Korean Airlines pleaded guilty Wednesday to federal charges of making illegal campaign contributions to the 1992 campaign of Diamond Bar congressman Jay C. Kim.
Assistant U.S. Atty. Stephen A. Mansfield said the airline--which entered the plea to a grand jury indictment returned earlier in the day--has "agreed to cooperate in an ongoing criminal investigation into campaign finance funds."
Mansfield did not disclose the focus of that investigation, but it is known that Kim--an outspoken advocate of campaign finance reform--became the target of a federal investigation into possible election, tax and labor law violations after The Times reported that he secretly used about $485,000 from his engineering corporation to finance his 1992 campaign.
Despite a prohibition on corporate contributions to federal campaigns, JayKim Engineers Inc. provided Kim's campaign with free rent, staff and office supplies, according to internal company records and checks signed by Kim and obtained by The Times.
No criminal charges have been filed against Kim. The Republican congressman's Orange County office declined to comment Tuesday, saying it had not been informed about the federal indictment.
But the airline acknowledged the illegal contribution, saying that it was a case of "enthusiasm" for the candidacy of Korean-born Kim and emphasizing that "the purpose was not to interfere with the American electoral process. . . .
"Korean Airlines regrets that it did not comply with federal electoral law," spokesman Eugene Mueller said.
According to the indictment, Korean Airlines, through two of its officers, contributed $4,000 or more to the 1992 Jay Kim for Congress Campaign Committee. Federal law prohibits campaign contributions from corporations and foreign nationals.
Prosecutors said two separate contributions of $2,000 or more were made Sept. 30, 1992. One, they said, was made through South Korean national Jin Kim, a managing vice president who was the highest-ranking corporate officer at the airline's regional office in Los Angeles. The other was said to have been made through South Korean national Jong Seung Won, general manager of finance and accounting in Los Angeles.
Neither Jin Kim nor Won could be reached for comment Wednesday.
Jay Kim, born in Korea in 1939, came to the United States on a student visa about 30 years ago. After earning advanced degrees in engineering and public administration, he incorporated JayKim Engineers, wholly owned by himself and his wife.
The firm, which specialized in consulting services for government agencies, eventually became one of the top 500 engineering companies in the nation, employing as many as 170 workers in five offices in California and Arizona.
Kim's political career was launched in 1990, when he won election to the Diamond Bar City Council. Two years later, he won the Republican nomination in the 41st Congressional District.
Company documents show that during the 1992 congressional campaign, JayKim Engineers provided Kim with free space for his campaign headquarters in Diamond Bar, plus staff and office supplies. The firm also paid Kim's salary and expenses during the campaign, as well as campaign bills ranging from airline tickets to telephone services.
Federal law prohibits corporations from providing funds or free services for federal election campaigns. Although candidates are required to report all contributions, Kim--whose district includes portions of Los Angeles, Orange and San Bernardino counties--did not disclose any contributions from his corporation.
Campaigning in a heavily Republican district, Kim easily won the 1992 election, becoming the first Korean immigrant elected to Congress. A year later, he was voted the outstanding freshman congressman of 1993.
In the fall of 1993, Kim's son-in-law, David Kim--who took over command of JayKim after the congressman sold the firm to relatives--directed company officials to write off the $485,075 identified in company records as Jay Kim's 1992 campaign costs.
In 1994, as the congressman launched his drive for reelection, the FBI subpoenaed hundreds of pages of records and promotional materials from the 1992 campaign. William Silva, who managed the 1992 campaign, said he had cautioned Kim that contributions from JayKim Engineering might violate federal law, but Kim ignored the warnings.
Despite the burgeoning federal investigation, Kim was returned to office by a comfortable margin in 1994.