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The National Tax Service began a special investigation into the DAS auto parts company by sending 40 staff members to seize account books and computers from the company’s headquarters in Gyeongju, North Gyeongsang Province. The photo shows the entrance to the DAS headquarters on Jan. 5. (Yonhap News)
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Sources say the actual amount is higher than the original $11.2 million that was reported
The total amount of the DAS slush fund discovered by the team of investigators into the BBK scandal led by Special Prosecutor Jung Ho-yeong was well above 12 billion won (US$11.2 million), according to several sources at the prosecutors. This conflicts with Jung’s statement on Jan. 5 that no funds were discovered other than the 12 billion won, suggesting that Jung may have been caught in a falsehood. Jung closed his investigation in 2008 without making public any information about the amount or usage of the huge slush fund he had uncovered. “The amount of the total DAS slush fund that the special prosecutors’ team investigating BBK turned up in 2008 was much larger than 12 billion won. I’m talking about what came out in the investigation, not the claims or estimates of people formerly connected with DAS,” a source with the prosecutors told the Hankyoreh on Jan. 8. “The total amount of the DAS slush fund was above 12 billion won. The special prosecutor and his assistant were not telling the truth when they claimed after the prosecutors recently launched their investigation that 12 billion won was the total amount. There appear to be some people who want to nail down the total to 12 billion won,” another source with the prosecutors said. The question of whether the DAS slush fund exceeded 12 billion won appears to be directly connected not only to the criminal penalties that those implicated may face, but also to the statute of limitations for the charges that will be filed in subsequent investigations. Some allegations are being raised that there were slush funds under different managers or channels aside from the 12 billion won that was managed by the accountant surnamed Cho and then transferred to the DAS bank account after the BBK special investigation. Some argue that if the total amount of the DAS slush fund turns out to have been above 12 billion won, there should be an investigation not only of Jung, the former special prosecutor, but also of some current high-ranking prosecutors. One person who might come under the microscope is Park Jeong-sik, director of the Busan High Prosecutors’ Office, who essentially supervised the DAS investigation under Jung. This is also prompting questions about when the prosecutors will call Cho and Kim Seong-u, former DAS president who holds the key to the allegations about the creation of a slush fund, in for questioning. How much extra money was in the slush fund? It was at the end of 2012 that the Hankyoreh reported for the first time that Jung had confirmed the creation of a slush fund at DAS but had not investigated it. “In January and February 2008, the special prosecutor tracked a wide range of bank accounts at DAS and confirmed that a slush fund worth between 13 and 15 billion won had been created during the five years from 2003 to 2008,” the Hankyoreh said in its report, based on the testimony of multiple individuals who had participated in the special prosecutor’s investigation. These allegations were swept under the carpet with little effort to verify them after Park Geun-hye was elected as president at the end of 2012, but a fresh investigation was launched last year when People's Solidarity for Participatory Democracy and other activist groups filed new complaints after a handover of power. But the complaint by these groups and reports in the media around that time specified the amount of the slush fund as being 12 billion won, and the special prosecutor and his assistant echoed these media reports when they claimed on Jan. 5 that they had not discovered any money other than that 12 billion won. But the prosecutors who are currently investigating this case have never disclosed the precise amount of the slush fund. The sources who told the Hankyoreh about the slush fund said that it was contained between 13 to 15 billion won, which suggests that the extra money in the fund would amount to at least one billion, and maybe as much as three billion won. Considering that sources with the prosecutors have recently used the expression “much higher,” investigators may find that the amount is even more than that. The 12 billion won that has been mentioned in the press thus far, according to some analysts, “is the total estimate based on the money managed by a single person in charge of the slush fund, namely the accountant surnamed Cho, and then transferred to DAS after the special prosecutor’s investigation. This should not be seen as the exact amount of the slush fund.” Can the extra money extend the statute of limitations on the slush fund? This is something the prosecutors will deal with down the road, but another reason the extra funds are attracting attention is that they are directly linked to the criminal investigation that may ensue. The greatest headache faced by the prosecutors in this investigation is the statute of limitations. There is little disagreement that the statute of limitation on the charge that Jung was derelict in his duties as special prosecutor will expire on Feb. 21, 10 years after the events in question. The statute of limitations for the individuals involved in creating the DAS slush fund, on the other hand, could change, depending on how the prosecutors’ investigation plays out. A revision of the Criminal Procedure Act on Dec. 21, 2007, extended the statutes of limitation for various crimes, and the statute of limitation for creating a slush fund at DAS (presuming the charge is embezzlement) is 10 years prior to the revision and 15 years after the revision. If the money at DAS was embezzled prior to the law’s revision, the statute of limitations has already expired. This would present an obvious difficulty for the prosecutors who are looking into the individuals who are implicated in the embezzlement at DAS. But if the prosecutors determine that this embezzlement continued even after Dec. 21, 2007, they gain some leeway on the statute of limitations, making it easier to convince the main figures involved to testify. At the moment, it seems likely that the 12 billion won in funds that were managed by Cho were embezzled before the law was revised. This forces the prosecutors to look into the possibility that work continued on building the slush fund even after Dec. 2007. By Kang Hee-cheol and Seok Jin-hwan, staff reporters Please direct questions or comments to [english@hani.co.kr]
