Party Is Target of Suit To Recover Spy Fund

State prosecutors filed a damage suit Monday against Rep. Kang Sam-jae, a vice president of the opposition Grand National Party, Kim Ki-sup, former money manager at the National Security Planning Agency, and the Grand National Party itself after the National
Intelligence Service demanded the return of 94 billion won ($73 million) that it says was illegally diverted from its coffers to support the then-ruling New Korea Party's election campaign in 1996.

The National Intelligence Service is the successor of the National Security Planning Agency and the Grand National Party the successor of the New Korea Party. The prosecutors demanded the return of 94 billion won plus interest.

Earlier in the day, the nation's top prosecutors effectively wrapped up their investigation by indicting Mr. Kang without detaining him on a felony charge of misappropriating government
funds.

He was in charge of day-to-day money transactions for the then-ruling New Korea Party's campaign in 1996.

Political observers see Mr. Kang's indictment as the end of the investigation by the prosecution since it did not wait for the National Assembly's consent to arrest him. Mr. Kang as a law-maker
cannot be arrested during a session without the legislature's consent.

In their official statement, prosecutors said that the entire operation was masterminded by Mr. Kang and Kim Ki-sup.

Mr. Kim was indicted and detained Monday on charges of violating the law governing the state intelligence agency, which stipulates that its money cannot be used for purposes other than running the agency.

"Now that Mr. Kang has been indicted," prosecutors said, "the ball is in the court's hand to decide whether to detain him."

According to the prosecution, Mr. Kim, in collusion with Mr. Kang,
embezzled 119.7 billion won from his agency and passed on to the former ruling party 94 billion won for the 1996 general election and 25.7 billion won for 1995 local elections. The money was laundered repeatedly, it said.

In addition, prosecutors plan to take legal action against Lee Won-jong, former Blue House secretary of political affairs, and Kwon Young-hae, former director of central intelligence, on charges of overlooking the diversion of tax money for political purposes.

No evidence has been found of the involvement of former president Kim Young-sam and his son, Hyun-chul, the prosecution said. No legal action will be taken against some 200 politicians who received the funds.

by Park Sung-woo