Korea Scandal Figure Locks Up at Hearing

“Mr. Lock” lived up to his reputation Monday as the most closemouthed man in South Korea, frustrating lawmakers with contradictory testimony on the first day of politically explosive hearings on the massive Hanbo corruption scandal.

The nationally televised opening hearings were conducted from the jail where Hanbo Chairman Chung Tai Soo, known to Koreans as “Mr. Lock,” is being held on bribery and embezzlement charges.

Opposition leaders say Chung gave government officials secret “political contributions” in return for their pressure on reluctant bankers to make $5.8 billion in questionable loans to Hanbo Iron & Steel Co., a subsidiary of Hanbo Steel, the nation’s 14th-largest business conglomerate that went belly up in January under a mountain of bad debt. Its bailout could cost taxpayers about $3.8 billion.

With irate lawmakers shouting “Don’t tell lies,” the 73-year-old Chung repeatedly insisted he could not remember details of the millions of dollars in campaign contributions he is alleged to have made to at least 24 lawmakers of all three major political parties.

“I can’t remember what I told the prosecutors, and as I said before, I can’t answer the question because I am being prosecuted,” Chung declared.

During nearly 13 hours of testimony, Chung admitted to making a $1.1-million legal donation to the ruling party in 1992 but denied having ever directly given money to President Kim Young Sam. Chung also testified that a Hanbo employee delivered money to three leading politicians, but he later retracted his story.

The parliamentary hearings, scheduled to last nearly four weeks, are expected to call 41 witnesses--including one of the president’s sons--to testify on their dealings with the Hanbo Group.

Monday’s testimony, instead of clearing any poisonous political air, appears to have left the South Korean public even more distrustful of its politicians and its embattled president.

Nearly 95% of those who watched the hearings concluded that Chung was not telling the truth, according to an instant survey by the Chosun Ilbo newspaper and Gallup Korea published today. And 84% said they did not believe Chung’s testimony that he did not give money to Kim during the 1992 election campaign.

The Hankuk Ilbo newspaper ran a cartoon showing disgusted Koreans chucking their television sets out their windows. “On sensitive and core issues, he was, as usual, ‘Mr. Lock,’ ” its headline declared.

Chung has been imprisoned twice before. In 1991, he was convicted of bribing officials to rezone a greenbelt around Seoul to permit a Hanbo Construction apartment complex. Chung earned the “Mr. Lock” epithet during that trial for maintaining that he had paid off only one official and had never contributed to then-President Roh Tae Woo. In 1996, however, he was jailed again when it emerged that he had given $16 million to Roh’s slush fund.

Lawmakers openly discussed prosecuting him for perjury but reached no decision Monday.

The Hanbo collapse has been a disaster for Kim, who apologized to the nation in February but has seen the scandal only widen since.

The first prosecutors to investigate the scandal indicted 10 lower-ranking politicians and cleared the president’s son of all wrongdoing, but the public rejected that finding as a whitewash.

In March, a doctor released a sensational videotape of the president’s second son, Kim Hyon Chol, making a telephone call from the doctor’s office to the Blue House, South Korea’s presidential residence, to discuss a key appointment with one of the president’s top aides. The videotape seemed to confirm what many Koreans suspected--that the junior Kim, who also served as his father’s campaign manager, was meddling in the most sensitive affairs of state.

The Korean media also reported that Kim Hyon Chol spent at least $13,000 a month to maintain six private offices around Seoul, including a suite at the posh Lotte Hotel, where he entertained lavishly. Opposition leaders charged that it was Kim Hyon Chol who greased the wheels for Hanbo Steel to receive unsecured loans of more than five times its net worth.

President Kim was forced to appoint a new, impartial prosecution team, which promptly announced it was investigating Kim Hyon Chol on suspicion of getting a $230-million kickback on an inflated purchase of German machinery for Hanbo Steel. The son has said he is innocent.

Last week, opposition leader Kim Dae Jung alleged that a $67-million contribution by Chung to the president’s election campaign pushed Hanbo toward bankruptcy. Kim charged that the ruling party secretly collected $1 billion during what is believed to have been the most expensive presidential campaign in Korean history.

As an anti-corruption crusader, President Kim has made a point of never accepting a penny from business, said Park Kwan Yong, secretary-general of the ruling New Korea Party.

Park said there is no evidence of wrongdoing on the part of either father or son and that the ceaseless allegations have been “very damaging,” since “ordinary people spread and believe unverified reports and rumors as if they were fact.”

Already, several members of President Kim’s party have suggested he resign as its leader. Any further fallout from the Hanbo hearings could strip Kim of the authority to designate his successor from among the “nine dragons” now contending for the job, said Korea University professor Choi Jang Jip.

Park insisted that prosecutors and parliament will soon reveal the facts behind the sensational scandal. “With presidential elections only nine months away, we are in no position to cover up any evidence in the Hanbo case,” Park said.