Firm Charged With Laundering $2,800 in Donations to Rep. Kim

The American subsidiary of South Korean conglomerate Haitai International was indicted by a federal grand jury Tuesday on charges of laundering $2,800 in illegal corporate campaign contributions to Rep. Jay C. Kim (R-Diamond Bar).

Haitai America, located in Montebello, is the fifth South Korea-based company charged with funneling illicit contributions to Kim’s 1992 campaign.

Kim has not been charged in the case, but his attorney has long acknowledged that the congressman, who was just elected to his third term, is a prime target of an FBI campaign finance fraud probe.

In Washington, Kim said through a spokesman that any illegal contributions were made without his knowledge. He said he planned to give the $2,800 to the U.S. Treasury.

Haitai America, an importer-exporter of everything from chewing gum to car audio systems, was accused of using company employees as conduits for the illegal donations.

A second criminal count charged the company with hiding the contributions on the company’s books. Some of the employee conduits were reimbursed for phony travel expenses, according to the indictment.

Under federal law, it is illegal for corporations to contribute to candidates for federal office and it is illegal for any contributor to conceal his identity.

The company’s criminal defense attorney, Brian Sun, said Haitai America has reached an agreement with the U.S. attorney’s office to plead guilty to two misdemeanor counts and to pay a fine. He declined to disclose the amount.

Brian Yeon Soo Chang, one of the employee conduits named in the indictment, said company officials were ignorant at first of the restrictions on corporate contributions.

In fact, he said, the first contribution to Kim was a check drawn on Haitai America’s bank account, but it was returned by the Kim campaign committee with a note explaining that corporate donations could not be accepted.

Chang, manager of Haitai America’s international trade division, said he was then asked by his superior, general manager Hyun Sik Joo, to write a personal check to the Kim campaign for $1,000, which was reimbursed as travel expenses.

“At the time, I did not think about whether it was legal or illegal,” said Chang, who was not charged in the indictment. “The company requested me to do it, so I did it.”

Joo, who recently returned to South Korea, wrote a personal check to the Kim campaign for $800, and Phillip Taehan Kim, Chang’s assistant, wrote one for $1,000, according to the indictment.

About two years ago, Chang said, he was contacted by an FBI agent who asked if he had been reimbursed for his contribution to Kim’s campaign.

“At first I lied to him because I was scared,” said the Korean-born Chang. “It was my first time I got a call from an FBI agent, and I feared there might be a problem to our company.”

After receiving federal subpoenas, however, Chang said he and other company officials contacted defense attorney Sun, who advised them to tell the truth.

He said he has since given a sworn statement to Assistant U.S. Atty. Stephen A. Mansfield, who is prosecuting the case.

Chang also said he did not know if or how the company was solicited or whether anyone in the Kim campaign committee knew the money was laundered.

“Korean companies doing business in the United States should know about U.S. election law,” he said. “This is a good lesson. This will not happen again.”

Thus far, the government has obtained $1.2 million in fines as a result of its four-year probe of Kim’s campaign financing.

Hyundai Motor America was fined $600,000, Korean Airlines $250,000, Samsung America $150,000, and Daewoo International America $200,000 after pleading guilty to making illegal donations to Kim’s campaign.

But the government lost its only trial growing out of the Kim investigation, that of Hyundai executive Paul Koh. Several jurors said they felt he was unfairly singled out while other officials were granted immunity.

The Koh trial, however, did force the government to reveal some details of its investigation of Kim. According to documents turned over to Koh’s lawyers, Kim’s former office manager told the FBI that:

* Kim and his wife, June, accepted corporate checks and crossed out the word “Inc.” so they could be reported to the Federal Election Commission as donations from individuals.

* June Kim kept secret lists in Korean, indicating the true source of illegal contributions.

* After learning of the FBI’s investigation, June Kim ordered the destruction of computerized campaign finance records.

The FBI probe was launched after The Times disclosed in 1993 that Kim had used corporate funds from his own firm, JayKim Engineers, to bankroll his first bid for Congress.

Since then, the investigation has broadened, implicating a number of South Korea-based companies. Kim is the first Korean American to serve in Congress. Executives and attorneys representing some of the indicted companies said their donations to Kim were motivated by ethnic pride, rather than any desire to buy influence.