[30 Years of New Military Regime Slush Fund Suspicion] Jeon Uwon "Black Money" Kim Oksuk "Memo"... Is Pandora's Box Opening?

Will Former and Roh's Political Funds Pass to Their Families?
No So-Young Reveals Memo on "30 Billion Won Slush Fund"
Court Acknowledges Existence of Slush Fund
Prosecutors Review Whether to Recover Criminal Proceeds

As suspicions grow that the so-called 'New Military Group slush funds' of former Presidents Chun Doo-hwan and Roh Tae-woo still remain, efforts to uncover the truth are becoming active. In the political sphere, it has been decided to summon the family of former President Roh as witnesses at the upcoming National Assembly audit next week, and the prosecution is considering launching a full-scale investigation into the slush funds.

These movements are closely related to testimonies and suspicions that the New Military Group slush funds have been passed down to their children. Chun Doo-hwan's grandson, Chun Woo-won, attracted public attention last May by stating, "Looking at the various businesses run by family members, there must be at least several tens of billions of won," and expressing doubts about why investigations have not been conducted on other grandchildren.

[Image source=Yonhap News]

Recently, demands have also arisen to reveal the truth behind the slush fund of 30 billion won and the 14.7 billion won donation to the East Asian Culture Center, which surfaced during the divorce lawsuit between SK Group Chairman Chey Tae-won and No So-young, director of the Art Center Nabi, known as the 'divorce of the century.'

In the political arena, it is estimated that the slush funds, which are old cases and could not be recovered due to the death of related persons or lack of evidence, amount to hundreds of billions of won. Criticism that the descendants of these funds continue to maintain their status as wealthy figures in Korean society has given credibility to the need for reinvestigation and recovery of the hidden assets of the New Military Group family.

The New Military Group Slush Funds That Failed to Be Traced

Former President Jeon Du-hwan is leaving his residence in Yeonhui-dong, Seodaemun-gu, Seoul, to attend the first trial sentencing hearing for defamation of the deceased at the Gwangju District Court on the 30th. Former President Jeon was charged with defamation for criticizing Father Jo Bi-o, who testified to witnessing helicopter gunfire during the May 18 incident, in his autobiography, calling him "a shameless liar unworthy of being called a priest." Photo by Kim Hyun-min kimhyun81@

Former Presidents Chun and Roh, who seized power through two coups centered around the private military organization Hanahoe within the Republic of Korea Army, collected political funds from companies in various ways.

At the first trial held in February 1996 regarding the creation of slush funds, former President Chun shocked the public by stating, "When I took office, I did not take money from companies, so companies were anxious and could not sleep at night, and they had no investment motivation and only thought about fleeing abroad," and added, "I think companies paid money out of a kind of patriotic duty."

Former President Chun is estimated to have created slush funds amounting to about 350 billion won, but the court ordered a confiscation amount of 220.5 billion won. At the time of his death in November 2021, 95.6 billion won remained unpaid, and after additional confiscation posthumously, the final unrecovered amount reached 86.7 billion won.

According to investigations and trial results on the slush funds, part of the funds passed to Chun's family. In August 1992, Chun personally handed 23 long-term credit bonds worth 100 million won each (2.3 billion won) to Park Hye-sook, the mother-in-law of his daughter Hyo-sun, at his residence in Yeonhui-dong. He gave his older brother Chun Ki-hwan 15 million won annually for living expenses from the time he took office until his arrest, and regularly provided 45 million won for apartment purchases and 3 million won monthly for living expenses to his aunts Kim Pil-moon and Kim Sang-moon, financially supporting about 1,000 relatives.

The real estate holdings of former President Chun's family are also considerable. As of January 2023, the real estate owned by the Chun family in the Seoul metropolitan area, including Pyeongchang-dong, Itaewon, and Paju, is estimated to be worth 25.3 billion won. Chun Won-sik also revealed that these assets were illegally formed, including the safe at the Yeonhui-dong residence, Sigongsa (Jeon Jae-guk), Jun Artville (Jeon Jae-yong), and the Napa Valley winery in the United States (Dana Estate).

[Image source=Yonhap News]

Former President Roh is reported by the Supreme Prosecutors' Office Central Investigation Department (now the Anti-Corruption Department) to have created slush funds amounting to about 460 billion won. The court confiscated only 268.2 billion won of this amount. The remaining funds could not be recovered due to unverified sources.

Former President Roh claimed he had no more assets to pay and engaged in legal battles over slush fund confiscation for seven years from 2007 to 2013 with his younger brother Roh Jae-woo and brother-in-law Shin Myung-soo. At that time, Roh Jae-woo exposed the hidden assets of Roh's son Roh Jae-heon, and Shin Myung-soo demanded division of assets from the divorce between Roh Jae-heon and Shin Jeong-hwa, stating he would return the funds to society but suddenly paid the slush funds, leaving unresolved suspicions.

Slush Funds Revealed in Divorce Lawsuit

Former President Roh's slush funds resurfaced through his daughter's divorce lawsuit. This was because the appellate court officially recognized the existence of previously undisclosed slush funds. At the core of this is the 'Kim Ok-sook memo.'

In the appeal trial, Director No stated, "300 billion won of Roh Tae-woo's slush funds flowed into SK," presenting a 'memo' left by her mother Kim Ok-sook as evidence. This was essentially an admission of the existence of illegal funds to demand property division. SK denied that any slush funds had flowed in, but the appellate court recognized the existence of the slush funds based on the memo and No So-young's testimony.

[Image source=Yonhap News]

The memo, secretly kept by Ms. Kim, lists amounts alongside specific names, including 'Seonkyung (SK) 30 billion won,' 'Chairman Roh 15 billion won,' 'Chairman Shin 10 billion won,' 'Lee Byung-gi 5.2 billion won,' 'Safe 1.01 billion won,' and 'Annex 500 million won.' It is presumed that there are more hidden funds.

Chairman Chey appealed to the Supreme Court, stating, "There is a judgment that SK's growth was achieved through illegal slush funds and that the business was expanded under the halo of the Sixth Republic, but this is not true."

If former President Roh gifted 30 billion won to former Chairman Chey, confiscation under current law would be difficult. This is because if prosecution cannot be initiated due to reasons such as the death of the criminal, even illegally accumulated assets cannot be confiscated or seized.

On the other hand, if the 30 billion won was a debt entrusted or owed, it would become inherited property and thus subject to taxation. According to Article 26 of the Framework Act on National Taxes, if a taxpayer evades inheritance or gift tax through fraudulent acts, inheritance or gift tax can be imposed within one year from the date the tax authorities become aware of the inheritance or gift of the property.

The prosecution has received related complaints, assigned the case, and is reviewing the possibility of starting an investigation. On the 19th of last month, Lee Hee-gyu, chairman of the Korea Senior Welfare Association, submitted a complaint to the Seoul Central District Prosecutors' Office requesting an investigation into the authenticity of the '300 billion won slush funds' of former President Roh Tae-woo, which surfaced during the divorce lawsuit between Chairman Chey and Director No. The complaint reportedly requests investigation into allegations of slush fund concealment and tax evasion involving Chairman Chey, Director No, Ms. Kim, and Roh Jae-heon.