- The Washington Times - Monday, March 17, 2003

SEOUL, South Korea, March 17 (UPI) — South Korea's former President Kim Dae-jung is facing a criminal investigation as his successor has approved a new law to investigate allegations that he bought a summit with North Korea in 2000.

Under the law, new President Roh Moon-hyun should appoint an independent council who will lead a formal investigation into the "cash-for-summit" scandal, whose result can put South Korea into political turmoil.

The country's ruling party founded by Kim angrily reacted Monday to Roh's endorsement of the controversial bill, expressing concerns that the special investigation would ensnare Kim.

The Millennium Democratic Party, now ruled by Roh, had called for the new president to exercise his power to veto the bill.

However, dismissing the concerns, Roh, who took office late last month, approved the independent counsel law Friday night. The law went into effect Saturday. The payoff scandal has been a burden on Roh who was elected after pledging to follow in Kim's footsteps by seeking inter-Korean reconciliation.

Roh said he had decided not to exercise his power to veto, saying the opposition party had agreed to limit the scope of the investigation in consideration of inter-Korean relations.

Following Roh's endorsement, the ruling and opposition parties opened negotiations Monday to determine the length and scope of the probe. The country's main lawyers' group also started up the process of selecting independent council candidates. Officials said the investigation would begin in the middle of next month.

During the 100-day long investigation, the special council would investigate Kim, who admitted he was aware of illegal payments by the country's Hyundai Business Group to North Korea just ahead of the summit in June 2000. The investigation will also involve key presidential staff, the country's intelligence agency and state-run banks.

Conservative opposition party has suspected Kim and his aides might have engineered Hyundai's secret transfer of $500 million to secure the first-ever inter-Korean summit, which helped Kim win the Nobel Peace Prize in 2000.

The scandal erupted after government auditors founded that Hyundai secretly transferred some $200 million, obtained from a South Korean state-run bank, to North Korea in June 2000.

In the face of mounting public anger, Kim offered a public apology for the scandal last month, saying he allowed the money to be paid to North Korea though it was in violation of existing law. Citing the "peculiarities" of the inter-Korean relationship, he said initiatives sometimes must be conducted "outside the framework of the law."

Secret financial aid to North Korea is illegal under strict anti-communist National Security Law that bans unauthorized contacts with the world's only Stalinist state.

But Kim said the cash payments were made as part of business deals between Hyundai and North Korea, insisting the money was not related to the summit talks.

Analysts say the special investigation also may lead to strained ties with North Korea because Pyongyang has warned it would freeze relations if South Korea carries out investigation into the payoff scandal.

In an apparent bid to influence the investigation controversy, North Korea has claimed that it had met with secret envoys from Seoul's opposition party who allegedly asked for Pyongyang's help in the Dec. 19 presidential election, promising "huge aid" in return. The opposition party denied the allegation.

Lee Hahn-koo, an opposition lawmaker, said last week the Kim Dae-jung government provided $3.3 billion since it was inaugurated five years ago, including $900 million in cash, claiming the funds were being used to develop its nuclear weapons.

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