Criminal Prosecution of Those Involved in Corruption and Slush Fund Scandals Will Begin Early Next Month

Prosecutor Ahn Dae-hee of the Supreme Public Prosecutors’ Office (SPPO) announced yesterday that proceedings for the criminal prosecution of the corporate and political figures suspected of involvement in the SK and Hyundai slush fund scandals as well as corruption scandals surrounding the president will begin early next month.

It is expected that among the main targets of criminal prosecution will be SK Group chairman Son Gil-seoung, who was involved in handing over 100 billion won in slush funds to the Grand National Party (GNP), GNP lawmaker Choi Don-woong, who accepted the funds from SK, and former Changsoochun representative Son Bong-sul, who received 2.3 billion of the 11 billion won SK gave to former presidential secretary Choi Do-sul.

The prosecutors also said that if evidence pointing to attempts to expand ownership or inheritance of shares to strengthen control over companies is confirmed, investigation of that matter will be pursued.

The SPPO said that most of the major chaebol (conglomerate) heads, including LG Group chairman Koo Bon-moo, will be summoned by next week to be investigated for their involvement in providing illegal slush funds to presidential campaigns. In the meantime, the SPPO plans to conduct additional searches of companies if more evidence is found indicating that they made illegal contributions to presidential election funds.

The SPPO has also uncovered evidence that the GNP and Millennium Democratic Party (MDP) opened several borrowed bank accounts to manage the presidential election funds they received from companies, and prosecutors are at present thoroughly tracing the details of the deposits and withdrawals of these accounts.

Prosecutor Ahn said regarding the investigation over the presidential election funds, “By next week, the outline of the presidential election fund investigation will take its form and we plan intense investigations into the matter through Christmas.”

Prosecutors suspect that the 3 billion won that Cheil Industries president Ahn Bok-hyun and two other current or former Samsung-affiliated company presidents contributed to the MDP during the presidential election were from company, not personal, funds. The contribution checks are being traced to investigate the possibility that these may in fact have been slush funds.

Furthermore, evidence of money laundering by SK and other conglomerates via the conversion of huge sums of money into old one million won checks, which were then passed through large jewelry shops and handed over as illegal presidential election funds, has been found and is currently being traced.

In regard to the presidential aide corruption scandals, the source of the 9.5 billion won that Son allegedly received from Pusan Changsin Textile Co. chairman Kang Kum-won is currently being investigated.

Tae-Hoon Lee Jin-Kyun Kil jefflee@donga.com leon@donga.com