Probe confirms `aid' payment to Pyongyang

PRICE OF PEACE: A 70-day investigation did not find former president Kim Dae-jung culpable for the US$100m payment that was allegedly made via `improper' channels


Thu, Jun 26, 2003 - Page 5

Former South Korean president Kim Dae-jung's government secretly paid communist North Korea US$100 million to get Pyongyang to agree to a historic summit in 2000 that helped Kim win the Nobel Peace Prize, an investigator said yesterday.

Independent counsel Song Doo-hwan did not characterize the cash transfer as a payoff for the inter-Korean summit, but he said the government "aid" for communist North Korea was related to the meeting and had been sent secretly through improper channels.

Kim has admitted approving money transfers to North Korea despite "legal problems," but has said they were for the sake of peace and that his government's decision should not be subject to review.

Song had agreed not to consider whether the president himself was culpable. However, three of Kim's former aides have been arrested in the scandal.

Announcing the findings of a 70-day probe, Song said South Korea's Hyundai conglomerate sent US$500 million to North Korea, but he called US$400 million of that an investment by the company. The rest was sent by the government, via Hyundai, he said.

All of the money was sent to Pyongyang through Hyundai subsidiaries shortly before the June 2000 summit, Kim's crowning achievement that helped him win the peace prize, Song said.

"We viewed the money Hyundai sent to North Korea as advance business investment," Song told a nationally televised news conference. "The US$100 million the government sent to the North through Hyundai is characterized as a politically motivated government aid for the North."

Song accused Kim's government of "active involvement in the transfers of the money, keeping them secret from the people and failing to go through a justifiable procedure for sending the money."

"Thus we concluded that it cannot be denied that the money transfers were related to the summit," Song said.

The former president, who left office in February after a five-year tenure, had earlier admitted that his government approved Hyundai's money transfers to North Korea -- despite "legal problems" -- because they "facilitated peace on the Korean Peninsula."

But Kim said his government's decision should not be subject to judicial reviews, and Song agreed not to question the former president.

Song said Wednesday he has been careful to ensure that his investigation would not interrupt South Korea's efforts to seek reconciliation with the North after decades of Cold War animosity following the 1950-53 Korean War.

The investigation began when opposition leaders accused Kim's administration of paying bribes to the North to agree to the summit.

Hyundai says it gave the money to the North to secure business rights there covering tourism, railways and an industrial park.

Song had earlier arrested three of Kim's former aides on charges of persuading state-run Korea Development Bank to extend loans to the cash-strapped Hyundai, which then sent the money to the North.

One of them, Kim's former chief of staff Park Ji-won, was also accused of taking US$12.5 million in bribes from Hyundai.

By law, a special counsel is appointed by the president after the National Assembly passes a law calling for an independent investigation into a politically sensitive case.

Relations on the Korean Peninsula improved vastly immediately after the summit. But they deteriorated in Kim's final year, especially after the US said last October that North Korea admitted running a secret nuclear weapons program. The peninsula was divided in 1945.