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KOREA: Samsung chairman faces summons

Samsung Group chairman Lee Kun-hee is purported to be next figure in prosecution's investigation

The Korea Times
Tuesday, August 9, 2005
By Kim Tong-hyung

Seoul -- The prosecution Tuesday said it may call in Samsung Group chairman Lee Kun-hee for questioning over allegations the conglomerate provided illegal campaign funds to presidential candidates ahead of the 1997 election.

Investigators Tuesday summoned Samsung vice chairman Lee Hak-soo, widely considered the No. 2 man at the group, to confirm whether he was involved in the fund provision as revealed by audiotapes of conversation eavesdropped by the nation’s spy agency.

Korean Ambassador to the U.S. Hong Seok-hyun, the former publisher of Samsung-affiliated newspaper JoongAng Ilbo, resigned last month as his tapped conversation with Lee Hak-soo about the illegal campaign funds was reported by the media.

The prosecution is also considering whether to summon Hong for questioning.

As the wiretapping scandal erupted, People’s Solidarity for Participatory Democracy (PSPD) requested the prosecution investigate the three men and other former and current Samsung executives over their alleged corrupt ties with politicians.

Vice chairman Lee refused to comment on Samsung’s bribery allegations Tuesday as he entered at the Seoul Central Prosecutors’ Office in Socho-dong, southern Seoul.

"We are considering bringing in the Samsung executives, including Lee Kun-hee and Hong Seok-hyun, for questioning. However, nothing is confirmed as of yet, as we are still in the early stage of the investigation and haven’t decided on any detailed plans," said senior prosecutor Hwang Kyo-ahn, who leads the investigation.

The illegal funds surrounding Samsung first erupted last month, when local television station MBC reported the contents of wiretapped conversation between vice chairman Lee and Hong in 1997, which claimed that the two men discussed handing out illegal funds to two rival presidential candidates.

According to recovered transcripts of the audiotapes, Samsung offered about 10 billion won in illegal funds to Lee Hoi-chang, presidential candidate of then ruling Grand National Party (GNP) ahead of the 1997 elections.

The audiotapes obtained by the MBC were made by members of the spy agency’s illegal wiretapping unit, which snooped on high-profile businessmen and politicians.

Vice chairman Lee had been summoned by the prosecution in 2003 and was questioned over allegations that Samsung channeled tens of billions of won in illegal funds to presidential candidates during the 2002 elections. Prosecutors concluded that Samsung provided more than 38 billion won in illegal funds.

In the 2003, prosecutors did not summon chairman Lee, saying that they had no evidence he was directly involved in the campaign fund scandal.

For now, the prosecution said it will seek details on vice chairman Lee and Korean-American businessmen William Park, currently under arrest, who is accused of leaking the audiotapes to the media.

Park, who met Lee in 1999 at Samsung’s Seoul headquarters, is accused of using the audiotapes he obtained from former intelligence agents to blackmail Samsung executives for money.

Park handed over the audiotapes to a MBC reporter in December last year after his tactics failed.

But how far the prosecution will go in its investigation regarding Samsung’s provision of illegal campaign funds remains to be seen.

The prosecution had earlier shown reluctance in making public the content of the recovered audiotapes, admitting to the difficulty of using illegally obtained information as evidence.

Political parties and civic groups, including the PSPD which based their complaint on the contents of the audiotapes, have raised concerns that the prosecution’s stance could result in a failure to get to the bottom of the case.

If the prosecution decides to disclose the contents and use them as evidence, it becomes hard for investigators to avoid questioning chairman Lee, since the audiotapes contain conversations hinting at his direct involvement in the illegal activities, according to the transcripts.

Considering that the statue of limitations for embezzlement lasts 10 years under the law, there is a possibility that Lee could be prosecuted for allegedly appropriating company funds.

Separately, the prosecutors’ office said it is considering whether to conduct a search on the headquarters of the National Intelligence Service (NIS).

The NIS admitted last week that it illegally wiretapped the conversations of high-profile figures as recently as during the previous administration of Kim Dae-jung from 1998 to 2002.

Current NIS chief Kim Seung-kyu last week said the spy agency will fully cooperate with the prosecution’s investigation. The prosecution is expected to bring in the former directors of the spy agency to investigate past illegal operations, including current Uri Party lawmaker Chun Yong-taek who headed the agency in 2002.

Samsung alerted by news of Lee’s summons
By Na Jeong-ju

Seoul -- Samsung Group Tuesday held its collective breath over the news that Samsung chairman Lee Kun-hee may be subject to a summons by prosecutors in connection with the bugging scandal.

The group made no official statement over the case. Some officials said the group is cautiously watching the development of the scandal, but won’t react until authorities take steps to bring Samsung officials to court.

"We have few comments to give," a Samsung Group official said, after vice chairman Lee Hak-soo arrived at the prosecution office in Seoul for questioning in the afternoon. During the 1997 presidential race, Lee allegedly gave direct orders to Lee and South Korean ambassador to the United States Hong Seok-hyun, then-JoongAng Ilbo president, to provide illegal campaign funds to candidates.

"We hope for this scandal to end soon. If the case drags on, it’s not good for Samsung or the national economy," the official added.

On July 25, the nation’s largest conglomerate made a public apology for its link to the scandal. Lee has not made any comments.

"If the media reports are true, the prosecution has already hard evidence showing Lee’s role in Samsung’s illegal donation of political funds in 1997. We will wait and see how the prosecution deals with this," another Samsung official said.

The group has tried to cool down the scandal, with some officials raising questions over the motive of the tape disclosure. Some officials said it was not only Samsung Group that gave political funds during the presidential campaigns, and in this regard, the group should be treated equally with other conglomerates.

Last month, the People's Solidarity for Participatory Democracy, a civic group, filed a petition with the prosecution to demand an investigation into Lee and some 10 politicians and businessmen over the scandal.

"The prosecution found no evidence for Lee’s involvement in the illegal funding when it conducted the probe last year. They are looking into the same case again," the Samsung official said. "We don’t understand this. Some of us are gripped by frustration and anger."