COLUMN ONE : The Fast, Rocky Rise of Jay Kim : As the first Asian immigrant elected to the Congress, his success was a cause of celebration and hope for millions of other Asian-Americans. Now, federal investigations have shaken his career.

TIMES STAFF WRITERS

More than half a century ago in Seoul, Jay C. Kim's mother had an auspicious dream about the baby she was carrying. A maiden in flowing Korean attire offered her three magnificent jade hairpins, and she chose one. Catching a glimpse of herself in a mirror, she was pleased. Awakening, she was certain that her child would be special.

Last year, Kim rose to the U.S. House of Representatives, the first Asian immigrant elected to Congress. His success was a cause of celebration and hope for millions of other Asian-Americans. For the Korean community, feeling battered by the Los Angeles riots, his victory was deeply gratifying.

But after a meteoric leap from the Diamond Bar City Council to national office, Kim now faces federal investigations into alleged violations of campaign, labor and tax laws related to his engineering business and his handling of his 1992 election campaign. His political career and reputation are at stake. His standing as a rising star in the Republican Party, a champion of free enterprise and an advocate of campaign reform are shaken.

His critics say Kim's political career has been marked by a disregard for basic campaign financing regulations. In formal complaints, opponents have alleged that Kim won his congressional seat unfairly by secretly using about $400,000 from his corporation to finance his campaign.

His defenders say Kim is a decent man who would not intentionally violate any regulations and who is being unfairly singled out for scrutiny because he is a Korean-American. He has a certain naivete about the political system, they say, in part because he comes from a different culture and a small-business background.

In interviews with more than 100 personal and professional associates, a portrait emerged of a man whose memories of war and poverty fed his determination to acquire material wealth and prestige. With the help of government programs, he built a small civil engineering firm into one of the nation's top 500 engineering companies and became a multimillionaire. Trading on his Asian heritage and a gregarious personality, he pursued his political aspirations with the same zeal.

As a new congressman, Kim plunged into his duties. His attendance was perfect, and he made speeches virtually every day. He went on the attack against inefficiency in government, including Congress itself. His Republican colleagues loved him. They were amused by his bluntness and misadventures as a newcomer. He was voted most outspoken freshman in the House.

On the road to recognition, however, Kim has been accused of cutting corners, of valuing the ends more than the means to success. And he has found himself in disputes--over unpaid bills and back taxes, over government audits and campaign finances.

Kim declined to be interviewed for this article but has repeatedly said he did nothing improper. During a gathering of ethnic Korean reporters he apologized for the anxiety his problems have caused the Korean-American community. "I have tried hard to live honestly without violating laws," he said. "My disappointment is indescribable. . . . My dream was to use this opportunity to become a great congressman."

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Chang Joon Kim, whose name means Golden Splendid Law, was born in Seoul in 1939. His father, a learned man who managed a big restaurant, had waited eight years for a child. He wanted to give his son a particularly elegant name.

Chang Joon was a sickly child so his mother often carried him on her back to a doctor or a mudang, a female spiritualist.

"I handled him like precious gold or jade. . . . I gave him only the best food I could find," said the mother, Woon Kil Choi, now 83 and living in a federally subsidized apartment in Koreatown. "I decided that I would make sure Chang Joon received the finest education possible, even though I myself have never even entered a school gate."

As a boy, Chang Joon was outgoing, always the center of attention. He was generous too, sharing precious rice cakes with his friends. He sang well and visited hospitals to entertain patients. He loved being an only child. "He'd go to the back of the house and pray that he wouldn't have a sibling because he wanted to monopolize our love," his mother recalled.

Chang Joon was in his early teens when the Korean War broke out in 1950. To evade being abducted into forced labor by Communists, his father hid inside their home. His mother was ordered to repair bombed-out railroad tracks at night.

After their home was destroyed, the family put their belongings on a cart and walked 90 miles to Taejon. "My husband pulled the cart, I pushed it from behind and Chang Joon walked beside it," Choi said. "Every now and then, he'd turn around and ask: 'Mother, are you all right?' My son always thought of me."

Even during their three years in Taejon, Chang Joon was irrepressible. He would tell stories to the neighborhood children and make them laugh. People said he would make a good lawyer.

After attending two universities in Seoul, Kim had a stint in the military, then went to the United States in 1961. He left, his mother said, because he believed that his future would be limited by his family's lack of money and connections in South Korea's Confucian-steeped hierarchical society.

In California, Kim attended a community college, then transferred to USC, where he earned bachelor's and master's degrees in civil engineering. In 1962, he married Jung Ok (June) Kim, whom he had courted in Seoul, and they started a family. Juggling school, jobs and family was difficult so they sent their two young children to live temporarily with Kim's mother back home, an accepted practice for Koreans.

Korean-Americans remember Kim standing out among his countrymen because of his sense of humor and interest in American politics. An advocate of Americanization, Kim helped found the Korean American Political Assn., now defunct. He was president in 1974 when the organization endorsed Democrat Edmund G. (Jerry) Brown Jr. for governor.

After college, Kim went to work as the city engineer for the cities of Ontario and Compton. He also earned a second master's degree in public administration at Cal State L.A., where he impressed others with his determination to learn the intricacies of government.

But Kim grew restless working for others and in the late '70s set up JayKim Engineers Inc. with $25,000 of his own money and a $100,000 loan from the Small Business Administration.

For 14 years, the SBA assisted JayKim Engineers with various loans, bond guarantees and government contracts set aside for minority businesses. He was named the SBA's small businessman of the year for this region in 1985. But the relationship got off to a rocky start.

In one of Kim's first big jobs, his company was hired in 1978 to install pipe at a Simi Valley water quality control plant. Records show that the company was removed for "incompetent and . . . poor workmanship." The piping had to be redone at an extra cost to taxpayers of about $500,000.

In 1983, the SBA admitted Kim to a special program for small, disadvantaged firms. He enlisted the support of congressmen in getting his application approved and in extending his term of participation in the program from four to nine years.

The Asian community named Kim the Asian business owner of the year in 1984--the year his company took off. The Army Corps of Engineers selected the firm, through the SBA program, for all its engineering work in the Los Angeles district--about $400,000 worth.

In a recent magazine interview, Kim said the program did not help him nearly as much as he had hoped. "My goal was to get $5 million in . . . (government) contracts," he said. Kim complained that the program "required too much playing games, too much back-scratching bureaucrats."

JayKim has won $8.7 million in contracts on the Los Angeles Metro Rail project. In the late 1980s, auditors criticized the company for lax controls, bookkeeping problems and overcharges. Two audits of the company found that some labor and overhead costs had been inflated. One found that some employee time cards in 1989 were altered with white-out.

Kim blamed a subordinate for the overcharges. Of the $155,000 challenged by auditors, Kim paid back $92,000, transit officials said.

By then, Kim and his wife were making a very good living from their company and real estate investments, reporting annual income of $237,000. They finished their million-dollar dream house on an acre lot in the newly incorporated city of Diamond Bar.

Less than a month after moving in, Kim jumped into the race for the City Council. He switched his voter registration from undeclared to the Republican Party. The next day, he used a loan from his company--legal under local ordinances--to open his campaign. It was a bold strike for a new resident.

"Most people who run for office here have come up through the social organizations like the Kiwanis Club, or they've been active for a long time in community causes or organizations," said a former top city employee. "It seemed like Jay Kim just came from nowhere."

Chris Stewart, who advised Kim during his 1990 campaign, described Kim as "a very naive candidate" when it came to campaign disclosure requirements. Kim omitted significant investments and property holdings on a required statement of his economic interests. State officials said he did not register his corporation or himself as a "major donor," as required of anyone donating more than $10,000 a year to political races. JayKim Engineers loaned or donated Kim's campaign about $23,000 out of $38,000 raised.

Kim was not penalized for the omissions, but state auditors this year questioned whether he should have paid income taxes on campaign loans from his company. Furthermore, they alleged that the company had improperly taken tax deductions on about $7,000 in contributions to other unnamed politicians in 1989 and 1990. Kim has blamed his staff for deducting the campaign contributions and said he would pay any back taxes.

The war chest for his council race far exceeded those of the other eight candidates. Kim placed a runaway first, with about 25% of the vote.

As a political training ground, Diamond Bar was a swamp. City Council members were notorious for personal animosities and public name-calling. Citizen groups have mounted recall attempts and accused the mayor of self-dealing.

In this raucous atmosphere, Jay Kim "just sat there very nice and never ruffled any feathers," recalled one former city official who spoke on condition of anonymity.

"If you went to Kim and talked to him about the issues, he would 'yes' you to death--and then he'd vote 'no,' " said activist Eileen Ansari, who thought Kim was too sympathetic to developers.

Kim took pride in leading the way in privatizing government services that cut city employees from 150 to about 25 people. Government, he often said, could learn some lessons of efficiency from private business.

By 1991, Kim was a wealthy man, even though his company had begun to founder. On financial records, Kim listed his net worth at $7 million, including $70,000 in jewelry. He reported annual earnings of $583,000, including his company salary of $150,000. He valued his stock in JayKim Engineers at $4 million.

That summer, he and a business partner bought a $2-million office building in Diamond Bar where JayKim Engineers is headquartered. Kim's partner in the building is Murli Tolaney, president of Montgomery Watson Co., which had selected JayKim Engineers as a partner in multimillion-dollar design contracts for the new Hyperion water treatment plant in Los Angeles.

Tolaney said the building purchase was a personal investment with Kim, whom he described as a longtime friend and "one of the most honest and humble individuals."

The Hyperion contracts helped carry JayKim Engineers through the recent economic downturn, according to Frederick Schultz, the company's former chief financial officer who left JayKim last spring. In late 1991, Schultz was fielding calls from subcontractors and vendors who had not been paid. One was Vance Brown, owner of an engineering firm who said in an interview that JayKim Engineers at one point owed his company a quarter-million dollars and is now paying off the remaining debt.

"The company as a whole is in a terrible financial situation," Schultz wrote in a memo to Kim in 1991. He recommended filing bankruptcy. To help meet its payroll, the company borrowed from its employee profit-sharing plan, records show, even though this is prohibited by federal tax and labor law.

"I paid it all back with interest," Kim has said. "I thought this was all right to do so."

The Department of Labor is investigating withdrawals by the company from the fund.

The financial problems arose partly as the result of trouble on two big jobs.

One was the design of a freeway on-ramp in the Moreno Valley. JayKim's contract was terminated by city officials who complained that the company made misrepresentations and performed "inaccurate and incomplete work." Kim threatened to sue city officials for defamation because they reported the company's performance to Caltrans. He sought final payment of $728,000 for his work--but a judge recently rejected the demand. Kim has said he will appeal.

The company also encountered problems on a prison design contract in Imperial County. State prison officials say they have notified JayKim that the firm is liable for about $240,000 in construction change orders caused by the company's deficient design plans. The matter has not been settled. Company officials could not be reached for comment.

As Kim's firm struggled to pay its bills in 1991 and 1992, his political star was rising. Reapportionment had created a new, open 41st District congressional seat covering parts of Los Angeles, Orange and San Bernardino counties. Local Republican Party leaders were looking for a strong candidate. And Kim was a successful businessman, a father of three, an elder in his church and a good golfer.

"I asked Jay Kim to run because I thought he had an ideal profile," said Dr. Forest Tennant, a San Gabriel Valley Republican leader. "It was literally within a few weeks of the filing deadline that we recruited him and he decided to run."

A prominent Korean-American who has known Kim for many years said: "He's the luckiest person I know--mostly because he was at the right place at the right time. (It) didn't give him time to pay his dues, to get seasoned and be tested."

Kim was fast out of the block--and won the primary by 1,000 votes. But he ran afoul of a local campaign sign ordinance, and his former campaign manager sued, alleging that Kim failed to pay a $40,000 bonus after the primary victory.

During the general election, JayKim Engineers became an extension of Kim's campaign, which was run out of the company headquarters. Records show that key company employees worked on the campaign--and, with Kim signing the checks, the firm picked up bills for photocopying and some other campaign expenses. To conduct company business, employees had to rent vehicles because JayKim Engineers trucks were delivering campaign signs and flyers, according to one former top manager.

Federal authorities are investigating whether Kim violated a prohibition on corporate contributions to federal campaigns. FBI agents this month raided the offices of JayKim Engineers, hauling off documents and computer equipment. The probe followed reports in The Times in July that the company's chief financial officer designated about $400,000 of the company's costs as campaign-related. Of this, records show, about $300,000 was the cost of carrying Kim on the payroll, which could be a violation of election laws if Kim did not earn the money. Kim has said he continued to work during the campaign.

While the company was paying the campaign expenses, it was falling behind on its taxes and payments to creditors. The firm also would default on a $1-million bank loan.

Kim won election, reporting $790,000 in loans and contributions, much of it from Asian-American communities nationwide.

After his victory, he made a triumphant journey home to South Korea, where he met with the president and addressed the National Assembly. Koreans have a phrase for such a homecoming: kum-eui-hwan-hyang, or returning home in golden attire. But the freshman congressman's sweeping promises to help solve vexing trade problems struck some commentators as grandiose.

"I was thinking to myself, if I were Jay Kim, I would keep a low profile--act more humble," said Jay K. Yoo, known as the Ted Koppel of Korea.

Upon his return to the United States, Kim headed for Washington "to make government run more like business." He made it clear that he was not elected as an advocate for the Asian community. He said he owes his first loyalty to the people who elected him--"conservative, white, rich people." He noted that only 17 Korean-Americans were registered to vote in his district.

He aligned himself with the right wing of the Republican Party, and his fellow Republican freshmen earlier this year named Kim the most outstanding legislator among them.

His record reflects his interest in privatization and the health of small businesses like JayKim Engineers, which he has sold to his in-laws. He secured a seat on the powerful House committees on public works and transportation and on small business.

His first bill provided more federal money for transportation, airport and harbor projects. The second would require states to enter into private-public partnerships to construct highways, bridges and other transportation facilities. He also fought to keep the Long Beach Naval Shipyard from being added to the base closure list.

As the first Asian immigrant in Congress, Kim stood out even among others of Asian ancestry who were American-born. His English sometimes failed him when he needed to make fine points. "If you're an immigrant in this country, you can lose everything except an accent," he has said. "Henry Kissinger had an accent. I'm not elegant. I'm an engineer."

Playing the bumpkin, he told humorous stories about getting lost in the tunnels below the capital. Back home, he told a gathering of Korean supporters about his confusing first days as a congressman. He was "shocked" that all the black members seemed to be sitting on one side of the House. "Why is it?" Kim asked. "Is it segregated?" He was told that Republicans sit on one side of the aisle, Democrats on the other.

"I didn't know that," Kim said to his bemused audience.

Since The Times articles about his campaign spending and business problems, Kim has spent much of his time buttressing his support.

Kim has said he did not knowingly break any rules and had a right to collect his salary and personal expenses from his corporation during his campaign. "I shouldn't get a salary from a company I own 100%?" he asked. "(It went from) this pocket to that pocket."

He said an accounting firm he hired has concluded that he made only one mistake: His business should not have paid the rent or other incidental expenses for his campaign, amounting to $30,000 to $35,000.

But, Kim added: "I guess I should be aware that I am a congressman, and no longer just a plain citizen. Everything I do will be an issue."

His allies have formed a 27-member advisory committee and smaller support groups in 14 states. Other Koreans hope that the probes will clear his name.

"Regardless of the outcome, his reputation has been damaged," said longtime friend Eui-Young Yu, sociology professor at Cal State L.A. and an authority on Koreans in Southern California. "I don't know whether he will recover. I hope he pulls through."

Profile: Jay C. Kim

Rep. Jay C. Kim (R-Diamond Bar), the first Korean-American elected to Congress, is under federal investigations for alleged violations of campaign, labor and tax laws related to his engineering business and his 1992 election campaign.

* Born: March 27, 1939 in Seoul, Korea

* Residence: Diamond Bar

* Education: Completed high school and attended universities in Seoul. Degrees from USC and Cal State L.A.

* Career highlights: Presently a congressman from the 41st District, Kim was owner of JayKim Engineers, and worked as the engineer for Compton and Ontario. This year, he was a recipient of the Ellis Island Medal of Honor award given to immigrants who have made outstanding contributions to the United States.

* Interests: Golf

* Family: Wife, June, a daughter and two sons.

* Quote: "I wanted to be the best congressman in American history--God knows, my wife knows."

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