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Kim scandal shows Asian links have benefited both political parties

March 23, 1997

LOS ANGELES (AP) _ The summer after the riots of April 1992 laid waste to hundreds of buildings here, blacks and Korean-Americans squabbled bitterly over who was getting more government reconstruction money.

Blacks ``are a bigger minority group and they are more visible,″ Robert Park, a director and former vice president of the Korean-American Coalition, an advocacy group, said then. ``We haven’t been around too long; we don’t have one Korean representative in Los Angeles County.″

That was about to change. That November, Jay Kim was elected the nation’s first Korean-born congressman, a Republican representing parts of Los Angeles, San Bernardino and Orange counties.

Last year he comfortably won a third term. Yet Kim, once a rising GOP star, has been dogged since his first term by a fund-raising scandal that grew directly out of Korean-Americans’ craving for more political clout.

Five companies based in South Korea have pleaded guilty to laundering donations to Kim, and two Korean-Americans were indicted on related charges. The 3 1/2-year-old investigation ``is at Kim’s doorstep,″ one law enforcement source said, speaking on condition of anonymity.

Seo Kuk Ma, Kim’s 1994 campaign treasurer, is to stand trial April 15 on charges he collected and laundered contributions from several firms and hid them from federal authorities. The first man indicted, Hyundai Motor America executive Paul Koh, was acquitted last year of laundering corporate donations in 1992.

The Kim case, coming as scrutiny of the links between Asian money and the Democratic Party intensifies in Washington, shows a similar cloud hangs over at least one Republican.

It also underscores the causes of the Asian money affair that has deeply embarrassed the Democratic Party: a sense of political isolation voiced by Asian-Americans.

More than $1 million collected by John Huang, the Democrats’ chief fund-raiser in the Asian-American community, is being returned because of questions about its origins.

In the Kim case, Hyundai Motor America, the automaker; Daewoo International America, a shipping and electronics concern; Samsung America, an import-export company and corporate cousin to Samsung Electronics; Haitai America, a food distributor; and Korean Airlines all admit they illegally funneled campaign donations through employees.

The five firms have paid fines totaling $1.6 million.

Under federal law, corporations and non-citizens are barred from contributing to federal candidates. It’s also unlawful to make donations in the name of another person.

Kim, 58, a civil engineer and former councilman in suburban Diamond Bar, has said he didn’t know the contributions were illegal, but he’s been contradicted in court documents by his own 1992 campaign treasurer.

Jane Chong, the former treasurer, also told FBI investigators that Kim’s wife, June, kept lists of the companies and the amounts they gave and asked Chong to destroy computer records of donors.

The investigation is creeping steadily closer to Kim, the law enforcement source said, but he declined to speculate whether grand jurors would indict Kim if prosecutors asked. But the statute of limitations on felonies is five years, which means prosecutors must act by this summer if they believe Kim was involved in money-laundering.

Prosecutors say some of those involved in the fund-raising scheme were so intent on sending their man to Congress that they ignored the law. It was the early 1990s, when Korean-Americans, like Asian-Americans nationwide, felt politically impotent, even as their population was swelling, say observers.

Americans of Asian descent had doubled in number from 1980 to 1990, and grown even faster in Los Angeles County, said Stuart Kwoh, executive director of the Asian Pacific American Legal Center in Los Angeles.

Further spurring Asian political involvement were growing attacks on immigration, welfare and affirmative action, Kwoh said.

Then came the acquittals of four white Los Angeles police officers charged in the beating of black motorist Rodney King. Three ensuing days of riots and fires left 55 people dead and $1 billion in property damage. Blacks, reacting to years of what they considered rude, discriminatory treatment from Korean shopkeepers, destroyed or damaged more than 100 Korean-owned convenience stores.

In July 1992, 2 1/2 months after the riots, a group of South Korean business executives known as the Korea Traders Club of Los Angeles hatched the laundering plan, prosecutors allege.

The club devised a plan by which corporations and foreign citizens would contribute to the Kim campaign ``in a manner that would prevent them from being detected by U.S. government authorities,″ according to a plea agreement Daewoo signed in April 1996.

``The plan provided for member companies to make their contributions to the Kim campaign through and under the names of individual employees who were United States citizens or permanent residents,″ the agreement states.

Kim attended the meeting and was the featured speaker, according to court documents.

B.J. Lee, then the club’s chairman, denied in an interview that any scheme to launder donations was discussed. The Korean business leaders, he insisted, simply wanted to show solidarity with the people of devastated Koreatown, to rally Korean-Americans at a time when morale had hit bottom.

``At that time all the Korean community is heated up with the possibility of one Korean-American politician like Jay Kim,″ Lee said. ``That is one of them. At that time the Korean community generally believed they were isolated in this country. Kind of a real minority. Economically OK, but (not) socially. That’s including politics.″

The prospect of sending Kim to Congress, he said, restored Korean-Americans’ faith that ``as Americans they can have American dreams.″

Today, Lee describes the federal probe and indictments as ``a very good experience, I think, learning about American election law.″

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