Funds Fighting Continues

Spy Agency Head's Statement Feeds Partisan Fire

Testimony given by the head of the National Intelligence Service in parliament Tuesday rekindled the political fight over prosecution charges that the then-ruling New Korea Party diverted funds from the spy agency to finance political campaigns during the 1996 general election.

"The case is clearly one of embezzlement of government budget," Rep. Kim Young-hwan, spokesman for the ruling Millennium Democratic Party said on Wednesday. He demanded that the opposition issue a public apology and return the 119.7 billion won ($93 million) to the government.

However, the opposition Grand National Party, successor of the New Korea Party, said the case is not so clear.

"Director-General Lim's statement at the committee raises some doubts," said Kwon Chul-hyun, the party's spokesman. "Adoption of a special prosecutor is the only way to reveal the truth."

On Tuesday, Lim Dong-won, director-general of the intelligence service, told the National Assembly's intelligence committee that the 119.7 billion won funneled to the ruling political party came from the unused portion of the agency's budget and interest payments.

According to Mr. Lim, 25.7 billion won was withdrawn from four financial institutions in May 1995; 14 billion won from Korea Development Bank, Kookmin Bank and two others in October 1995, and 80 billion won from H&CB in January 1996.

But the opposition, which has consistently said that the money did not come from the spy agency's coffers, charged that Mr. Lim's testimony proves their claim. Opposition lawmakers also pointed out that the director-general's testimony was not consistent with the findings of the prosecution in the case.

Prosecutors said that the total sum of the money came from the agency's 1995 budget surplus and the 900 million won in cash raised from the sale of its headquarters near Namsan, central Seoul.

Kang Sam-jae, vice president of the opposition party who handled day to day affairs during the 1996 election, and Kim Ki-sup, former money manager of the intelligence service, have been charged with making the illegal transaction.

by Kim Ji-soo