Global Policy Forum

Scandals Darken Korean Summit


By John Gittings

The Guardian
May 16, 2000

South-east Asia editor Tuesday May 16, 2000 South Korea is being racked by two corruption scandals which threaten to overshadow the plans for next month's unprecedented summit with North Korean leaders in Pyongyang.

One involves love letters written by a former South Korean defence minister while he was in office to an attractive lobbyist for a US armaments firm. The other suggests that large kickbacks and bribes were paid to senior officials and politicians to influence the award of a prestigious high-speed-railway contract.

"To lovely Linda," Lee Yang-ho wrote to the Korean-American Linda Kim in April 1996 while negotiating a $210m (£138m) deal to buy hi-tech surveillance equipment. "Let me know as soon as you sign the contract."

Ms Kim, who was handling the account for E-System of Texas, had apparently charmed the minister by ending a letter to him with the words "I love you".

"Your conclusion," replied Mr Lee, "could shield and harmonise all complications. Let us make joint efforts not to forget our pure and beautiful feelings." Mr Lee's ministry subsequently accepted E-System's bid for a remote-control signal intelligence system that could be used to spy on North Korea; the price agreed is said to have been higher than rival bids from France and Israel.

In the second scandal, transport ministry officials and national assembly members are suspected of corruption in connection with the TGV rail project, which will link the capital Seoul with Pusan when it isfinished.

The contract appears to have gone to the well-connected French firm Alstom; one lobbyist acting for the company is the wife of head of its Seoul branch. Another lobbyist, who allegedly shared kickbacks totalling £7.2m, has fled to the US and was last spotted dining in Los Angeles.

It is not the first time Mr Lee has come under scrutiny for corruption. In October 1996 he went to jail for taking bribes in another case. Last week he admitted having an "inappropriate relationship" with Ms Kim, but said that he had only urgedher to persuade the US firm to lower its price.

Ms Kim denies accepting money in return for favours but admits that the letters are genuine. The US company says she was paid a standard commission for the deal. It was investigated in 1998, but no action was taken.


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