S. Korea Premier Resigns Amid Tax Evasion Ruling

South Korean Prime Minister Park Tae Joon resigned today after a court ruled that he hid real estate assets worth more than $5 million in an effort to evade taxes.

Park’s position is largely ceremonial, and his resignation is not likely to affect President Kim Dae Jung’s major policies, including closer relations with North Korea and economic reform.

But the scandal probably will add to the South Korean public’s already high level of cynicism toward its elected representatives. Kim’s government, voted in on a reform platform, has weathered a series of corruption scandals in recent months.

The news also could undermine the president’s bid to overhaul the political system and might hurt his broader legacy. “People’s distrust of politicians will be increased,” said Park Jai Chang, a political scientist with Sook Myong Women’s University.

Finance Minister Lee Hun Jai was named acting prime minister until a replacement can be named sometime next week, the president’s office said.

Opposition parties and civic groups were pleased by the news, having called on Park during the past several days to quit and to clarify where the money came from, why he hid it and why he didn’t pay his taxes.

“We welcome the measure,” the opposition Grand National Party said in a statement. “The government should learn from this experience in making future nonpartisan appointments.”

Holding assets under third-party names was not illegal when the case in question occurred, but the law has been changed. Park is charged with using accounts held by his finance manager between 1988 and 1993 to hide the properties. At the time, he was chairman of the Democratic Liberal Party, which no longer exists.

Political analysts said events are rarely what they seem in South Korean politics, however, and the more intriguing question is why the scandal surfaced now.

Park’s alleged transgressions have been widely known for years. An investigation by the tax authorities in 1993 found that he received $3.3 million in bribes while working at a state-owned company. After the findings, Park lived overseas until October 1994 in what was widely seen as political exile.

The timing in some ways seems very bad, given the planned June 12-14 summit with North Korea. But it may be that the National Assembly election April 13--in which Kim’s party placed a distant second--has forced a reshuffling of positions, said analyst Park Jai Chang. “If you really want to understand Korean politics, you have to approach it from the vantage of palace intrigue.”

Park Tae Joon, 72, is a retired army general. He served as head of the state-run Pohang Iron & Steel Co. before moving into politics. He was named prime minister in February.

Another recent South Korean scandal involved the so-called Furgate allegations: that the wives of government ministers received expensive clothing from a life insurance company as part of its lobbying efforts.

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Chi Jung Nam in the Times’ Seoul Bureau contributed to this report.