The Two Koreas: A Contemporary History (61 page)

Equally curious were two unpublicized developments late in 1995. In the early fall, the Korean People’s Army Sixth Corps, in the northeastern part of the country, was disbanded, its leadership purged, and its units submerged into others, under circumstances suggesting disarray in the ranks. Moreover, in early December the KPA suddenly halted its annual winter military maneuvers two months before their normal conclusion and embarked on new ideological education instead. This appeared to reflect a scarcity of resources even for top-priority military missions as well as problems of indoctrination and discipline.

During my trip to Pyongyang in early 1995, North Korean officials had spoken repeatedly of their long-standing dissatisfaction with the Korean War armistice and of their proposal to replace it with a US-DPRK “peace insuring system.” Our delegation had been warned, as had others, that “unilateral steps” would be taken if there were no movement toward negotiations on the issue—and there had been no movement.

The greatest mystery in April 1995 was not what the KPA forces had done in the DMZ—clearly a demonstration that was intended to call attention to their demands—but how Pyongyang’s leaders had calculated or tolerated the strange timing. Coming just as the DPRK government was appealing to the world anew for urgently needed food, the military actions made it more difficult to obtain. In another anomaly of timing, the incursions came less than a week before a new set of nationwide elections in South Korea, this time for seats in the National Assembly. The ruling party, which had been expected to do poorly because of the growing unpopularity of President Kim, did much better than expected, due in part to public alarm over the DMZ incursions, which were heavily covered by South Korean media. Political experts in Seoul said that Kim’s party probably won twenty to thirty seats as a result of the DMZ incidents—a crucial margin in assuring Kim legislative control. Twenty-eight percent of those questioned in a postelection poll said the incursions influenced their vote in favor of the ruling party.

The damaging lack of coordination of economic, political, and military objectives in the DMZ incursions was important evidence of Kim Jong Il’s governing style. According to a South Korean intelligence official, the reclusive leader was “governing by memorandum,” accepting separate reports, and making separate decisions in connection with the various functional
groups constituting the North Korean party and governmental apparatus. Unlike his father, Kim Jong Il was reported to have little taste for official meetings at which a more coherent policy could have been thrashed out. With the death of Kim Il Sung, according to Adrian Buzo, an Australian academic and former diplomat, a transfer of power had taken place from an individual to a system. And the system was not working.

POLITICAL EARTHQUAKE IN SEOUL

High school ties are cherished in South Korea, and high school alumni meetings are important celebrations. Such a meeting, in the Crystal Ballroom of the Lotte Hotel, on October 16, 1995, was the occasion for an unplanned encounter that touched off an earthshaking political scandal, uncovering a system of payoffs that had undergirded South Korean politics for decades. The political earthquake made the ROK’s democracy more responsive to public opinion and thereby less controllable by the central government, affecting and often complicating the government’s dealings with the United States and with the North.

One of the celebrants at the school reunion, a businessman named Ha Chong Uk, was desperately worried about a problem involving money and politics, and he approached a fellow alumnus, Park Kye Dong, with his predicament. Park was a National Assemblyman, and Ha hoped he could get some big shots in government to fix his problem.

The problem dated from February 1993, as President Roh Tae Woo was leaving office. Ha, in a small family business with his father as brokers for shipping companies, received a strange request from the local branch of the Shinhan Bank, where his firm did business. The bank manager asked permission to deposit 11 billion won (about $14 million) of someone else’s money in an account using the father’s name. Because of favors owed to the bank, Ha agreed. There things remained until, in August 1993, in one of the most important of his domestic reforms, President Kim Young Sam decreed a “real name” bank-deposit system, under which fictitious or borrowed names on bank accounts could no longer be used to hide or launder money for illegal political purposes or other shady dealings. The next step was a new tax system, to begin in January 1996, when taxes would be assessed on interest earned from all bank accounts.

At that point, businessman Ha had a serious problem. He had learned that the money deposited under his father’s name actually belonged to former president Roh—yet his father would soon be liable for paying nearly $1 million in taxes on the accumulated interest. He couldn’t pay it, and even if the money to pay the taxes magically appeared, Ha feared a tax audit—and the need to explain how a small businessman had obtained so much money. Moreover, he learned that his father’s account was one
of three borrowed-name accounts at the same bank branch hiding money belonging to the former president.

Assemblyman Park, a member of the opposition Democratic Party, had long opposed the pervasive influence of illegal money in Korean politics. His indignation had been rekindled two months earlier when a government minister had told reporters that a former—unnamed—president had hidden 400 billion won ($500 million) in accounts at city banks, only to be fired for his indiscretion. Park got from Ha a statement of the status of the account, but instead of taking it to be “fixed,” he rose on the floor of the National Assembly and delivered a bombshell accusation. Roh, he declared, had deposited the equivalent of $500 million in city banks around the time he left office, with 30 billion won ($37 million) deposited in the bank branch where Ha had his account. He then produced Ha’s bank documents as evidence.

The day the furor broke out, Roh Tae Woo’s longtime chief bodyguard and his last intelligence agency director, Lee Hyun Woo, hurried to see the former president at his home in Seoul. Lee informed his boss that the money being discussed in the National Assembly indeed belonged to Roh—part of the funds that Lee had been managing since the two men had left government. Roh instructed Lee to report the facts to prosecutors but before doing so to destroy the account books containing the details of the contributors.

Eight days after the revelation in the National Assembly, via television from his home, Roh addressed the nation. The former president announced that while in office he had amassed a “governing fund” of 500 billion won ($625 million), an even more stupefying total than had been rumored, and that he had left office with 170 billion won ($212 million) of the money. (The amount was soon corrected to 185 billion won.)

Saying that raising and using such funds was “an old political practice,” Roh declared it to be wrong and said, “I will wholeheartedly accept any kind of punishment you hand out to me.” Roh said he hoped that nobody else, including the entrepreneurs who contributed the funds, would be hurt because of his misdeeds. Wiping tears from his eyes, he ended the broadcast by saying, “I have no other words to say as a man who has deeply hurt the pride of the nation. At this moment, I feel deeply ashamed of being a former president. I offer my apology again.”

The gigantic size of the funds involved as well as Roh’s retention of massive wealth after leaving office shocked the public. His admissions were in startling contrast to his declarations of the late 1980s to create “a great era of ordinary people” after coming into office a hero for submitting to election by popular vote. Korean newspapers recalled that in his first presidential press conference, Roh had pledged to eliminate all forms of corruption and “to be recorded in history as a faithful and honest president.”
His declared assets on assuming the presidency had been about 500 million won ($625,000), one-thousandth of the slush fund he admitted to raising in office. Several weeks after his mea culpa statement, a public opinion poll in Seoul identified Roh as “the most loathsome politician” in the country by an overwhelming margin.

The same day as Roh’s revelations, opposition leader Kim Dae Jung announced that he had secretly accepted 2 billion won ($2.5 million) from Roh as a gift during the 1992 presidential campaign. This admission tarnished Kim’s reformist image, but also raised immediate questions about how much money had gone to incumbent President Kim Young Sam, who had been the candidate of Roh’s ruling party in the 1992 race. In making his startling admission, Kim Dae Jung charged that the incumbent president had received much more than he, “hundreds of billions of won,” for his well-heeled race. President Kim denied receiving any money personally, but he did not deny that his ruling-party campaign might have received funds from Roh, in amounts that were not established or announced.

Roh was summoned by the prosecutors on November 15 and jailed on corruption charges the following day. Prosecutors soon extended their investigation to his predecessor Chun, who refused to cooperate and, like Roh, destroyed the account books of his contributors. According to prosecutors, Chun collected 950 billion won ($1.8 billion) in slush funds—nearly twice as much as Roh—and left office with 212 billion won ($265 million). Chun later claimed in court that as president, he gave 197 billion won to Roh for his 1987 election campaign. An aide testified he and the wives of both men were present when Chun personally handed over much of the money.

In their investigation, prosecutors discovered hundreds of stacks of 10,000-won notes belonging to Chun, totaling 6.1 billion won, stuffed into twenty-five apple boxes in the cement warehouse of the Ssangyong group, a Seoul conglomerate. Photographs of this mother lode of currency, appearing prominently in Korean media, disgusted the public.

Almost all the funds had come from leaders of Korea’s big enterprises. The executives had been called to meetings with Roh on a regular basis and were expected to bring money. They insisted the payments were simply the cost of doing business in Korea, where presidents and their administrations were all-powerful arbiters of tax policy, loan funds, public contracts, and much more.

Furthermore, they all knew what had happened to the Kukje group, which had been one of South Korea’s largest conglomerates in the early 1980s. The Kukje chairman recalled how then-president Chun suggested he give $2.6 million to one of the first lady’s favorite charities. After the businessman declined, his bank credit was cut off at Blue House orders,
and the finance minister announced that Kukje was being dissolved because of insufficient financial backing—all of which quickly led to the firm’s bankruptcy. Few tycoons were ready to risk such treatment.

In one of the rare specific revelations prior to the 1995 scandal, when Hyundai group founder Chung Ju Yung visited Washington in September 1992 as a maverick presidential candidate, he told me and other
Washington Post
editors and reporters that Roh was even more corrupt than Chun Doo Hwan had been. I found this hard to believe at the time and, to my regret, did not report this remark in my story on the meeting or press the industrialist for details.

As the furor following Roh’s arrest continued, and with his own 1992 campaign suspected of accepting Roh’s money, President Kim Young Sam came under pressure for stronger action. Earlier, Kim had taken the position that the December 12, 1979, military-backed takeover by Chun and Roh and the May 1980 killing of civilians in Kwangju did not warrant prosecution but should be left to “the judgment of history.” After the scandal broke, Kim abruptly reversed his stand, and a special law authorizing legal action against those responsible for both incidents sailed through the National Assembly.

Even before passage of the law, Chun was arrested and jailed when he defiantly refused a summons from the prosecutors to appear for questioning. Chun’s lawyers argued that his arrest was unconstitutional because the constitution forbade retroactive statutes. Five of the nine members of the Constitutional Court agreed, but the legal action stood because six justices were required to overturn a statute.

From March until August 1996, the Korean public watched a regular spectacle of the two former presidents being taken before the court from their cells in loose-fitting prison uniforms and rubber shoes to respond to charges of bribery, insurrection, and treason. Prisoner number 1042, former president Roh, adjusted quickly to prison life, continuing to express remorse and apologies but shedding little new light on matters. Prisoner number 3124, former president Chun, was defiant. Shortly after his arrest, he had protested by going on a hunger strike—an ironic counterpoint to a hunger strike against Chun by then–opposition leader Kim Young Sam in 1983—and persistently challenged the court’s right to put him on trial for long-ago events.

On August 26, both former presidents were found guilty by the three-judge court. Chun was sentenced to death. He flinched on hearing the judgment before quickly regaining his composure. The court noted Chun’s argument that while president he had contributed to the stabilizing of the economy and turned over power to his successor by peaceful means, but it said these acts could not offset his serious crimes. Roh was sentenced to twenty-two and a half years in prison, rather than life imprisonment as
requested by the prosecutors. The court said it took into account Roh’s “achievements in northern diplomacy and the nation’s admission into the United Nations,” as well as the fact that he had been popularly elected in 1987.

The other defendants—former officials, businessmen, and fourteen retired military officers, eight of whom had left the service with four stars—received lesser sentences. Many of the former generals were taken to jail cells from the courtroom to begin their prison time, but all the business leaders were released pending appeal or given suspended sentences on the grounds that the nation continued to need their best efforts.