Tuesday, November 6, 2007

Fresh Allegations in Samsung Scandal

A scandal involving alleged Samsung Group slush funds is snowballing with a series of new disclosures by a former head of the conglomerate’s legal team Kim Yong-chul and the organization he unburdened himself to. In addition to secret funds amounting to W1 trillion (US$=W907), the Catholic Priests` Association for Justice and Kim say that Samsung regularly bribed 40 prosecutors and that it manipulated evidence and testimony in a trial on illegal wealth transfer from Samsung chairman Lee Kun-hee to his children.

Making public a document containing what they say were internal Samsung guidelines for bribery, they said Lee himself ordered the bribery of judges, prosecutors and journalists. Prosecutors seem wary of launching an investigation, saying they will make a decision after watching a second press conference by the Catholic organization on Monday. But experts say the prosecution will have to investigate if material evidence is presented.

At the heart of the allegations are slush funds operated by the nation’s largest conglomerate. Kim and the group claim Samsung has W1 trillion in secret funds and bribed politicians and other influential figures with it. The corporation is also accused of giving more illegal campaign funds to presidential candidates in the 2002 presidential election. Kim told a daily the illegal campaign funds came from the company’s slush funds, not from chairman Lee’s private coffers. A public investigation of the campaign funds could be launched if Kim presents material or circumstantial evidence to back up his claims.

If so, one question will be whether Samsung gave more money to the camp of President Roh Moo-hyun than has already been disclosed. An investigation at the time concluded Samsung gave W32.47 billion to the Grand National Party campaign but a mere W3.6 billion to Roh’s camp.

The CPAJ has disclosed what were allegedly Samsung’s internal bribery guidelines given directly by Lee. In the document, Lee suggests giving hotel gift certificates to those who refuse to take cash bribes. The Samsung Group says the remarks were taken out of context, and claiming that the Samsung chairman directly ordered bribery was a “distortion.”

Kim claims he himself manipulated evidence and testimony in the trial of executives of the amusement park and quasi-Samsung holding company Everland, sued in 2000 on charges of selling convertible bonds to the tycoon’s children at a knock-down price in an apparent attempt to pass on the group leadership. Evidence proving the claim could prompt a new investigation and questioning of Lee.

(englishnews@chosun.com )

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