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S. Korea's Kim Accused of Taking Payoffs, Keeps Mum : Asia: President sets meetin with party leaders on predecessor's confession that he amassed enormous slush fund. Scandal widens.

October 29, 1995|SAM JAMESON | TIMES STAFF WRITER

SEOUL — Returning to a nation stunned by a former president's confession that he "governed" with a $653-million slush fund, South Korean President Kim Young Sam refused to comment Saturday on accusations that he received some of the secret money.

"We don't feel we have to disclose the sources of the campaign funds" that Kim used to get elected in 1992, a spokesman for Kim's ruling Democratic Liberal Party told a news conference.

Another ruling party leader said Kim will decide whether to disclose details of his campaign funds after prosecutors conclude investigations into illicit funds that former President Roh Tae Woo said he amassed while in office.

At the airport, Kim spoke only of South Korea's growing international stature before being whisked away. He scheduled a meeting with party leaders Monday to discuss both his two-week trip, to Canada and the United Nations, and Roh's tearful television confession and apology Friday.

Earlier, during a stop in Honolulu, Kim said that a pledge he made to refrain from accepting any political contributions after taking office should prove to voters that he has remained uncorrupted.

Already, Kim Dae Jung, who has run three times as a presidential candidate and is the nation's most famous foe of past authoritarian rule, has acknowledged accepting a Roh gift of $2.6 million. And Saturday, despite a lack of hard evidence, new accusations were made against Roh's wife, Kim Ok Sook.

KBS, the government radio and television network, reported that Kim Ok Sook built up her own slush fund with contributions from the wives of chairmen of the nation's business conglomerates. Her fund amounted to at least $261 million and it is believed she still holds it, KBS said.

Roh's wife met with between three and six of the wives each month and received a minimum of $130,000 from each of them each time, KBS said.

South Korean media reported that prosecutors plan to summon Roh for questioning within a few days and may decide to make him the first former president ever arrested--on charges of bribery and violation of a political funds law. Prosecutors also reportedly plan to take legal steps to confiscate the $222 million that Roh said he still holds as a leftover from his presidential slush fund.

Whom the broadening scandal will hurt most remains unclear. Even how the scandal erupted is cloaked in mystery.

In August, when a minister in Kim's Cabinet accused Roh of having amassed an illicit treasure chest as president, Kim fired the minister and discouraged any investigation of the charges. But when Park Kye Young, a member of the opposition Democratic Party, made a similar charge Oct. 19, Kim ordered a full investigation.

Prosecutors' revelations of a series of hidden bank accounts held by Roh pressured the former president to make his televised confession and apologize to the people in the hope of avoiding arrest, opposition legislators charged.

On Saturday, they claimed that Kim's agents were feeding information to Park with the aim of using him to discredit not only Roh but all older-generation politicians, especially Kim Dae Jung, President Kim's principal rival for the last quarter of a century.

Roh's confession that he still holds $222 million from the slush fund brought renewed criticism of South Korea's banking community.

Kang Sok Hoon, senior researcher at Daewoo Economic Research Institute, urged the National Assembly to make it illegal for "banks to seek deposits from illegal money and to prohibit banks from providing false names" to help customers open secret accounts.

Although President Kim carried out a reform in 1993 that was supposed to halt concealment of the identity of account holders, the practice remains widespread. Roh is believed to have used fake names to conceal hundreds of bank accounts and records of ownership of real estate, stocks and bonds.

"We should refrain from overheated competition to induce deposits. Banks should be reborn as institutions for ordinary people, not for powerful people," said Park Tong Hoon, planning section chief at Korea Commercial Bank.

Ahn Kang Min of the prosecutor's central investigative department said South Korea was studying whether to ask Switzerland to determine whether Roh held any secret accounts there.

On Saturday, prosecutors announced they had uncovered three more secret Roh bank accounts, bringing to $150 million the amount of slush funds they have located. They identified the Donghwa Bank as having $107 million worth of Roh's funds hidden in accounts there.

Korean media also published a series of analytical articles purporting to show how the president of a country where bribes are considered essential to win contracts or permits from the government theoretically had endless opportunities to receive bribes.

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