Lawmakers press Chun family

Despite the explanation by former President Chun Doo Hwan’s son that his operation of a shell company in a tax haven has nothing to do with his father, the snowballing scandal has fueled lawmakers’ determination to go after the former military strongman’s hidden assets.

Chun Jae-kook, the eldest son of former President Chun, was named a tax haven client on Monday by the Korea Center for Investigative Journalism. According to the independent media group, the younger Chun created a shell company in the British Virgin Islands in 2004 and operated a corporate bank account under its name. The timing of the deals coincides with the Korean prosecutions’ investigation in 2004 into his younger brother’s gift tax evasion charges, the group said.

Following the report, Chun issued a press statement and explained that the shell company had nothing to do with any illicit activity. “It has nothing to do with my father,” he said. “It also was not intended to evade taxes or conceal assets.

“When I stopped my study in the United States in 1989, I created the shell company in the process of transferring the leftover tuition and living expense to Singapore at the recommendation of a bank,” Chun said. “I have never taken my wealth from Korea abroad and I currently own no overseas financial assets.”

Chun, however, did not explain the source of the tuition and living expense as well as other details, such as how much the leftover sum was.

The main opposition Democratic Party yesterday made clear its intention to use the latest revelation involving Chun as the driving force behind its campaign to pass a law to go after the former strongman.

“The Pandora’s box for Chun Doo Hwan’s slush funds was finally opened,” Representative Jun Byung-hun, the floor leader of the DP, said at the party meeting yesterday. “Time is running out fast until the expiration date in October for collecting his fine. The National Tax Service and the prosecution must achieve some visible outcome this time.”

Jun also said it is crucial for the National Assembly to approve a law to go after Chun during the June session, promising the party’s full cooperation. He also urged the ruling Saenuri Party to join in.

The elder Chun came to power in 1980 via a military coup, but in 1997 he was convicted of crimes for treason and corruption. Although the Supreme Court ordered him to pay 220.5 billion won ($196.3 million) in fines, he has paid less than 25 percent of that amount.

Despite his 167.2 billion won in outstanding fines and a deadline of Oct. 11, Chun has refused to pay the rest, although speculation is high that he concealed his wealth under his family member’s names, including his three sons.

The DP has submitted several bills to the National Assembly to revise the special law governing public servants’ crimes. One of the bills, sponsored by Representative Choi Jae-sung, is especially dedicated to go after Chun.

Choi’s bill seeks to allow the government to forcibly seize assets of a convicted former or incumbent president or a cabinet member at the request of a prosecutor if three years have passed after the fine is finalized. Under the current law, the deadline for the collection is extended when the convict makes a small payment.

The bill also allows the government to collect assets of the convict’s children and other relatives if there is evidence to prove that they were aware of the illegal nature of the wealth.

If the convict still fails to pay the fine in full, he or she will face forced labor, according to the revision bill.

By Ser Myo-ja [myoja@joongang.co.kr]