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 wha
t 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.
As they stood before the court to hear the announcement of their sentences, Chun and Roh, two old friends and military academy classmates who had become estranged after one succeeded the other in the presidency, linked their fingers in a public gesture of solidarity.
On December 16, 1996, the Seoul High Court commuted Chun’s sentence to life imprisonment and reduced Roh’s to seventeen years. The court also reduced the sentences of all the other military and civilian defendants. It acquitted two of the chaebol leaders who had been convicted earlier and suspended the sentences of the other big businessmen. Under the ruling, none of the tycoons who contributed the funds were sent to jail.
A year later, in the Christmas season of 1997, President Kim Young Sam pardoned Chun and Roh, who returned quietly to private life.
SUMMIT DIPLOMACY AND THE FOUR-PARTY PROPOSAL
As had been the case with the last three South Korean leaders, summit diplomacy with the American president was important to the domestic standing of President Kim Young Sam, a fact that contributed to Washington’s leverage in South Korea. In the summer of 1995 and the spring of 1996, the United States sought to use this leverage on North-South issues. Its efforts had mixed success.
President Kim was planning a visit to the US capital in July 1995 to participate in the dedication of a monument on the Washington Mall to American veterans of the Korean War. Although President Clinton had visited Kim for two days in July 1993 and had hosted him in a three-day official visit in November 1993, including the Clintons’ first big White House dinner for a foreign guest, Kim was eager to turn the mid-1995 trip into an important visit with even more protocol honors. The US administration told Kim this could be done only if there was a substantive move toward accommodation or peace on the divided peninsula to justify a further allocation of Clinton’s time and attention.
In response, the ROK Foreign Ministry devised a “two plus two” formula, whereby the two Koreas would negotiate a permanent peace treaty to replace the Korean War armistice, with the United States and China acting as facilitators and eventual guarantors. The State Department welcomed the proposal as a step in the right direction if it were serious and well prepared, and if Washington were kept informed of what was happening.
The “two plus two” proposal, while still confidential, was enough to obtain the recognition Kim wanted. He was granted a four-day state visit with full honors, including an address to a joint session of Congress. In a conversation at the White House during the visit in late July, Kim looked Clinton in the eye and told him, “We are going to do this on August 15,” the fiftieth anniversary of Korea’s liberation from Japan and a day for important pronouncements in Seoul. Kim’s aides leaked the proposal to the South Korean press, and the ROK president himself said in an interview with CNN that he planned to make “a refreshing and important initiative towards North Korea” on Liberation Day. Based on Kim’s assurance, Secretary of State Warren Christopher took up the proposal with Chinese foreign minister Qian Qichen in a bilateral meeting in Brunei.
After returning to Seoul, however, Kim executed another of his sudden reversals in the face of the conservative political tide following North Korea’s interference with ROK ships delivering rice to DPRK ports. Without consultation with or notification of the United States, Kim scuttled the initiative he had proposed to Clinton. American diplomats were not pleased.
In the spring of 1996, summit diplomacy reappeared when Clinton planned a state visit to Japan. At this point the US administration was increasingly apprehensive about the reports of privation and instability in North Korea and unhappy with Kim’s inconsistent and, lately, unresponsive policies. Although American presidents usually stopped in Korea when visiting Japan, Clinton was not inclined to do so this time. Considering Clinton’s earlier visit to Seoul and Kim’s two visits to Washington, “we thought we’d done enough” for Kim, said an administration official who was involved in the internal discussions. No stop in Korea was planned.
Kim, however, had different ideas. Clinton’s schedule would bring him to Japan on April 16, just five days after the nationwide National Assembly elections in Korea that would have a crucial bearing on Kim’s authority in his last two years in office. For it to be known in the campaign period that Clinton would visit Japan but bypass Korea would suggest low regard for Kim; indeed, there were reports in Seoul that the president’s longtime rival, opposition l
eader Kim Dae Jung, was preparing to make the omission an issue. The ROK president was desperate to persuade Clinton to change his mind.
In a repeat of the previous year’s discussions, Ambassador Laney, who was gravely concerned about the lack of movement in North-South diplomacy, told the Blue House that Clinton could spare the time for a visit only if a serious peace initiative were to come out of it. Talks between Clinton’s national security adviser, Anthony Lake, and his Korean counterpart, Yoo Chong Ha, produced agreement in principle for the two presidents to undertake and announce such an initiative. The details were worked out in person during a trip by Lake to Cheju-do, where he was very well received by Yoo and his deputy, Yu Myung-hwan, and by long distance, in great secrecy, using the telephone instead of cables to bypass the established bureaucracy and other potential sources of leaks.
Kim got his meeting at 5:50 A.M. on April 16, 1996, when Air Force One touched down at Cheju Island, off the southern end of the Korean peninsula. Five days earlier, Kim’s party had won a commanding position in the National Assembly elections, due in part to the curiously timed North Korean military incursions in the DMZ. After taking an early-morning walk through a garden of bright-yellow flowers, Clinton and Kim settled down to discussions in the same hotel suite where Presidents Roh Tae Woo and Mikhail Gorbachev had met in April 1991.
The Two Koreas: A Contemporary History Page 45