Prosecution May Summon Ex-President Over Slush Funds
By Byun Duk-kun
Staff Reporter
Chun Jae-yong, the second son of former President Chun Doo-hwan, is likely to face criminal charges, including tax evasion, as he has allegedly kept more than 13 billion won in a secret fund.
The Supreme Public Prosecutors’ Office on Thursday summoned Chun to verify the source of the fund he had kept in secret bank accounts.
The state prosecution has launched an investigation into the case after allegations surfaced that Jae-yong inherited part of his father’s slush funds, which were stashed away during the ex-president’s term in the 1980s.
The junior Chun argued that the money was donated by his grandfather, on his mother’s side, Lee Kyu-dong who served as head of Korea People, a civic organization for the elderly.
The prosecution dismissed the claim by the junior Chun and said they were still trying to verify whether the money came from his father.
``It is hard to believe his testimony that Lee Kyu-dong gave him the money,’’ said Moon Hyo-nam, investigation planner at the Central Investigation Department of the Supreme Prosecutors’ Office. ``We will continue our investigation on Chun Jae-yong until late evening and then decide what we will do about his custody,’’ he added.
The former president, who gained his power through a military coup in 1979 after his mentor and military dictator Park Chung-hee was assassinated, was convicted of mutiny and treason in 1993 as well as bribery and embezzlement charges for collecting more than 220 billion won ($183 million) in illegal corporate donations from the nation’s large conglomerates.
Chun was ordered to repay the entire amount of secret funds he had stashed. The former president has only paid some 31.4 billion won so far, and the prosecution has been unable to trace the rest of his 200-billion-won secret fund.
The prosecution has decided to seize the entire amount of money controlled by Jae-yong if they confirm that the money came from the former president’s secret funds. If that happens, the prosecution may also summon the former president to find out whereabouts of the rest of the funds, a prosecution source said.
The prosecution, however, dismissed an allegation that part of the secret fund operated by Jae-yong was funneled to President Roh Moo-hyun’s campaign team ahead of the 2002 presidential election. Representative Hong Jun-pyo of the main opposition Grand National Party had argued on Jan. 16 that part of Jae-yong’s funds made its way into campaign coffers of Roh, who was then running for the Millennium Democratic Party. The prosecution said they have found no evidence to support that allegation.
Jae-yong was first suspected of managing some 10 billion won of his father’s illegal funds. The prosecution has seized some 4.7 billion won of the 10 billion won fund operated by the junior Chun.
The prosecution also said they have found more than 3 billion won of additional funds operated by the former president’s son. Jae-yong allegedly bought three luxurious apartments in Itaewon, which cost 1.6 billion won each, according to the prosecution.
The prosecution has also decided to confiscate the apartments if the money is found to have come from his father’s secret funds, which they suspect to be kept under hundreds of secret bank accounts or in unregistered bonds.
``We still need to trace more bank accounts to find out the source of the suspicious funds,’’ Moon said.
The senior prosecutor said they have yet to confirm the source of the money. ``There is no real evidence yet to show former president Chun’s involvement with the suspicious funds.’’
Sources said the prosecution is considering indicting the former president’s son regardless of its findings on the source of the money.
The prosecution argued Jae-yong could not have come up with a 13-billion-won investment fund on his own.
The prosecution may still indict him on charges of evading donation taxes even if they fail to find out whether the money came from his father or anyone else, the prosecution said.
benjamine@koreatimes.co.kr
