Slush Fund Scandal Widening

Was 1996 Election Cash From the Blue House?

State prosecutors said Thursday that most of the 110 billion won ($88 million) that the National Security Planning Agency allegedly provided to the then-ruling New Korea Party's general election headquarters in 1996 came from former president Kim Young-sam's secretly allocated political funds. Mr. Kim was head of the the party.

His government set aside between 20 and 30 billion won every year for the budget of the National Security Planning Agency, now called the National Intelligence Service. The president directed the allocation of the money.

The prosecution is investigating whether the money that the spy agency received from corporate sources was also delivered to the election headquarters.

According to the prosecution, about 20 politicians, including 14 current opposition lawmakers, received the money. The 14 lawmakers of the opposition Grand National Party each received more than 50 million won, the prosecution said. Given the amount of money that was provided, the prosecution believes the number of politicians implicated is about 200.

The prosecution originally intended to ask Kim Ki-sup, a former intelligence official, whom it arrested Wednesday, about the person who either ordered or approved the provision of money. However, Mr. Kim insists that he decided everything.

He will be detained Friday on charges of allegedly embezzling public funds.

The prosecution also plans to subpoena senior officials of the Kim Young-sam administration, including Kwon Young-hae, former director of intelligence, and Kang Sam-jae, secretary-general of the New Korea Party. This is because only party leaders were authorized to approve how the presidential fund was spent.

Even the former president may be investigated, the prosecution said. Reacting to the news, the spokesman for the former president said: "Instead of investigating President Kim Young-sam, who did not receive any political funds, the prosecution should investigate President Kim Dae-jung, who accumulated wealth illegally."

by Shin Dong-jae