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Ministry Calls Off Fund Investigation

Posted December. 06, 2006 06:57,   


The Ministry of Unification submitted a written investigation request to the prosecution last month for issuing false documents to receive a grant from the Inter-Korean Economic Cooperation Fund. However, the ministry later retrieved the document, sources confirmed on Tuesday.

According to the Ministry of Unification and two officials of a relief organization that provides humanitarian aid to the North, the A aid group remitted 470 million won ($ 0.47 million) into an account of the B company, a handcart manufacturer, ostensibly to purchase 12,000 carts, but withdrew all the money upon submitting a bank statement to the ministry, raising suspicions.

The A organization was keeping the bankbook and the seal of the account from the B manufacturer, saying it would pay the money for the carts.

The Ministry of Unification granted 240 million won for the A organization under a matching fund system that determines the amount of grants based on the amount of money local private relief organizations raised.

If the allegation is true, the A organization received the grant by pretending to have paid contributions to the B manufacturer.

“An accountant remitted the 470 million won and then withdrew it from the account without permission. He was later fired because of it,” a senior official of the A organization said during a telephone interview with Dong-A Ilbo.

The Ministry of Unification submitted an investigation request in which the organization’s suspicious activities were summarized on November 29, but it took the document back on the same day, prosecutors said.

Meanwhile, some officials of the Unification Ministry argue that the ministry might have changed its decision on the case because high-ranking officials are concerned about a budget cut of the Inter-Korean Cooperation Fund, which is being reviewed at the National Assembly.

“Working level officials of the ministry wanted to request an investigation. However, (high ranking officials) changed their decision, saying the A organization should be further questioned about the circumstances,” an official of the ministry said.

“Since the B manufacturer decided to donate handcarts, there is nothing wrong with receiving the fund in accordance with (the matching fund system.),” a senior official of the A organization said.

However, the president of the B manufacturer said he has never mentioned about donation and received only a portion of the money for the carts.

The A organization sent 12,000 handcarts to North Korea in January 2006 and paid the 240 million won of the fund it received from the ministry along with additional 100 million won it had raised. However, the B manufacturer claims that the bill for the carts exceeds 600 million.

While the A organization filed a lawsuit against the president of the B manufacturer on November 15 on charges of making false allegations, the B manufacturer has been collecting information on more of similar fraud cases.

weappon@donga.com jefflee@donga.com