation, the SPO discovered that Samsung bought bonds worth about 80 billion won between 2000 and 2002.

The prosecution verified that about 30.2 billion out of the 80 billion won was funneled into the Grand National Party and others, but could not find out how the rest was used.

Samsung told the prosecution that Chairman Lee Kun-hee personally financed the purchase. The SPO was not able to disprove Samsung’s claim and decided to end the probe, judging that it was hard to continue the investigation when Choi and Kim, the Samsung employees who were in charge of the buying of bonds, were staying overseas.

Kim is thought to have left Korea in May 2003, and Choi left in January last year just before the prosecution took up the investigation into Samsung’s buying bonds. Absent the reference persons, the prosecution brought the case to a halt and ordered that their entry into Korea be reported to the authorities.

Then Central Investigation Department head Ahn Dae-hee said in an announcement of the investigation results, “If we are to be reasonably confident about what we know about the purchase of bonds, we need to ask Choi and Kim questions. They are staying overseas so we are not able to reach them. If they come back, we will reopen the investigation.”

The Point of Choi’s Departure –

Choi’s sudden departure in January last year raised questions since it was right before the time the Central Investigation Department of the SPO set up an inquiry into Samsung’s buying bonds. At that time, those in and out of the prosecution suspected that Samsung hid Choi away to another country because he knew secrets, including where the money used to buy bonds came from.

Choi came back on May 20, a week later Lee Hak-soo, president of Samsung’s Reformation Headquarters, was granted a special pardon on May 13.

Inaction or Inability to Reopen the Case –

The prosecution said that it is not able to reopen the investigation because the whereabouts of Mr. Choi are not known.

An insider with the SPO explained, “We don’t know where Choi is. Even if we find him, he is a reference person, not a suspect. So we cannot force him to appear.”

Some point out that the prosecution is being passive in carrying out the investigation.

A lawyer and former prosecutor said, “The law doesn’t necessarily ensure that a reference person cooperates with the probe, but once you are determined to make him cooperate, there are some ways.”

Fallout From the X-File Investigation? –

Choi’s arrival became known at a time when the prosecution is being put in an uncomfortable relationship with Samsung over the case of illegal wiretapping by the Agency for National Security Planning. The SPO has yet to decide on whether to start an inquiry into the illegal tapping. The recorded tapes have showed that Samsung offered substantial financing to politicians in 1997 just before the presidential election.

Under the circumstances, the prosecution will likely come under fire if it shows signs of hesitation in conducting the probe into Choi’s case, a key to answering questions about Samsung’s purchase of bonds worth 80 billion won.

Some observe that the prosecution might be forced by public opinion into starting an investigation into the illicitly recorded conversation.

Jin-Young Hwang buddy@donga.com