Rep. Kim, Wife to Plead Guilty to Misdemeanors

A four-year federal investigation that snared five multinational corporations claimed its biggest prize Thursday when California Rep. Jay C. Kim and his wife agreed to plead guilty to concealing more than $230,000 in illegal campaign contributions from corporate and foreign donors.

In a deal with prosecutors, the Republican congressman from Diamond Bar and his wife, June, who helped manage his campaigns, will be allowed to plead guilty to misdemeanor election law violations in Los Angeles federal court Monday.

“With many lessons learned, it is time to move forward,” he said in a brief written statement promising to continue his work in Congress, where he is the only Korean American.

The most serious allegations involving the Kims were contained in a felony complaint filed not against the couple but against Kim’s campaign committee. Although Kim will enter a guilty plea on behalf of the committee, he will not be held personally responsible for that complaint.

The Kims face fines of up to $635,000. According to the plea agreement, prosecutors will request as much as six months in jail for the couple--as opposed to the maximum one-year sentence the violations typically carry.

By negotiating a misdemeanor plea, and avoiding a felony conviction, the lawmaker probably spared himself being pressured to resign by his House colleagues.

Beneath the surface of the negotiated settlement, however, there was dissatisfaction in some law enforcement quarters because the Kims were not charged with felonies. Well-placed sources told The Times that U.S. Atty. Nora Manella and her staff in Los Angeles lobbied unsuccessfully with their Washington superiors for permission to seek felony indictments against the couple.

“We had a lot of discussions with the Department of Justice,” Manella said Thursday, “but at the end of the day this decision is one that I’m fully on board with.”

The plea agreement, she added, makes clear “in black and white” that Kim and his wife were engaged in “a scheme of illegal conduct over a period of years.”

Assistant U.S. Atty. Stephen Mansfield, who headed the Kim investigation, said the agreement “represents a consensus of what is an appropriate and fair resolution.”

4-Year Inquiry

Kim, who represents a solidly Republican district straddling Los Angeles, Orange and San Bernardino counties, had been under investigation since 1993--the same year he took office--when a series in The Times revealed that he used hundreds of thousands of dollars from JayKim Engineers Inc. to finance his campaign, including salaries, office space, travel and entertainment.

U.S. law bars corporations and nonresident foreigners from contributing to candidates for federal office.

Spurred by the newspaper’s disclosures, the FBI launched a broad probe into the financing of Kim’s congressional race.

Over the next four years, five American affiliates of Korean conglomerates pleaded guilty to laundering corporate or foreign-source contributions into Kim’s treasury. Korea Airlines, Hyundai Motor America, Samsung America, Daewoo and Haitai paid fines totaling $1.6 million.

A Hyundai executive, Paul Koh, was tried and acquitted last year on charges of masterminding his company’s money-laundering scheme.

The government fared better this spring when a federal jury convicted Seokuk Ma, a onetime treasurer of Kim’s campaign committee, of felony charges of campaign money laundering.

At his trial, Ma did not contest the basic facts of the case, but he testified that he was merely following the instructions of June Kim.

“My culture is very different,” the Korean emigre testified when he took the witness stand. “I respect Congressman Kim very much. If they ask me to do something like that, I cannot refuse. If I say no, it’s kind of an insult to them.”

Another former campaign worker, Jane Chong, testified that Ma told her the Kims had to cancel a trip to South Korea designed to raise $1 million after The Times’ series was published in July 1993.

“He said Kim had a million dollars lined up in Korea, and that was just blown,” she testified.

Chong had previously given a statement to the FBI alleging that both Kims erased the abbreviation “inc.” from donors’ checks so they could be reported to the Federal Election Commission as contributions from individuals. She also said that June Kim kept secret lists in Korean, indicating the true source of illicit contributions, and that the congressman’s wife ordered her to destroy computerized records that the FBI could use against her husband.

Soon after Ma’s conviction, Rep. Kim hired a prominent white-collar criminal defense lawyer, Thomas Holliday of the Gibson, Dunn & Crutcher firm.

The congressman’s wife obtained her own attorney, Robert Corbin, another well-known specialist in white-collar criminal defense.

What followed were weeks of intense negotiations between the Kims’ lawyers and the U.S. attorney’s office in Los Angeles.

In his misdemeanor plea agreement, Rep. Kim acknowledged accepting $50,000 from Song Nien Yeh, a Taiwanese national, in May 1992 and laundering it through his personal bank account into the campaign treasury.

He also admitted accepting an illegal $12,000 corporate contribution from Nikko Enterprise Inc., a New York-based company. That donation was also laundered through the Kims’ personal account.

A third misdemeanor involved Kim’s funneling more than $83,000 from his engineering company into the 1992 campaign, as detailed in The Times’ series.

June Kim agreed to plead guilty to two misdemeanors charging her with accepting more than $19,000 in corporate contributions.

Five felony counts were filed against the Jay Kim for Congress Committee. They involve concealing more than $200,000 in illegal contributions in reports filed between 1992 and 1997 with the Federal Election Commission.

Shock at Deal

Private attorneys who represented other defendants in the investigation expressed shock that the government’s intensive effort resulted only in misdemeanor charges against the Kims, the principal targets.

“I am surprised that the investigation took so long and that the government allowed the congressman to plead guilty to misdemeanors when my low-level client was charged with a felony,” said attorney Jerry Roth, who successfully represented Koh, the Hyundai executive accused of laundering corporate money into the Kim campaign.

Roth said he believes that the government had sufficient evidence to bring felony charges against June Kim, based on FBI reports he reviewed.

“This is just amazing,” Roth said. “It allows him to keep his seat.”

In the Korean community Thursday, the news of the congressman’s plea was greeted with sadness and relief.

“First, I’m glad it’s over,” said Charles J. Kim, executive director of the Korean American Coalition. “Second, I’m glad he doesn’t have to quit his job. Third, I’m glad we no longer will have to see his name in the newspapers in this connection. He should have known better. He is a politician--he is no better or no worse than others.”

John J. Chung, president-elect of the Korean American Bar Assn. and a Democrat, said: “I am not a political supporter of Jay Kim. However, I believe that this is a sad day for the Korean American community.”

Another Korean American community leader, who asked that he not be identified, said Kim should have taken the initiative to report his mistakes.

“It’s a big blow to the Korean American community. His actions have tarnished the image of the community.”

As a member of the House, Kim has voted fairly consistently with conservative Republicans. Over the years, he has received 100% approval ratings from such special interest groups as the National Right to Life Committee, the U.S. Chamber of Commerce, the Christian Coalition, the American Conservative Union and the National Rifle Assn.

On Thursday he attended the weekly lunch held by his Republican colleagues from California and said nothing of the plea bargain he had struck. After the lunch broke, Kim’s aides delivered his three-paragraph statement to the offices of some members.

Once informed, some lawmakers suggested that the congressman had reason to celebrate, that years of operating under a cloud of alleged wrongdoing were finally over.

“If I were him, I’d be popping champagne,” one prominent Republican aide said. “I think people were expecting Jay to end up in jail. He got off lightly, and I think he should have. The guy was hounded unfairly for four years. I think this lifts the cloud.”

Some Republican colleagues felt that Kim never intended to break the law, attributing his misdeeds to clerical problems and misunderstandings. They predicted that he would continue his legislative career without setback.

“It’s done. He didn’t shoot anybody. All the damage that could have been done to Jay at this point has already happened and will have no impact whatsoever,” the Republican aide said.

It is conceivable that the Democrats could file an ethics complaint against Kim calling for a House investigation of his misdeeds. But the House ethics committee is under a moratorium now as it works to revise its procedures. The moratorium will be lifted when members return from their summer recess in early September.

Under the U.S. Constitution, the House can choose by a two-thirds vote to expel any member for any reason, but conviction of a crime is not cause for automatic expulsion or forced resignation. As a practical matter, his fellow Republicans probably would have prevailed on him to step down if he had admitted to a felony instead of a misdemeanor.

Success Story

Until his campaign fund-raising activities came under investigation, Kim’s biography read like a classic immigrant success story.

He was the first Korean-born American elected to Congress, a distinction that made him a hero to kinfolk at home and abroad.

As a child during the Korean War, Kim saw his home destroyed and was forced to flee with his family on foot from invading Communist soldiers. He came to the United States in 1961 as an impoverished student and enrolled at USC, where he earned a civil engineering degree in 1967. He also received a master’s degree in environmental engineering from Cal State Los Angeles.

Afterward, he worked as city engineer in Ontario and Compton. In 1976, he started his own firm, JayKim Engineers, designing highways, water reclamation plants and other public projects. They included an $8.7-million contract for Los Angeles’ Metro Rail.

In 1990, Kim built a million-dollar view home in affluent Diamond Bar and ran for a seat on the City Council. He won handily, eventually serving as mayor in 1991-92.

Having tasted success in local politics, Kim saw a chance to catapult to higher office when a new congressional seat was carved into the Inland Empire in 1992.

With Republican voters outnumbering Democrats by a wide margin in the new district, winning the GOP primary was tantamount to election in November.

Kim vastly outspent his five Republican rivals in the primary and captured the seat. But it was his spending during that race that would eventually mark his undoing.

Kim is the second congressman from California charged with criminal misconduct in recent years. In 1995, Rep. Walter R. Tucker III was tried and convicted by a jury in Los Angeles federal court on charges of extortion. He is serving a 27-month term at Lompoc federal prison.

Contributing to this report were Times staff writers Faye Fiore in Washington and K. Connie Kang and Claire Spiegel in Los Angeles.

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A Chronology of Kim’s Downfall

June 1992: Outspending his opponents, Diamond Bar Mayor Kim wins GOP primary in newly created 41st Congressional District, a victory that virtually assures his election in November because of large Republican electoral base.

November 1992: Kim handily beats Democratic opponent in general election, becoming first Korean American elected to Congress and a source of pride to Koreans here and abroad.

July 1993: In a series of articles, The Times discloses that Kim used more than $400,000 in funds from his own company, JayKim Engineers Inc., to bankroll his run for Congress, despite a law prohibiting corporate donations to candidates for federal office.

October 1993: FBI agents raid JayKim Engineers, seizing records and computer equipment in probe of possible campaign fund-raising violations.

June 1994: Despite FBI investigation, Kim beats back challengers in GOP congressional primary, going on to win a second term in the November general election.

December 1995: In first of five indictments brought against U.S. affiliates of Korean conglomerates, Korea Airlines pleads guilty to making illegal contribution to Kim’s 1992 campaign. Companies subsequently indicted and pleading guilty over the next year include Hyundai Motor America, Samsung America, Daewoo and Haitai. They are fined a total of $1.6 million.

May 1996: Federal court jury acquits Hyundai America controller Paul Koh of charges that he conspired to launder corporate funds to Kim’s campaign.

June 1996: Kim prevails in GOP primary and wins re-election to a third term in November.

December 1996: Seokuk Ma, a fellow Korean emigre and treasurer of Kim’s campaign committee, is indicted by federal grand jury on charges of accepting and concealing illegal contributions for the congressman’s 1994 campaign during a time when Kim knew he was under investigation.

April 1997: Ma is convicted after a jury trial in which he testified he was following instructions from Kim’s wife, June. His sentencing is set for September.

July 31, 1997: Kim and his wife are charged with accepting more than $230,000 in illegal campaign contributions. His campaign committee also is charged with violations of federal election law.

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Profile: Jay C. Kim

Born: March 27, 1939 in Seoul

Political career: Served on Diamond Bar City Council, 1990-1991; mayor of Diamond Bar, 1991-1992; in November 1992 becomes first Korean American elected to Congress

Education: Bachelor’s and master’s degrees in civil engineering from USC; master’s in public administration from Cal State L.A.

Family: Married; three grown children and a granddaughter

Compiled by Maloy Moore, Times Editorial Library