Assembly to probe alleged misuse of funds

The National Assembly approved a plan to look into the alleged misuse of government bailout funds intended for troubled companies and financial institutions. On the first day of the plenary session, the Assembly approved the rollover of 3.67 trillion won ($3.1 billion) in bonds issued by Korea Deposit Insurance Corporation.

A special committee of nine Grand National Party lawmakers, eight Millennium Democratic Party lawmakers and one member of the United Liberal Democrats was organized Monday to look into the allegations of unjust use of the public funds. The committee will launch its investigation Tuesday culminating in a televised hearing on its findings from Oct. 7-10.

The committee will look into the allocation of 156 trillion won the nation has spent to prop up its wobbly financial sector since the 1997 Asian financial crisis. Members will discuss measures to recover at least some of the 69 trillion won the government says it would be unable to get back.

The GNP and MDP settled on a list of 40 government agencies to be investigated by the Assembly during the session. Korea Deposit Insurance Corporation, the Ministry of Finance and Economy and the Financial Supervisory Service were among the 40.

Observers said the GNP showed its intention to press hard to reveal misuse of the public monies by naming mostly young, energetic lawmakers to the investigation committee. "The people must know exactly how much of the bailout funds were lost," said GNP lawmaker Park Jong-keun, who was named to the committee.

Some GNP members said they believe Lee Hyung-taek, a nephew of first lady Lee Hee-ho who was indicted on bribery charges last year, wrote off 1.6 trillion won of debts for 104 companies when he served as a managing director of the Korea Deposit Management Corp.

The MDP argued the issue should be dealt with strictly on economic principles and stressed that there was no choice but to inject government funds to save the ailing companies. The MDP said it may bar some witnesses called by the GNP in the televised hearing.

by Rah Hyun-cheol, Kim Jung-ha