Ex-Finance Chair Named in Bribe Case

Investigating suspicions against the president of Samju Industrial Co. Kim Heung-joo (58, in custody) for lobbying, Criminal Department IV of the Seoul Western District Public Prosecutors’ Office reportedly discovered clues on January 7 that imply Lee Keun-young (70), former chairman of the Korea Financial Supervisory Commission, received a request from president Kim and made his subordinate help Kim acquire Gold Mutual Savings Bank.

On the same day, the Prosecutors’ Office seized and searched the office and home of Kim Jung-hoe (58), the deputy governor of the Financial Security Service whose arrest warrant had been issued on January 6 under charges of introducing president Kim to Yoo, former president of the GMSB, and receiving bribes up to 230 million won.

Deputy governor Kim, who was a director at the FSS back in March 2001, testified, “After receiving a phone call from Lee Keun-young, who was heading the organization then, I met Kim Heung-joo in order to take care of the problems of a faltering mutual savings bank, and never received money for that.”

In a phone call with our newspaper, Lee Keun-young said, “President Kim, who is a nephew of my friend, visited my office and told me that he wanted to acquire the bank. So I introduced him to the department head in charge. There were lots of insolvent mutual savings banks back then and it was considered virtuous to introduce and connect people showing interest in acquisition to those concerned.”

“At that time, I thought it was a good way to save public fund and minimize civil appeals. I didn’t take any money while doing it,” added Lee.

On January 8, the court will make its decision whether to issue arrest warrants for deputy governor Kim and Shin, former head of the Gwangju branch of the FSS.

The Prosecutors’ Office has also found circumstantial evidence that Kim Heung-joo organized a group named “Circle of Brethren Practicing Love” which includes influential political and governmental figures during the Kim Dae-jung administration. It seems that he used the ties developed in this group for his business and the Prosecutors’ Office is taking further steps to investigate this. It has been reported that political figures from the ruling and opposition parties in addition to high-ranking officials from the National Tax Service, Board of Audit and Inspection, Prime Minister’s Secretariat, FSS and the Public Prosecutors’ Office were in this circle.

turtle@donga.com