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South Korean Governor Arrested

July 16, 1999

SEOUL, South Korea (AP) _ A former finance minister closely allied to South Korea’s president was arrested Friday on charges he took a bribe from a local banker.

Lim Chang-yuel, 56, governor of the populous Kyonggi Province surrounding Seoul, said through his lawyer that the $83,000 he received from the banker during his 1998 election campaign was a political donation.

But prosecutors say Lim took the money with a promise to lobby the central government, which moved to shut down the banker’s heavily indebted Kyonggi Bank last year.

When the bank was closed despite Lim’s alleged lobbying, the governor returned the money to the banker, they said.

On Thursday, prosecutors arrested Lim’s wife on charges of taking $333,000 from the banker in exchange for her husband’s influence.

``The investigation is not over. We will expand our probe from different angles,″ said senior prosecutor Yoo Sung-soo at the district prosecutor’s office in Inchon, a port city west of Seoul.

Yoo indicated that Seo Yi-seok, former head of the now-defunct Kyonggi Bank, may have given money to more politicians and government officials when the government moved to close nine heavily indebted local banks last year.

Prosecutors also were investigating whether Lim and Chu bribed politicians on behalf of the banker, Yoo said.

The investigation came on the heels of a series of ethics scandals that has battered the image of President Kim Dae-jung’s government. Two Cabinet ministers have been fired in the past two months in connection with those scandals.

Kim’s ruling coalition government moved to distance itself from the disgraced governor and demanded that Lim resign.

Before his election in June 1998, Lim served as a finance and economy minister, negotiating a record $58 billion bailout package from the International Monetary Fund for South Korea’s crisis-hit economy. In return, South Korea promised banking and other reforms.

Seo was arrested last month on charges of taking kickbacks in return for doling out loans to businesses.

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