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This page is graphically intense with long load times due to photos. However, the photos and narratives by the men who served at Osan Air Base makes the wait well worthwhile. The opinions expressed are those of the author and in no way represents any official statement of Osan AB or the USAF. 
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LEE MYUNG-BAK: PRESIDENT WITH CONSERVATIVE ECONOMICS?Lee Myung-bak is the former Mayor of Seoul and member of the GNP. Checkered past with allegations of campaign abuse, but allegations appear as partisan bickering. Lee Myung-bak, a former Seoul mayor. Mr. Lee, called "The Bulldozer," has an image of a hands-on, bricks and mortar kind of fellow. He earned his spurs as an executive at the construction arm of the Hyundai Group; he was elected to the National Assembly in 1996 and cemented his no-nonsense city-builder image as mayor from 2002 until the middle of last year. Largest claim to fame is the restoration of the Cheonggyecheon Stream. He renovated the Cheonggye Stream in the city's center, turning it into an urban park, and reformed the city's public transportation system. He wants to bring on the bulldozers on a national scale as well, championing a canal to run the length of the peninsula.
Lee's childhood portrays Korea's turbulent modern history. His impoverished parents had moved to Osaka, Japan, during the Japanese colonial occupation of Korea which lasted from 1910 to 1945. Lee was born in the Japanese city in 1941, where his father worked as a herdsman. Following Japan's defeat in World War II and Korea's liberation in 1945, his family returned home, and Lee spent most of his childhood in Pohang, a port on Korea's southeast coast.In Mar 2006, Lee's approval rating plummeted after allegations were raised that he had the free use of a public tennis court in return for business favors. Though the fees were paid by an anonymous donor, the cloud lingered over Lee's head over this seemingly trivial affair. Despite the affair, Lee still was well-thought of by constituents because of the Chyeonggyechun Stream project that has brought so much media attention to the area. For the 31 May 2006 elections, Lee stepped down as Seoul mayor paving the way for his run for the presidency. In May 2006, he had fallen from the front-runner amongst presidential hopefuls to third. In July 2006, after Park Geun-hye had stepped down as Chairman and replaced by Kang Jae-sup, the Lee Myung-bak faction saw the Party Presidential Nomination process to their disadvantage and attempted to change the rules. Although Park Geun-hye, former chairwoman, won the competition for the "supreme manager" of the presidential candidate race, the committee, whose role is to check and balance, was still left to be constituted. Lee Jae-oh, GNP supreme council member and Floor Leader, complained of the fairness of the presidential candidate race. Lee argued, "There was a structural limit to a fair party convention as one person had been controlling the party and the supporters in charge of the central party and local branches for a long time. We first need to constitute a fair competition committee with those we can trust." His underlying intention is to transfer the authority of presidential candidate race management to the committee -- instead of Park Geun-hye. It means that the "rules of game," including how to organize the electoral group, can be changed through the fair competition committee. According to the current party rules, the electoral group is constituted with 20 percent delegates, 30 percent party members, 30 percent general people, and 20 percent poll results. The ratio of party members and general people is half and half. Kang Jae-sup argued it was not the right time to change the rules and viewed a change in the constitution of the party was needed instead.. Members close to former Seoul Mayor Lee Myung-bak stepped up calls to allocate more votes to general public outside the party. They want "an open primary," in which all voters are eligible to cast ballots regardless of their party affiliation. Under the party's statutes, party delegates and registered members account for 50 percent of the voters, while the other half are non-member ballots. Lee's rival, Rep. Park Geun-hye and her supporters wanted to retain the current rules, which were revised last year under her leadership.  Seoul Mayor Lee Myung-bak In Jan 2007, things started getting nasty within the GNP ranks as Lee Myung-bak stated that anyone without children should not be President -- aimed at Park Geun-hye who is not married and without children. (SITE NOTE: Of course, this is patently ridiculous as Presidents throughout the world have been without children -- and what does having no children have to do with education or anything?) In response, Park Geun-hye fired back that people who have "evaded" serving in the military should not be President. Lee did not serve as he was exempted due to a respiratory condition. (SITE NOTE: Again what has this to do with qualifications to be President?) The mud-slinging had begun in earnest as the Uri Party was on the verge of dissolution and Goh Kun had dropped out of the race in Jan 2007. At that point, Lee held the lead in the popularity polls -- but so did Goh when he entered in 2006. In Feb 2007, the allegations made by a former legal advisor to Rep. Park Geun-hye against former Seoul Mayor Lee Myung-bak was swept off the table as not worth investigating. Park claimed that she told Chung not to pursue the matter several times. But Chung claimed the people needed to know of Lee's lack of ethics. Chung In-bong, a lawyer and former GNP lawmaker, submitted to the party's organizing committee for the primary election documents -- mostly newspaper clippings -- that raised questions about the integrity of Lee Myung-bak. The documents showed Lee violated the Election Law in the 1996 National Assembly elections. Lee was elected as a lawmaker in 1996. His aide at the time, Kim Yu-chan, said Mr. Lee spent more in campaign funds than he reported. Mr. Lee then urged Mr. Kim to flee to Hong Kong. The Supreme Court convicted Mr. Lee of election violations in 1998. Mr. Kim was also convicted in a separate case on the same election violation charge. Mr. Lee was fined 7 million won ($7,500), and Mr. Kim was fined 3 million. Neither served time in jail. However, Mr. Lee lost his Assembly seat in 1998 after the Supreme Court convicted him of the election law violation and of urging Mr. Kim to flee so he could avoid the charges. The party decided not to conduct an investigation into Chung's allegations as it had already been investigated with a conviction. Lee's side stated that even knowing about the 1996 case, the public still elected Mr. Lee as mayor of Seoul in 2002. However, it took back its initial response after Kim Yu-chan, a former aide to Mr. Lee in 1995 and 1996, came forward and admitted Lee had bribed him to perjure himself. On 20 Feb, Kim Yu-chan claimed he took 125 million won ($135,000) to lie during an election violation case. (NOTE: The Korea Herald said he received 120 million won ($128,000) from Lee in exchange for perjuring himself in the trial in 1997 and 1998.) Mr. Kim said he took the money in payments, starting in 1997, in return for perjuring himself on the stand. Mr. Kim himself originally brought forward the election law violation case, making the surprise revelation then that Mr. Lee had spent more campaign funds than he publicly reported in his 1996 National Assembly election race. Shortly after making the revelation, however, Mr. Kim left for Hong Kong, leaving behind a note saying his comments about Mr. Lee's violations were untrue. Mr. Kim said last Friday that he left for Hong Kong because Mr. Lee urged him to do so -- after he received $18,000, according to court transcripts. He returned the next year, in 1997, for the trials. Mr. Kim that Mr. Lee's aides arranged the perjury. "Mr. Lee's aides told me to say this and that at court for Mr. Lee," Mr. Kim said. "I know I am responsible for the perjury, but now I am telling the truth." Mr. Kim said he was planning to make more revelations soon against Mr. Lee in a book that he has tentatively called the "Lee Myung-bak Report." He plans to reveal details of Lee's morally questionable relationships with women and his acquisition of property, in the book to be released late February or early March. Former Seoul mayor Lee and former GNP chair Park showed a 2.9 percentage point drop and 2.5 percentage point drop in Feb 2007, respectively. Gallup attributed the drops to the recent spat between the two over alleged wrongdoings. (NOTE: Though no action was taken by the GNP because of the damage it would do to its image, the act has placed the fact before the public as the media reported it widely -- though initially NOT mentioning anything about the conviction in their coverage of Lee's campaign. This says something of how the media views politicians as corruption is accepted -- but only becomes interesting when mud is being flung. Chung initiated the allegations of Lee's "lack of morality" with the purpose publicizing Lee's ethical suitability for President. Lee and Park have been competing to win the GNP's ticket to run in the Dec. 19 presidential election. Since last October, Lee has topped polls with a more than 40 percent approval rating followed by Park with about 20 percent.) In Apr 2007, with Lee ahead in the polls, the sniping between Lee and Park heated up. The GNP tried to change the rules of the nomination process for the GNP with both Lee and Park proposing different processes. After the chairman of the GNP backed Lee's proposal, Park hinted that she may remove herself from the nomination process -- an indication that she might run as an independent -- though she denied this. On 11 May 2007, Lee became the first of the GNP to officially his running for the presidency. Lee Myungbak criticized the current administration's unconditional economic and humanitarian aid and claimed the ROK must help the economic development of the communist nation instead of providing exhaustive support. He suggested that if DPRK abandons its nuclear weapons, the ROK would help them achieve a national per capita income of $3,000 within 10 years. He claimed that it would be possible through aggressive aid in collaboration with the international community; once Washington first remove Pyongyang from its terror-sponsoring nation; but Park criticized this plan that, in order to receive the help of international community, the DPRK must recover its trust from the international community, but it would be very difficult. Lee added that the DPRK had asked to reach $5,000 and stressed the fact that DPRK has shown interest in this plan. Lee also stated he would make a meeting place for dispersed families at the DMZ since this way, DPRK would not need to feel uncomfortable for coming down South, it would save a lot of costs, and more people would be able to meet their separated families. Lee's Canal Plan Ridiculed In May 2007, there was opposition to Lee's canal plan to construct a canal to run the length of the peninsula. Park Geum-hee attacked the plan as a waste of money. In June 2007, with Lee Myung-bak refusing to accept Park Geun-hye's demands for Lee to withdraw his pledge for a cross-country canal, which is a key plank in his campaign platform, debate over the proposed canal was heating up. The Park faction states that such a cross-country canal is not needed and it would take 60-70 hours for cargo to travel from Seoul to Pusan. The Lee faction states it would take 24 hours and would greatly enhance the economy. The government issued a report against such a canal, but it was held up from public release for unknown reasons in May 2007. Then a "draft" of the government report was leaked in June that claimed the project was not economically feasible. Lee's faction immediately pointed the finger at the Roh administration as Roh was still attacking Lee despite a ban from NEC. The NEC launched an investigation. The revision report on the Seoul-Busan canal from the Korea Water Resources Corporation is identical to the 37 page document disclosed by the press except in the name of writer on the cover and a line in the conclusion written by the Ministry of Construction and Transportation.. Lee Suspected of Hidden Wealth On 5 Jun 2007, a rumor by a GNP lawmaker circulated that Lee Myung-bak had created a trust fund of some 800 billion won (about $850 million) in the name of his relatives. Rep. Kwak Sung-moon said in a radio interview that he had received such information which he claimed was ``valid.'' However, Kwak had no evidence to substantiate the rumor. Park Geum-hee supporters stated that it had nothing to do with the rumor, but since the financial status of Lee will come out in the campaign, he should make his finances clear. The GNP is accusing Lee of double-talk when addressing the questions. Lee stated he had no land under other people's names, but the GNP stated he didn't say if he had land under his family or relatives names. By 6 Jul the rumors of Lee's land speculation with his brother and brother-in-law were rampant. Though he has repeated denied any wrong doing, he continues to remain under attack. Further accusations have been made that Lee used his power as governor of Kyonggi Province to increase the value of his real estate. Though Park Geum-hee does not support these rumors, she stated that Lee should reveal his finances -- which in turn continues to fuel the controversy. Lee asked his brother to reveal his finances, but his brother stated that his finances had nothing to do with politics. Lee has accused President Roh of releasing information to inflame the accusations. Most of the attacks by the Uri Party legislators appear unfounded. Lee Myung-bak's brother-in-law Kim Jae-jeong (58) filed a libel case against GNP lawmakers Yoo Seung-min and Lee Hye-hoon, former lawmaker Seo Cheong-won, and the Kyunghyang Daily newspaper, which said he was involved in real estate speculation. Former GNP Chairwoman Park Geun-hye declined on 11 Jul to offer an apology for raising suspicions over her rival Lee Myung-bak's link to dubious property deals. Park confronted Lee with her suspicions that he is the true owner of lucrative property that was registered to his brother-in-law, Kim Jae-jeong. In return, Kim filed defamation suits against Park Geun-hye. He refused to drop the case even though the GNP and Lee camp demanded him to do so. On 12 Jul, the Seoul Central District Prosecutors` Office investigated the defamation suit over leaked government documents detailing Lee`s real estate practices. On July 11, it said that the Prosecutors' Office found that 10 people accessed Lee's personal information by analyzing information given by the Ministry of Government Administration and Home Affairs, the Ministry of Construction and Transportation, National Tax Service and the Korean National Policy Agency. The information accessed for the last three years was mostly Lee's criminal records. The prosecution is investigating who accessed them and why, and if any of them were leaked outside. The prosecution is considering asking the National Intelligence Service to submit related information in order to get to the bottom of the so-called 'Lee Myung-bak X-file leakage.' Prosecutors said proceeds from the sale of land in Dogok-dong, southern Seoul linked to Grand National Party frontrunner Lee Myung-bak were invested in a company he also has ties to. Lee has been accused of concealing his assets by registering the land in the names of his brother and brother-in-law, but Lee Sang-eun and Kim Jae-joung insist they were the actual owners and purchased and sold it together. But prosecutors on Wednesday said they have evidence that a man named Lee Young-bae, an asset custodian both for the presidential hopeful and his brother, put the brother's share of W10 billion (US$1=W932) from profits of W26.3 billion from the land sale in a low-interest long-term insurance policy in December 1995 and provided the principal as collateral to borrow several billion won. The loans then went to a company linked to Lee Myung-bak, according to prosecutors. However, Lee Young-bae, the custodian, refused to appear for questioning on a summons and the investigation stalled. By releasing the interim results, the Prosecutors have seriously impacted on Lee's campaign. In Aug, Park's camp was focusing on the land issue, believing that the investigation results will corroborate their own allegation that Lee is a less-than-solid candidate and the matter could prove an eleventh-hour variable in the primary. Lee had a 10 percent lead in opinion polls. Prosecutors said proceeds from the sale of land in Dogok-dong, southern Seoul linked to Grand National Party frontrunner Lee Myung-bak were invested in a company he also has ties to. Lee has been accused of concealing his assets by registering the land in the names of his brother and brother-in-law, but Lee Sang-eun and Kim Jae-joung insist they were the actual owners and purchased and sold it together. But prosecutors on Wednesday said they have evidence that a man named Lee Young-bae, an asset custodian both for the presidential hopeful and his brother, put the brother's share of W10 billion (US$1=W932) from profits of W26.3 billion from the land sale in a low-interest long-term insurance policy in December 1995 and provided the principal as collateral to borrow several billion won. The loans then went to a company linked to Lee Myung-bak, according to prosecutors. However, Lee Young-bae, the custodian, refused to appear for questioning on a summons and the investigation stalled. By releasing the interim results, the Prosecutors have seriously impacted on Lee's campaign. In Aug, Park's camp was focusing on the land issue, believing that the investigation results will corroborate their own allegation that Lee is a less-than-solid candidate and the matter could prove an eleventh-hour variable in the primary. Lee had a 10 percent lead in opinion polls. In Nov 2007, Lee stated while campaigning that he would give up his personal wealth if elected President. He stated all he needed was a house to live in after he retired. Whether this rhetoric was all for show or not, is yet to be seen. It does not have any binding force -- though his opponents may want to make it an issue. Cheong Wa Dae Files Libel Suit (Oct 2007) Cheong Wa Dae continued "waging a war" against Lee Myung-bak. In regular daily briefing sessions Cheon Ho-seon, Cheong Wa Dae spokesperson, criticized the former mayor for the Lee camp's accusations regarding the government's political maneuvering and his campaign pledges on taxation -- calling it "Imprudent political libeling." On 20 Oct the Seoul Central Prosecutors' Office issued a subpoena to Lee Myung-bak and three other GNP party leaders for questioning as part of a libel investigation. Many experts say the prosecution's measure may spark political conflicts between the GNP and the prosecution since it is rare for the prosecution to summon a presidential candidate of the opposition party ahead of the presidential election. President Roh Moo-hyun`s secretaries filed a suit on 7 Sep against Lee Myung-bak, Chairman Lee Jae-oh, floor leader Ahn Sang-soo, and senior party member Park Gye-dong over the GNP`s allegations that the presidential office was masterminding a scheme to damage Lee`s campaign. The prosecution also summoned an administrator of the presidential secretariat as the representative of the accuser on 28 Sep. The GNP position is that the party already handed in a request to probe the National Intelligence Service, the National Tax Service, and Cheong Wa Dae, which allegedly collaborated to raise suspicions over Lee's real estate transactions. As the investigation is underway, the libel case (proposed by the presidential office) should be dealt with after the ongoing investigation. Thus the GNP has in effect refused the prosecution's request to question Lee. After Lee was elected, the transition team made it very clear that they wanted all paperwork intact and would not tolerate any shredding of documents. It seems apparent that once the Lee administration would take office, it was going to attempt to track down the depth of the Cheong Wa Dae involvement in the persecution of Lee. Political In-fighting Damages GNP (Jul 2007) In Jul, the infighting between Park and Lee continued. As allegations of Lee's involvement in land deals continued, his lead in the polls started to slip -- narrowing the margin between he and Park to under 20 points. However, because the fighting between the candidates were so intense, when Lee won the primary, the split could not be healed. It had gone past being politics, but had become personal. In addition, Park also sensed that Lee was going to ursurp her role in the GNP leadership once in power -- and this indeed proved true when he became President-elect, he stated that some would have to make "sacrifices" for the sake of the party. This would impact on the April 2008 elections where the GNP was expected to win a landslide victory as well -- and Lee's actions would undercut Park Geum-hee's power base. LEE WINS GNP PRIMARYPresidential hopeful Lee Myung-bak defeated rival Park Geun-hye by a narrow margin on on 20 Aug to win the Grand National Party's nomination to run for the 2007 presidential race. Following the results of the vote, the "battle" between Lee and Park, which has dragged on for over a year, came to an end, while the GNP geared itself up for the presidential race. But the fact that Lee defeated Park by a mere 2,452 votes (1.5 percentage point difference) may serve as an obstacle in uniting the two rival camps within the GNP. The GNP presidential candidate selection procedures included a vote of some of its party membership and the factoring in of a public opinion poll. Park Geun-hye won the party vote, but was held back by the opinion poll, and so Lee Myung-bak emerged as the winner. Park congratulated Lee on his win and vowed to return to being a GNP party member working to bring about a change in government -- BUT she did not openly support Lee Myung-bak's campaign. To the end of the election process, Park supported Lee as the GNP candidate, but never gave him her personal endorsement -- at the same time rebuffing all of the liberal candidates enticements to support them.The progressive ranks were in disarray, and Lee enjoyed a commanding lead. However, in October the progressive strategy seemed clear. They were going to attempt the same smear campaigns that led to the defeat of the GNP candidate in 2002 -- along with alliances at the last minute to increase their share of votes. However, this time they chose the "BBK" scandal as their rallying point. To an outsider this smacked of government interference as a special effort was made by the government agencies to investigate -- including illegal search of documents -- wire-tapping and other means to find dirt on Lee Myung-bak. The investigation still was on-going as the presidential elections neared. In addition, the progressives drew the battle lines based on ideological lines painting the GNP as the party of the rich and business. Even President Roh -- who had been censured twice for electioneering -- reentered the fray in Oct to make disparaging remarks against Lee. Candidate Chung Dong-young is attempting to turn the campaign debate into an ideological battle, and President Roh seems to be trying to back him up. However, Roh's choice was Lee Hae-chan, the man previously hand-selected to succeed him, but who failed in the UNDP primaries. Along the way Chung Dong-young alienated himself from Roh -- calling for Roh's resignation from the Uri Party and distancing the Uri politics from Roh -- and there were hasty attempts at fence-mending. In Oct Roh finally endorsed Chung for the presidency. Chung and Lee differed on support of Chaebol's operating their own banks and views of economic growth. Lee was for the chaebol's entering the financial markets, while Chung was opposed. The Korean Chamber of Commerce and Industry (KCCI) stated that the separation of financial and industrial capital is a policy that restricts industrial capital, including that of conglomerates, from being invested in a bank for ownership. The separation of financial and industrial capital should be relaxed, and a growth-oriented policy should be implemented. Meanwhile, the Bank of Korea is opposed to the idea. Lee Myung-bak dismissed Chung Dong-young's proposal for a public debate on key national issues and values. Ex-Seoul Mayor Lee, is well known for his blunt word choices, while Chung, a former MBC anchor of the nightly news, is widely known for his political rhetoric. The GNP stated that Chung still is only one of three progressives vying for the presidency so it would be inappropriate at this time. Observers note that Chung is attempting to push Lee around through a series of debates, in turn building an image of himself as a qualified leader with vision and specific plans for the economy. Previously, the former unification minister characterized his rival Lee as an advocate of the upper class and a ruthless neoliberal pro-business candidate. Lee responded that Chung is a candidate of rhetoric with no content. GNP spokesman Park Heong-joon said that Chung was attempting to divide society into two opposite groups to unify liberals and to motivate undecided voters to join an ideological debate. Chung Dong-young said he is the candidate for low-income families and for peace on the Korean peninsula. Chung continued to focus on his slogan regarding the ``upper 20 versus the lower 80'' as his key campaign issue. The Chung said his rival Lee Myung-bakwas a candidate for the top 20 percent of the population, while he represented the remaining 80 percent. He portrayed the GNP as "brutal conservatives" versus the UNDP as "peace-loving progressives." On 25 Oct, Lee Myung-bak slipped slightly -0.2 percent to 50.1, while the progressives except Rhee In-je moved up slightly. In order to blunt comments of his contributions to the demise of the Uri Party, Chung admitted that he bore some responsibility for the failures of the Uri Party. Of course, as he resigned after the defeat of the Uri Party in Apr 2007, he has to do so -- especially since he's trying to take the bows for the Kaesong Industrial Park creation. A last minute worry for the Lee Myung-bak camp was the persistent rumors that Lee Hoi-chang would reenter the race. A group of supporters for Lee Hoi-chang planned to hold a rally calling for Lee's run for the Dec. 19 presidential election on 23 Oct -- though Lee Hoi-chang stated that his position was as before that he was not running. The move comes amid speculations that Lee, former chairman of the GNP, could participate in the presidential race as an independent if Lee Myung-bak becomes crippled by the BBK scandal. This would effectively split the vote and weaken Lee Myung-bak's position. In order to attempt to offset Lee Hoi-chang's potential bid, Lee Myung-bak offered an olive branch to Park Geum-hee to solicit her support. However, Park refused to meet with Lee. Though Lee Myung-bak still has the lead, the 20 percent support for Lee Hoi-chang has cut into his commanding lead. There is a quandary over how Lee Myung-bak will solve this crisis. Lee offered to share the power with Park on 12 Oct -- meaning the selection of candidates for the April 2008 elections -- as a peace offer. On 8 Oct, Lee Myung-bak won approval ratings of 37.9 percent, late entrant Lee Hoi-chang 24 percent and United New Democratic Party's Chung Dong-young candidate 13.9 percent in a survey conducted immediately after Lee Hoi-chang announced his third presidential bid. Lee Myng-bak's approval ratings were practically flat since the last poll on Oct.31, when he scored 38.7 percent. Chung witnessed a 3.2 percentage point drop in his support ratings, while Lee Hoi-chang saw a surge from 19.1 percent to 24 percent. Korea Herald reported on 12 Nov that Park Geun-hye, former GNP chairwoman, offered her support to the party's candidate Lee Myung-bak -- sort of. "I remain unchanged in my view that the party must win the election, and I will do my best to help," Park told reporters. She added "it is not right for Lee Hoi-chang to compete again." Park stopped short of using the term "support" for Lee Myung-bak and appeared negative about Lee's earlier offer of regular three-way meetings with her and GNP chairman Kang Jae-sup -- a proposal that appeared to assure her of the party leadership if Lee is elected. She also appeared to blame Lee Myung-bak at least in part for Lee Hoi-chang's defection from the party. It seems the ex-party chairwoman, Lee Myung-bak’s arch-rival in the party primary, wanted to leave herself room for maneuver depending on whether the suspicions are cleared and what the candidate’s camp does next to seek party unity and reform. BBK SCANDAL (Oct 2007 -- On-going)Lee Denies Involvement in BBK (Oct 2007) Lee Myung-bak stated he had no shares in BBK, but the GNP stated the question was whether he exerted managerial control in BBK. However, on 18 Nov his extradited ex-partner, Kim Gyeong-jun (Christopher Kim), claimed that Lee was the owner of all companies involved in the BBK scandal. A special investigation team at the Seoul Central District Prosecutors' Office investigated whether Lee was involved in the scandal. Lee was suspected of being implicated in the stock price-fixing of Optional Ventures and of concealing assets because his relatives allegedly held DAS in proxy for him. The allegations come from the UNDP. Kim has claimed all companies involved were in fact owned by Lee. Kim was questioned on 18 Nov. The prosecution summoned Kim Sung-woo, the head of DAS, to ask questions about why his company invested 19 billion won (US$20.4 million) in BBK. Kim reportedly told the persecution that GNP candidate Lee had nothing to do with his company's investment in BBK. (SITE NOTE: When asked what the mysterious abbreviation BBK means, Kim during the investigation answered "Bank of Bahrain and Kuwait", insinuating involvement by Lee Myung-bak, who has good connections in the Middle East. But prosecutors concluded it is actually a combination of the initials of Kim, his wife Lee Bo-ra and Bobby Oh, who are promoters of the company.)According to a February 2006 disclosure statement, Lee has assets worth 17.9 billion won, including land worth 608 million won under his wife's name as well as buildings he owns worth 16.5 billion won. Lee's 48 percent share in LK-eBank, worth 3 billion won, was part of his assets. LK-eBank was founded jointly by Lee and Kim Gyeong-jun (Christopher Kim), the founder of BBK. BBK is an affiliate of LK-eBank. After Kim was suspected of embezzling 38 billion won, he fled to the United States in December 2001 with a forged passport, when the authorities were looking into an alleged market manipulation involving Optional Ventures. Kim's company BBK retained a majority of Optional Ventures shares at that time. Kim was arrested in May 2003 at his residence in Beverly Hills and was ordered to be extradited the following year, but he filed an appeal to resist being sent back. Kim is one of the co-founders of BBK, a now-defunct asset management company established in 1999. Lee Myung-bak also was a co-founder. Kim allegedly had floated rumors that the company would be acquired by a foreign company, misleading investors who helped raise the company's stock price. After Kim was suspected of embezzling 38 billion won, he fled to the U.S. on a forged passport in his dead brother's name and has since remained. The business partnership between Kim and Lee lasted for one year and the partnership ended after the nation's financial supervisory body concluded Kim made false accounting reports in 2001. (NOTE: In 2001, Kim illegally entered Korea on five occasions on a forged passport in his dead brother's name.) When the Financial Supervisory Service revoked the license of Optional Ventures Korea on March 8, 2002, a company employee called up Chris Kim who had already fled to the U.S., and informed him that the prosecution had frozen the company's bank accounts. Chris Kim then called the employee back and ordered him to send all documents and records related to him and his wife over to the United States. The employee went straight to a warehouse run by a delivery service company in Gyeonggi Province. Chris Kim had stashed all the documents and the company safes there. He feared shareholders would storm into his company, learning about his fraud.Lee was cleared by the GNP investigation, but politics led to the involvement of the prosecution to investigate the entire case. Lee claimed he did not know of Kim's alleged scam and denied being involved in company management. In Jun 2007, when these old charges were resurfaced, Lee decided to let this storm blow over by saying he encouraged his accusers to investigate the matter and to clear up the matter. On 22 Jun the GNP candidate verification committee said that there was no evidence to support charges that Lee Myung-bak was involved in real estate speculation. Kim Gyeong-jun (Christopher Kim) first got arrested in May 2003 in the Los Angeles area and ordered extradited in 2004. In October 2005, he was ordered to report to Korean authorities. In response, Kim filed a habeas corpus petition, citing a pending civil action. But on 8 Oct 2007, he voluntarily dismissed his appeal. In Oct 2007, the 9th Circuit Court of Appeals in San Francisco approved a request filed by Kim Gyeong-jun (Christopher Kim) to withdraw his appeal against his repatriation. Formally, Kim is under investigation for allegedly embezzling nearly 40 billion won (US$45 million) from BBK, which he founded and served as president, while manipulating stock prices and claiming that one of his companies was about to get a huge infusion of foreign funds.Joongang Ilbo on 25 Oct reported that a hearing with the potential to embarrass presidential front-runner Lee Myung-bak was still on track before the election in December, as a US court denied Lee's motion to keep a former business partner facing criminal charges in Los Angeles. The US Attorney said that Lee's claiming that the extradition was politically motivated was "inappropriate." The U.S. Ninth Circuit Court of Appeals' decision means that Kim Gyeong-jun, currently in detention, is likely to arrive in the ROK in late November. The Ministry of Justice said it was notified by the South Korean embassy in Washington on 31 Oct that U.S. authorities approved the extradition of Kim Gyeong-jun. It says Kim will be handed over to South Korean authorities in Los Angeles for a trip to Seoul -- at about mid-November. In Washington, it proved to be a no-win situation. If they approved the release, they stood to possibly alienate the future President of Korea. If they didn't, they would be accused by the UNDP of playing favoritism towards Lee. Expectations were that Kim will be in Korea perhaps a week before the election. When Kim arrived in Korea, the prosecution planned to book and arraign him within 48 hours. Then it would look into various allegations involving Kim, including the manipulation of Optional Ventures' stock price, and DAS's investment of 19 billion won in Kim's company BBK. DAS has been owned by the brother and brother-in-law of Lee Myung-bak. Kim is a legal fugitive and wanted by the Seoul Central Prosecutors' Office. Kim will also be questioned as a material witness in a case arising out of candidate Lee's alleged ownership of DAS shares under a third-party name. Currently the US has garnished approximately $23 million of Kim's funds, but will return $400,000 to be used for legal fees. Since he fled to the US in 2001, Kim reportedly examined documents and records related to BBK and the firm Optional Ventures. The DA's office expects Kim to produce some of the documents to support his allegations, for example, that GNP candidate Lee was involved in the price manipulation. If his allegations were proven to be true, the documents would significantly affect the future investigation. Legal experts expect that Kim will produce documents such as a copy of, if any, a secret written agreement with Lee attesting to Lee's ownership of BBK, instruments showing how and why Lee's brother and brother-in-law invested 19 billion won in that company, and/or transcripts of his conversations with Lee. The United New Democratic Party has voted to hold a hearing after Kim returns. The party wants Kim to testify about alleged irregularities involving the now-defunct firm BBK in order to embarrass Lee Myung-bak. UNDP lawmakers have claimed the GNP nominee was involved in stock manipulation and money-laundering as he co-headed the asset management firm. The Prosecution is conducting its own investigation. UNDP lawmaker Kim Jong-yull told reporters he would offer testimony on the scandal and submit relevant pieces of evidence, and urged the GNP to fully cooperate with the investigation. Analysts on the UNDP side predict that the stock manipulator will be ready to cooperate with the prosecution in return for lighter criminal charges. According to them, Kim is expected to provide evidence that he colluded with the GNP nominee in the stock manipulation and that Lee is the co-owner of the fund in question. Prosecutors hoped to conclude the investigation before the Dec. 19 election. The investigation seemed to be the play of last resort for UNDP standard-bearer Chung Dong-young to boost his lackluster popularity. To minimize the harmful impact on the election, authorities have tracked relevant banking transactions regarding the allegations. Based on those records, they will question Kim and determine whether or not his documents support his allegations.The situation was confused in late October. The Hankyoreh on 26 Oct claimed that a brochure "proved" that Lee was involved in the BBK and that he had used a credit card for the BBK. In addition, it was reported that Lee supposedly had not authorized his lawyers' in the states to prevent extradition -- but this seems to be less than credible given his actions to not stop the move. The GNP and Lee's aides are very worried about the impacts. This strategy is the same that was done by Roh in the 2002 elections against his opponent. In anticipation, the UNDP is making plans to have Lee testify before the National Assembly to make the most of the smear technique. On 18 Nov, Kim Kyung-jun (Christopher Kim) was arrested on charges of stock price-fixing. The 41-year-old Korean American was extradited to Seoul on 16 Nov. Kim was charged with manipulating the stock price of Gwangun Venture Business Inc before it became Optional Ventures Korea when he took it over; diverting W38.4 billion of company funds into the accounts of an American paper company; and fleeing to the U.S. with a forged passport in December 2001. The warrant charges consist of three parts, apparently the same as those on the Korean government's request to the U.S. government for his extradition.
Kim embezzled an extra 9.1 billion won according to prosecutors. He nominally returned 1.1 billion won to DAS, Inc. in November 2001, and 2.4 billion won to Sim Tech, which were not previously detected by the law enforcement agency. Further, Kim paid 5.6 billion won as severance fee to a former American CEO in March 2002. (SITE NOTE: Prosecutors stated that investigators "confiscated a DVD of the movie 'Boiler Room' from the former president's desk in the Optional Ventures office. "Boiler Room" was released in the U.S. on Feb. 18 in 2000 and in Korea in October. The movie won the Jury Special Prize at Deauville Film Festival. It is directed by Ben Younger and stars Giovanni Ribish, Vin Diesel, Ben Affleck and Nia Long. The movie's story is nearly identical to the scam. Kim set up Optional Ventures when BBK folded due to forged investment reports. The paper company used to swindle people out of their savings in the movie is called Med Patent Technologies -- a name Kim gave to a bogus company he set up in the process of stock manipulation. And Kim used the name of one of the stars of the movie, Giovanni Ribisi, for a fictional representative of the bogus company. Prosecutors believe Kim also copied the ingenious stock manipulations in the movie that make it look to gullible small investors as if the shares are performing miraculously well. In the movie, Seth Davis, played by Ribisi, gets rich by manipulating stock prices to make his investors paper millionaires overnight before the stock plummets to nothing. Kim himself embezzled a whopping W39 billion (US$1=W923) in less than a year from investors in the scam. Seth in the movie buys a big house and five luxury cars including a Ferrari and Porsche with his ill-gotten gains. Kim purchased two houses in Beverly Hills and a Mercedes. In "Boiler Room", Seth slips away when FBI agents raid his office -- much as Kim disappeared from Korea. (Source: Chosun Ilbo.)) The investigation was known to focus on a photocopy of a Stock Purchase and Sale Agreement in English signed by LKe Bank and AM Papas, a paper company registered as a tax haven. LKe Bank was co-founded by Lee Myung-bak and Kim Gyeong-jun. But prosecutors planned to investigate the circumstances concerning why Kim has pushed for a settlement because the English document presented by Kim does not contain content about a backdoor agreement. Seoul Central District Prosecutors` Office probing the BBK stock price manipulation scandal were NOT likely to announce their findings before November 26, the last day of presidential candidacy registration. Prosecutors are expected to disclose the findings while filing charges against Kim Gyeong-jun on December 5, the day when his arrest warrant expires. But after election registration ends, the next steps in the legal process, such as charging a presidential candidate, will be difficult. The investigation results may not even be disclosed right away. The preliminary report was expected on 25 Nov, but had to be delayed until 5 Dec -- and even then without certainty. The authorities obtained the official seal management files of LKe Bank, which Kim and Lee founded together in February 2000. The prosecution is checking the impression of Lee's official seal on the file with the impression on an agreement in Korean that Chris produced and submitted. On 23 Nov Lee Bo-ra, Kim's wife, held a press conference showing copies of the four side contracts -- three in English and one in Korean bearing Lee Myeong-bak's supposed personal stamp. On 23 Nov, Kim's sister, Erica Kim, stuck to the family's claim that there are four "under-the-table" contracts proving that Lee owned BBK. She said one of the four contracts "is written in Korean and proves that Lee himself owned BBK. It reads in part, 'BBK stocks owned by Lee Myung-bak.' This statement on the contract is affixed with candidate Lee's own personal seal." Asked why she failed to present such important documents to the court before, she said, "For three-and-a-half years, we've fought in court only over the matters related to Optional Ventures," the company whose stock price Kim is accused of manipulating. "It was not an extradition case related to Lee Myung-bak." In an interview with a local newspaper, Erica Kim released original copies of the behind-the-scenes contracts, which allegedly contain candidate Lee Myung-bak`s agreement to sell 610,000 stocks of BBK to Kim for five billion won. The documents were written in Korean on two pages of A4 format and were titled, "the contract of stock-dealing." The Korean-language agreement was written on February 21, 2000, and the three English-language agreements were written on February 21, 2001. The Korean-language agreement was marked with two stamps, one each from Lee and Kim. The English-language agreements were signed by three to five people, including Lee and Kim. Titled "stock sale contract," the two-page, A4-sized Korean-language agreement states that a "seller, Lee Myung-bak," sold 610,000 shares in BBK to LK e-Bank President Kim Kyung-jun for 4,999,995,000 won (US$5,358,822). If the document is genuine, it will mean that Lee was the real owner of BBK until February 21, 2001, as Kim has claimed. On 23 Nov Kim's mother flew in from LA carrying the documents. The Kims claim the documents will show a clear link between Lee and Kim involving the defunct investment firm BBK from which the scandal takes its name, although Kim was extradited on charges relating to a firm he set up after BBK folded called Optional Ventures Korea. Asked why they did not send the documents earlier, they stated they feared that Lee Myeong-bak would alter his signature if the documents were released earlier. The GNP continued to characterize the statements as lies by a family of swindlers. As for Lee Myung-bak's personal seal, which in Korea is widely used in lieu of a signature on certain documents, his campaign committee spokesman Park Hyung-joon said, "At the time, the seal was kept by Kim Kyung-joon." Park also implied the documents may be forged, saying, "We have suspicions about the fact that the affixed seal on such an important contract was not accompanied by a signature." The GNP immediately responded that Lee's seal used on the documents were different from Lee's registered stamp. On 26 Nov, Kim Kyung-jun's legal representative, Oh Jae-won, said that the seal shown in a written agreement that Kim's mother submitted to the prosecution is that of Lee Myung-bak and was proven to be identical with the one on the corporate book of LK-eBank, one of BBK's de facto holding companies. On 5 Dec, prosecutors announced their findings. Senior prosecutor Kim Hong-il of the Seoul Central District Prosecutors' Office in a press conference said his team found no evidence that Lee was involved in the so-called "BBK Scandal" or is the real owner of a company called DAS registered in the name of Lee's brother and brother-in-law that was heavily invested in the defunct investment firm BBK. The two issues and what they could mean for Lee's election prosepects had emerged as the centerpiece of a probe ostensibly launched to indict the business partner, Kim Kyung-joon. Meanwhole, the integrity of the probe has been called into question by a leaked note in which Kim claims prosecutors offered him a lenient sentence if he testified favorably to Lee. According to current affairs magazine SisaIN, Kim gave his mother-in-law a note saying prosecutors offered him a three-year sentence if he made statements favorable to Lee but seven to 10 if his testimany was unfavorable. Prosecutor Kim denied the claim, saying the entire questioning process was recorded and video-taped and conducted in accordance with the law. (SITE NOTE: The note was later called a forgery and the Prosecutor's office filled a libel suit against Kim for damaging their reputation.) On 5 Dec senior prosecutor Kim Hong-il announced the findings of an investigation into a financial scandal centered on the former business partner of Lee Myung-bak. Prosecutors cleared Lee Myung-bak of alleged involvement in an investment scam and charges of asset concealment. They said there was no evidence that Lee was the real owner of dubious investment firm BBK or auto parts company DAS. The office reached the conclusion 29 days after a special investigation team was set up to start looking into the allegations. Kim Kyung-joon, Lee's former business partner who ran BBK and other firms linked to the scandal, was indicted on charges of stock price manipulation and embezzlement centered on a boiler-room operation called Optional Ventures Korea. But prosecutors said they found no evidence that Lee had been involved in or benefited from the investment scam. According to prosecutors, witnesses who had worked for Kim testified that they received their orders directly from the accused. Prosecutors dismissed allegations that Lee had been the real owner of BBK. According to prosecutors, Kim in the course of the investigation changed his testimony and admitted holding a 100 percent stake in the defunct firm. There also apparently exists a memo written by Kim in February 2001 that says he would maintain a 100 percent stake. Prosecutors dismissed documents Kim and his family claimed were under-the-table contracts proving Lee's part-ownership as forgeries. Lee was also cleared of asset concealment in connection with DAS, which is registered in the names of his brother and brother-in-law. Prosecutors said there was no proof that Lee received dividends from DAS or participated in the decision-making process of the company. DAS had invested W19 billion (US$1=W923) in BBK, money Kim claimed came from Lee. Kim was indicted on charges of embezzling W31.9 billion from Optional Ventures from July to October 2001, manipulating the company's stock price, forging seven passports and 19 documents involving the establishment of a U.S. subsidiary. Prosecutors were considering seeking the extradition of his sister Erica Kim, who was suspected of colluding in the embezzlement. Prosecutors decided to ask U.S. authorities to extradite Erica Kim to charge her with complicity with her brother in establishing bogus companies and transferring huge amounts of money to overseas bank accounts. They also planned to question Kim's wife Lee Bo-ra as soon as she returned to Korea on suspicion that she had a direct part in the boiler room scam and management of BBK. But the United New Democratic Party, which had brought a criminal complaint determining the focus of the investigation, has already decided not to accept the investigation results, citing Kim's claim. In an emergency meeting, the UNDP decided to demand a fresh team of investigators start looking into the case again from scratch. It also plans to initiate a bill appointing a special scounsel to probe the scandal. The announcement that the Prosecution had cleared Lee of charges caused other candidates to sit and sputter. Throughout the fiasco, Lee had maintained a 40 percent voter share in the polls, with others falling behind. A survey, conducted by The Korea Times and its sister paper the Hankook Ilbo, on 6 Dec, showed that 40.7 percent of voters support Lee while 17 percent and 16.5 percent support independent candidate Lee Hoi-chang and Chung Dong-young of the United New Democratic Party (UNDP), respectively. Meanwhile, the turnout was predicted to be high at the upcoming presidential election as 92.2 percent of respondents said they will show up to the polling booths while 7.3 percent had no plan to vote. Other polls showed that 47 percent of the voters perceived Lee of wrong-doing during this six-month fiasco, but still supported him in the polls. It was evident that they were more concerned with his ability to "move" things along -- meaning the economy and jobs -- and that the voters had lost complete faith in the progressives. The progressives on the other hand, hoped that the scandal would deal them a hand like it did during Roh Moo-hyun's run for the presidency where false allegations sunk Lee Hoi-chang's bid for the presidency. Now with the prosecution clearing Lee of involvement, all of the candidates had to fall back and regroup. Interestingly, a poll on 6 Dec showed 48.6 percent of respondents have no faith in the prosecutors' findings, as against 46.4 percent who do. Some 47.2 percent supported the UNDP's demand for a special counsel to look into the BBK scandal and Lee Myung-bak's involvement again, while 44.4 percent were against. This was occurring simultaneously as Lee Myeong-bak leaped to a 43.9 percent lead in voter popularity. In response, the GNP launched a counter-attack. The GNP on 7 Dec disclosed a CD containing conversations between one of Kim's American fellow inmates at a Los Angeles detention center and his lawyer, while citing an article of a newspaper. The fellow prisoner told his lawyer about the involvement of high-ranking Korean pro-government officials and their attempt to make a big deal with Kim. According to the English conversations recorded in the CD, Mr. Zigetta, the fellow convict, said, "I think people who seemed to be top level pro-government officials from Korea visited him (Kim Gyeong-jun) from March. Kim told me that things are going smoothly and they proposed him a special deal." "Kim Gyeong-jun told me that he had to testify something he knows in return for a pardon or a lighter punishment," he added. The GNP not only launched its own investigation team to probe the claim, but also called for prosecutors to immediately launch an investigation into the allegations. "The prosecution must dispatch prosecutors to the U.S. at once to find out who visited Kim. A simple examination of the list of visitors to him in the detention facility will suffice to unveil the purported visitors," said Ahn Sang-soo, floor leader of the GNP. (Source: Donga Ilbo.) In an unusual twist, the opposition to Lee Myeong-bak have turned to aid in the legal defense of Kim after two of his lawyers quit. Oh Jae-won tendered his formal resignation to the court after Park Su-jong, apparently felt the political repercussions of the case are too much. But Kim already has a new legal team. He hired two new lawyers with the aid of the camp of independent presidential candidate Lee Hoi-chang. Kim Jung-sool and one other recently visited the accused at the Seoul Detention Center. The United New Democratic Party also set up a team of no fewer than 15 lawyers for Kim. Oh has handed all related documents to Kim's new legal team. Court rules in favor of Lee Myung-bak in libel suit against The Hankyroeh (Feb 2009)A Seoul district court yesterday ruled in favor of President Lee Myung-bak in his libel lawsuit against The Hankyoreh for damaging his reputation by publishing an interview “without making enough of an effort” to confirm the related facts. On August 17, 2007, just months before the presidential election, The Hankyoreh reported in its front and fourth pages an exclusive interview with Kim Kyung-joon, a Korean American businessman who was involved in a stock manipulation scam in 2001 through an investment firm named BBK. During the interview, he claimed that Lee was the owner of the controversial company, prompting the leading presidential candidate to file the suit, seeking 50 million won (US$36,500) in compensation for damages.UNDP Attempts to Impeach Prosecutors who cleared Lee Myeong-bak (Dec 2007) Fighting broke out in South Korea's parliament on 13 Dec as lawmakers clashed over a bill to impeach prosecutors who cleared the presidential front-runner of involvement in a fraud case. A group of pro-government party lawmakers were forced to saw through iron cables to gain access to the National Assembly's main chamber after around 100 opposition politicians barricaded themselves in using tables and chairs. Television footage showed lawmakers from both sides shoving each other and exchanging punches and kicks in an attempt to occupy the podium, as the pro-government United New Democratic Party (UNDP) tried to clear it for a vote on the bill. One lawmaker was carried away on a stretcher after the fight, which left several others injured, according to Yonhap news agency. State prosecutors cleared Lee Myung-Bak of involvement in a 2001 scam allegedly perpetrated by his detained former business partner. The decision removed the last hurdle for the former construction executive and ex-mayor of Seoul, who touts a business-friendly approach to reinvigorate the economy. The UNDP has introduced a bill to impeach the prosecutors, accusing them of whitewashing Lee's involvement in the scam. The bill needs a simple majority of the 299-member legislature for approval and the UNDP has 141 seats compared to the GNP's 128. Other seats are held by minor opposition parties. (Source: Yahoo News.) Chairman of the National Assembly Lim Chae-jung, who had called the plenary session at 2:00 P.M. the same day, proposed a deadline for deliberations to the representatives of both parties right after the incidents, saying, "Please deliberate on the special prosecution bill in the Legislation and Judiciary Committee, the standing committee in charge, by noon December 17." In case the Legislation and Judiciary Committee fails to deliberate on the special prosecution bill by noon December 17, the bill will automatically be presented ex officio at the plenary session, possibly causing another confrontation between the two parties. If the impeachment bill is not transacted by 2:00 p.m. December 15, 72 hours from 2:00 p.m. December 12, when the bill was reported to the National Assembly, it will automatically be nullified based on the National Assembly Act. Meanwhile, the Democratic Labor Party and Democratic Party, which are negative about the impeachment bill but positive about the special prosecution bill, kept an eye on the situation on the plenary session floor. The Lee Myung-bak Special Prosecution Bill defines the following as issues to be investigated: candidate Lee's manipulation of BBK stock prices; ownership of land in Dogok-dong under a borrowed account; the granting of sales privileges regarding Sang-am DMC; privileges granted to the AIG group; disguised employment of his children; and tax evasion. (Source: Donga Ilbo.) Lee Agrees to Fresh BKK Probe After Video Surfaces and President Roh approves Reopening Investigation (Dec 2007) The emergence on 16 Dec of a video clip showing Lee Myung-bak boasting he founded the investment firm BBK, now at the heart of a fraud scandal, has cast fresh doubt on prosecutors' findings in the affair and opened the way for a reinvestigation. President Roh Moo-hyun was first to respond by calling for a fresh probe by prosecutors, who earlier cleared Lee of any involvement. Lee said he will accept a bill tasking a special prosecutor with investigating the stock fraud. The UNDP revealed a video clip which shows Lee saying in 2000 that he established the investment firm early that year. In a snap press conference called by co-chairmen of its campaign committee, the UNDP released the clip, which shows Lee give a lecture at a CEO program hosted by Kwangwoon University on Oct. 17, 2000. "I've recently returned home from abroad and founded an online financial firm," it shows Lee as saying. "To be specific, I founded BBK, an investment consulting firm, in January this year." Lee then adds, "Although BBK only started business early this year, profits already jumped 28.8 percent as of the end of September." (SITE NOTE: Others had said that Lee had also presented business cards listing himself as CEO of the BKK. Lee said that he over-exaggerated a bit in the speech to draw attention to the new business.) Lee told a press conference after an emergency meeting with the GNP leadership he had "nothing to be ashamed of" in the BBK scandal. "I've opposed an independent probe not because I'm afraid but because the UNDP initiated the independent counsel bill for political reasons," he said. But he added, "I can and will accept" an independent probe and asked the National Assembly to deal with the bill in accordance with the law. UNDP spokeswoman Kim Hyun-mi, however, called Lee's decision a "political show to buy time", saying the video clip cast doubt on his innocence and sparked public criticism. She said her party will handle the bill in a plenary session on 17 Dec as scheduled. (Source: Chosun Ilbo.) President Roh Moo-hyun on 16 Dec instructed Justice Minister Jung Seong-jin to use his authority so prosecutors can re-investigate the scandal "to remove public suspicion and restore public trust in the prosecution. The Justice Ministry discussed the re-investigation of the BBK scandal at an emergency leadership meeting 16 Dec. However, the Justice Ministry said on 17 Dec it had decided not to order prosecutors to reinvestigate a financial scandal allegedly involving the nation's leading presidential candidate, as political parties seek an independent probe of the case. As for the BBK bill passed by the UNDP and DP after the GNP walked out, Jung Seong-jin will purportedly point out that the bill is unconstitutional with respect to the limit on court days, and he will also likely deny Kim Kyung-joon's memo which says that prosecutors coerced him. On December 17, instead of exercising his right to direct prosecutors to reinvestigate, he approved the bill and pointed out, "The bill itself contains some problems in regard to the spirit of constitutionality, efficacy and cost." Cheong Wa Dae spokesman Cheon Ho-seon said on December 23, "The BBK bill will be passed at the cabinet council meeting as scheduled for December 26." Rebuffing calls by the Grand National Party to have him veto the legislation, President Roh Moo-hyun and his cabinet on 26 Dec endorsed the appointment of a special prosecutor to investigate President-elect Lee Myung-bak on corruption allegations, including charges he has already been cleared of by an earlier prosecution probe. The legislation, pushed by the liberal UNDP just prior to the presidential election, was designed to wrap up the probe before Lee assumed the presidency on Feb. 25. Roh will had up to 10 days to name the special prosecutor, whose investigation will last a maximum of 40 days. (SITE NOTE: Again Roh shows his failure to grasp what his mouth says. "It is necessary to recover public trust in the president-elect and the prosecution," Roh was quoted as saying. In fact, his approving the special counsel sets up President-elect Lee as being a suspect of public trust and calls the prosecutors incompetent. But again he's been doing this stuff since 2003.) The chief justice of the Supreme Court recommended two candidates to Roh on 3 Jan 2008. Two judges-turned-lawyers were named as candidates for the independent counsel to probe President-elect Lee Myung-bak's alleged involvement in a financial scam. They are Jeong Ho-young, a former Seoul High Court head, and Lee Heung-bok, former chief of the Seoul Central District Court. The Chief Justice tried to find a former prosecutor to recommend, but all refused. Six File Petition Against Special Investigation Bill (Dec 2007) Six people who are likely to be investigated due to the "BBK special prosecution bill" passed at the cabinet meeting filed a petition to the Constitutional Court Friday. They also requested an injunction until the bill is made into law. The petitioners include Kim Baek-joon, a reference of the so-called "BBK financial scandal," and a former auditor of the Seoul Metro Subway; Lee Sang-eun, a heavy stockholder of DAS, a company allegedly owned in part by the president-elect, and his brother; Kim Jae-jeong, the president-elect's brother-in-law; and three employees of the Seoul City government and the Korean German Institute of Technology prosecuted by the ruling party for the unfair sale of Digital Media Center (DMC). On their behalf, two lawyers, Song Jeong-ho, a former Justice Minister, and Lee Seok-yeon filed a petition that claimed, "The BBK special prosecution bill infringes on the equality stipulated by the Constitution, personal liberty, warrants, the right to have a fair trial, and the benefit of doubt." The petitioners pointed out that the bill is the first ever law that targets individuals and disagrees with generality and abstraction of laws, which limits the lawmaking power of the National Assembly. Additionally, they argued that the requirement that mandates references to be subject to investigation is also against the warrant system on the Constitution, and that the bill was not justice because Lee won the elections in a landslide victory, meaning that the public trusts prosecutors. Lawyer Lee said, "As the petitioners have already been prosecuted or investigated as references by prosecutors, and are likely to be subject to special investigation, the basic requirements of directness, self-referentiality, and presentation are met." Jang Seok-hwa, a lawyer, petitioned against the bill and requested an injunction on December 24, but some experts point out that it is hard to recognize any request eligibility because the petitioners are not the subjects of the bill. The Constitutional Court rejected his plea on 31 Dec stating that his rights would not be violated by the action. However, the other six petitioners injunction was still under consideration. The Constitutional Court on 3 Jan promised to "expedite" their decision on the petition. If they decide in favor of the petitioners, the investigation will stop immediately. The Justice Ministry submitted a report to the Constitutional Court arguing that the independent counsel law is unconstitutional. "At the cabinet meeting on Dec. 26, Justice Minister Chung Soung-jin pointed out the unconstitutionality of the law governing the probe," a senior ministry official said on 6 Jan. The Constitutional Court on 10 Jan okayed the controversial law calling for an independent investigation of fraud allegations against President-elect Lee Myung-bak, but ruled as unconstitutional a clause authorizing a special prosecutor to call witnesses without a warrant. The ruling is expected to significantly limit the scope of the probe. The independent counsel has to produce results before Lee's Feb. 25 inauguration without questioning key persons involved if they ignore summons. GNP Submits Revised BBK Bill (Dec 2007) On 31 Dec the GNP has submitted a revision to the bill seeking an independent counsel to look into the BBK stock scandal. The bill, which was proposed by the rival UNDP, aimed to determine whether President-elect Lee Myung-bak had any link to the troubled BBK investment firm. GNP Floor Leader Ahn Sang-soo blasted the existing bill, saying it crossed legislative boundaries. He added that it went against the principle of separation of powers, noting that only the chief justice of the Supreme Court had the right to appoint an independent counsel. In addition, Ahn said the current bill allowed detainment without a warrant and violated the principle of presumed innocence. (SITE NOTE: The chief justice of the Supreme Court reluctantly -- as it is normally the Ministry of Justice's job -- recommended two candidates to Roh by 3 Jan 2008 simply because it was part of the bill. Chung Ho-young (60), former chief of the Seoul High Court, was chosen as the special counsel tasked with probing president-elect. Chung served as a member of the National Election Commission from 2005 to 2006. He passed the bar exam in 1970, but has never worked as a prosecutor.The special counsel would prepare for seven days before starting the investigation. He would have to complete the investigation in 30 days, to be extended for another 10 days.) The revised bill restricts charges involving Lee to two counts: one, ex-BBK chief Kim Kyung-joon's alleged stock price manipulation through the BBK investment firm and its spinoff Optional Ventures; and, two, Lee's alleged money laundering via overseas funds. The GNP will also requested that the Constitutional Court conduct a jurisdictional review on the counsel bill. It called for nullification of the bill. Lee probe in high gear, raids target Seoul land deal (Jan 2008) In a search for evidence linked to President-elect Lee Myung-bak's alleged abuse of power as Seoul mayor, investigators led by an independent prosecutor raided five offices and homes on 18 Jan 2008. They were searching for proof that Lee knowingly awarded a lucrative real estate development project to an unfit company in 2002. Lee is accused of having given preference to the company, named Handok, in the sale of a plot at the Digital Media Center under development in Sangam-dong while serving as the mayor in 2002. Handok operates the Korean German Institute of Technology, "Investigators raided the offices of the Korean German Industrial Park Co. and Jinmyung Jungjin Academic Foundation and three homes of related officials," Kim Hak-geun, an assistant prosecutor on Independent Counsel Chung Ho-young's team, said yesterday after the sweeps. "We confiscated 25 boxes of documents. Three digital data investigators also copied files from computer servers of the two companies." Lee was accused of abusing his power as Seoul mayor by giving favorable treatment to the Korean German Industrial Park, which won a project in western Seoul in December 2002 as part of the city government's Sangam Digital Media City development. The company was given the right to develop a core part of the site by submitting a plan to invite research institutes and companies from Germany to open branches on the site. The company obtained loans by using the land as a guarantee. Deviating from the original investment plan, Korean German Industrial Park built an office-residential building on the site and earned more than 600 billion won ($636 million) by selling the units. Questioning the legitimacy of the business, the United New Democratic Party filed petitions with the prosecution in October to investigate the firm's head, Yoon Yeu-dug, and five city officials. The Seoul Western District Prosecutors' Office handed over its investigation findings to the independent counsel, whose probe is to end before Lee's inauguration on Feb. 25. "At the time, the company had no record of attracting foreign investments. The balance in its corporate account was only 15 won," the liberal party has claimed. The UNDP said building a commercial building was a fraud because the land was to be used for research and development. The party has also accused Korean German Industrial Park of raising slush funds in the course of donating 30 billion won to Jinmyung Jungjin Academic Foundation. The company denied the allegations. (Source: Joongang Ilbo.) U.S. Court Clears Lee of Embezzlement and Lee`s business partner loses damages suit (Feb 2008) A U.S. federal court on 6 Feb ordered President-elect Lee Myung-baks former business partner Kim Kyung-joon and his family to pay about $50 million in damages to investors in his venture capital firm because of his stock prices manipulation and embezzlement. The court in Los Angeles ruled on a damages lawsuit by minor investors in Optional Capital. The action was filed in June 2004 against Kim, his wife and his sister. They claim that the three colluded to manipulate the stock prices of Optional Capital, and misappropriated company funds amounting to 38 billion won ($40 million) in 2001. Kim was indicted late last year on fraud charges. In his first court hearing in Seoul on Jan. 14, he denied all the charges. He said that the stock prices naturally increased, and that he did not embezzle company funds, as most of the money was sent back to the investors. In addition, the U.S. court has ruled that president-elect Lee Myung-bak had no hand in embezzlement by his ex-business partner Kim Kyung-joon. The Los Angeles Federal Court is also overseeing a civil suit against Kim filed by Korean company Optional Capital, the victim of the embezzlement. The court made the ruling on a so-called third-party defendant suit in which Kim asked the court to confirm the responsibility of the president elect in the embezzlement case, as he was also involved in the management of the company. The case is an offshoot of a compensation suit against Kim, his wife Lee Bo-ra and his older sister Erica Kim by Optional Capital, which is seeking US$30 million. (Source: Chosun Ilbo and Korea Herald.) Investigators Grill Lee (Feb 2008) President-elect Lee Myung-bak was grilled by investigators after they had looked into his alleged involvement in fraud and business irregularities at a downtown Seoul hotel on 17 Feb. The Constitutional Court last month approved independent counsel's Chung Ho-young to investigate a number of suspicions surrounding Lee that were raised during the presidential campaign, including his alleged involvement in rigging of stock prices of the BBK investment consultancy. Chung's team is also trying to confirm whether Lee deliberately failed to disclose some of his assets, including an apartment in southern Seoul, whose ownership is yet unknown, thus violating the law regarding civil servants' ethics. Lee was questioned for about nine hours until midnight at his temporary office at Lotte Hotel with investigators focusing on a video-recorded speech at Kwangwoon University in 2000 where he appears to be taking credit for the establishment of the BBK. Chung was not present during Lee's questioning, officials said. The investigators are planning to report its findings on 22 Feb, three days before Lee takes office. The independent counsel has been speeding up its probe of Lee as their mandate of 40 days expires on 23 Feb. However, the team was apparently reluctant to summon Lee to their office in Yoksam-dong, southern Seoul, with his inauguration ceremony just a week away. (Source: Korea Times.) The team apparently came to Lee instead of summoning him because they failed to obtain decisive evidence that could reverse the results of a previous investigation by prosecutors, which cleared Lee of all charges. The special counsel has been investigating for 34 days since it was launched on 15 Jan. He has apparently concluded that Lee had no hand in the management of BBK and a stock-price fixing scheme by his ex-business partner Kim Kyung-joon. He also seems persuaded that there was no favoritism in the DMC project. Questioning Lee's elder brother Lee Sang-eun also provided no evidence that Lee was the actual owner of the land. Prosecutors in a previous probe concluded ambiguously that the land was owned by a "third party" other than Sang-eun and his brother in law, who appear on the documents, but added there was no evidence that was the president elect. The special probe is therefore likely again to clear Lee of the charges when results are announced on 22 or 23 Feb. (Source: Chosun Ilbo.) GAME OVER: Special prosecutor clears President-elect Lee Myung-bak (Feb 200 7) A special prosecutor cleared President-elect Lee Myung-bak of corruption allegations on Thursday, freeing the CEO-turned politician to push ahead with his promised economic reforms. Special prosecutor Chung Ho-young concluded that a slew of allegations raised by Lee's opponents, including Lee's role in a 2001 stock manipulation scam, were groundless. "The president-elect was found to have no involvement in the stock manipulation," Chung said in a nationally televised press conference. The exoneration should enable Lee, set to take office on 25 Feb, to push ahead with his key campaign pledges including a controversial canal project and government reform. It will also give an edge to Lee's conservative Grand National Party in the April parliamentary election race. "It's a good thing that all the allegations were cleared away again and that the new government can have a fresh beginning," Lee was quoted as saying by his spokesman, Joo Ho-young. "I'd like to return my gratitude by serving the people with a sincere heart and dedicating myself to reviving the national economy." The independent probe, legislated by liberals affiliated with outgoing President Roh Moo-hyun, kicked off after Lee's landslide election victory in December. Lee had been cleared of the charges in a pre-election probe, but the opponents said the investigation was "biased." Few expected, however, that the special prosecutor would override the previous findings to declare Lee guilty. He had only 40 days for the politically sensitive investigation, compared to the 105-day mandate given to another special prosecutor now probing the Samsung Group corruption scandal. Also, Chung had no authority to force witnesses to obey summonses, a power usually given to special prosecutors working on complex issues. Under such constraints, the investigators did not question key witnesses and conducted just one face-to-face session with Lee. At stake in the Lee probe were whether Lee collaborated in the share rigging scam using an investment firm called "BBK"; whether he lied about his wealth; whether the Seoul city government, under Lee's directive, gave a lucrative land deal to an unqualified firm; and whether prosecutors acted properly in vindicating Lee in their earlier probe. The special prosecutor reached the same conclusions as the earlier investigators. They indicted Lee's former business partner, Kim Kyung-joon, for stock manipulation, embezzlement of 38 billion won (US$42 million) and forgery. Lee and Kim had jointly set up another Internet investment firm a year before the BBK fraud took place. "The crime was committed by Kim Kyung-joon alone. There's no evidence that the president-elect was involved in the embezzlement or shared in the proceeds," Chung said. Early this month, a U.S. court ordered Kim, a Korean-American now being tried in Seoul for the BBK fraud, to pay a minimum of US$50 million in compensation to his company's stockholders for their losses resulting from the BBK fraud. Independent Counsel Chung Ho-young announced that his team found the president not guilty of real estate speculation, fraud and stock manipulation, among other accusations. With a 38-day probe ordered by the National Assembly, Chung's team found no evidence to link Lee to massive investment fraud involving BBK. The special team also cleared Lee of the accusation that he was the owner of DAS, an auto parts company that made a large investment in BBK. Lee was also cleared of allegations that he had hidden various assets under other people's names, including suspicion that he was the real owner of an expensive piece of land in southern Seoul, and that he benefited from its sale. Questions about Lee's past behavior did not prevent his landslide election victory. With a promise to jumpstart the country's economy, the former Seoul mayor and former CEO of Hyundai Construction & Engineering promised a break with Roh's liberal government that had focused on reconciliation with North Korea and resolving historical issues. The liberals had hoped that the investigation into Lee's past would give them an advantage in the April parliamentary elections. That now looks unlikely. (Source: Yonhap News.) NEW GAME: Payback. Lawmaker indicted as prosecutors target president's accusers (Feb 2008) Days after the Independent Counsel team cleared President Lee Myung-bak of a series of corruption allegations, the Seoul Central District Prosecutors' Office has taken aim at Lee's political rivals from the United Democratic Party. The prosecutors' office announced on 24 Feb that Chung Bong-ju, a member of the United Democratic Party, has been indicted without detention on 23 Feb for election law violations during the presidential campaign. Chung claimed that Lee had colluded with his one-time business partner, Kim Kyung-joon, in an investment fraud involving the failed financial firm BBK. "Chung was charged after he circulated allegations that Lee was involved in financial scandals, including stock price manipulation and embezzlement," said an official on the case who declined to be named. Prosecutors also said they will decide soon whether to punish other members of the UDP. The list includes a former candidate for the presidency, Chung Dong-young, and other incumbent National Assembly representatives, Park Young-sun and Suh Hae-suk, for giving false information to voters about Lee Myung-bak. The Grand National Party filed several lawsuits against them last year. "We demanded they be present at the prosecutors' office, but their lawyers responded that they will send a written statement instead of attending," said an official who declined to be named. "After reviewing the statements quickly, we will make a final decision on punishing them." If the UDP members are convicted, they can be sentenced to a maximum seven years imprisonment and fined up to 5 million won ($5,271). Also, they can be discharged from their positions and banned from running in the legislative elections on April 9. (Source: Joongang Ilbo.) NEW GAME: Payback. Justice Ministry Want to Know Who Saw Kim in US (Feb 2008) The Justice Ministry has received the U.S. prison interview record of Kim Kyung-joon, the central figure in the BBK stock fraud scandal, from the U.S. Justice Department The ministry said yesterday that senior prosecutor Choi Jae-kyung of the Seoul District Prosecutors` Office is investigating the document. Whom Kim met in U.S. federal prison before his extradition to Korea is on the record. A political bombshell is expected if Korean intelligence officials or politicians are mentioned. After the record is analyzed, Kim will be grilled on why he gave up fighting his extradition to Korea. He has refused to appear for questioning, citing his right to silence. "I want the independent prosecutor team, not the prosecution, to investigate me." In addition, prosecutors have summoned a "Shin" who stayed in the same prison as Kim and people close to Shin. Shin said, "I heard Kim is getting help from an unknown official in an executive position who was sent to the Korean consulate-general in Los Angeles, and I know that the official's successor contacted Erika Kim, Kim Kyung-joon's sister." The National Intelligence Service, however, denied the allegation, saying, "We also conducted our own investigation and none of our officials were involved." (Source: Donga Ilbo.) Prosecutors have evidence that the return of Kim Kyung-joon on the eve of the presidential election was planned by Kim's sister, politicians and spy agency officials, a source said on 27 Feb. According to a source with the Seoul Central District Prosecutors' Office, Kim's elder sister Erica Kim, 44, a Korean-American lawyer, played a key role in her brother's return to face criminal charges here one month before the December election. ''We are investigating an allegation that Erica Kim contacted politicians on behalf of her brother, who was detained in the U.S., to arrange his return to Korea,'' the source said. ''We have circumstantial evidence that Erica Kim was in contact with politicians and officials of the National Intelligence Service last year. We are reviewing a plan to seek her extradition to Korea to question her directly.'' According to the source, a cellmate of Kim's in the United States made the allegations. ''Kim told me that two or three National Intelligence Service officials were helping him,'' the man was quoted as saying. ''Kim even gave me their names.'' (Source: Joongang Ilbo.) BBK's Kim accused of trying to pay off witness (Mar 2008) A former employee of Kim Kyung-joon, the one-time business partner of President Lee Myung-bak currently on trial for fraud related to the failed BBK financial company, said yesterday his boss had attempted to pay him in return for favorable testimony in a U.S. court. The 33-year-old man, who once worked at Kim's companies, BBK and Optional Ventures, appeared yesterday as a prosecution witness at Kim's trial session in the Seoul Central District Court. The man said he was offered $1 million in return for his testimony but refused to do so. ''In 2004, the boyfriend of Erica Kim [Kim's older sister] said I would be given $1 million if I testified before a U.S. court in favor of Kim, but I rejected the offer,'' he said. ''Offering me such a large sum means that I would have to commit perjury, and I thought the request was suspicious.'' Before Kim's extradition to Korea in November last year, the witness was convicted of forging U.S. passports and business documents used to establish a corporation in September 2003. He was ordered to serve one year in prison. Asked by the prosecution if he had rejected the offer because he did not want to be involved with Kim any more, the witness said, "Yes." He said the forgery had been ordered by Kim. ''Names of professors from a U.S. university where I graduated and names of actors who appeared in a movie called ''Boiler Room'' were used to forge the documents,'' the witness said. Kim had earlier said that Lee was the actual owner of BBK and the beneficiary of the fraud, but prosecutors have fully cleared Lee of any involvement in the scandal. Kim faces a series of stock manipulation, forgery and embezzlement charges. He has pleaded not guilty and claimed prosecutors are conducting a ''political probe.'' Prosecutors suspected in February that the National Intelligence Service, during the last months of the Roh Moo-hyun administration, might have been involved in the return of Kim to Korea in order to discredit Lee ahead of the election. On Friday, a cellmate of Kim's from a Los Angeles detention facility is expected to testify about the allegation that Kim's sister, politicians and spy agency officials planned Kim's return, which dogged Lee until just before his inauguration on Feb. 25. (Source: Joongang Ilbo.) BBK Kim's cellmate fingers UNDP (Mar 2008) A lawyer affiliated with the United New Democratic Party attempted to bribe a convict on the eve of the December presidential election in return for publicly linking Lee Myung-bak to a massive investment fraud scandal, according to a trial witness on 15 Mar 2008. Kim Kyung-joon, a former business partner of Lee, is on trial. He is accused of stock price manipulation, embezzlement and document forgery. Kim, who operated an investment company with Lee in 2000, fled to the United States in 2001. He was arrested by the FBI in 2004 and extradited to Korea on Nov. 16, 2007. Kim argued that Lee was the actual beneficiary and mastermind of the fraud. The man, only identified as Shin, 50, was Kim's cellmate for one year while the two were jailed in Los Angeles. "I was extradited to Korea in November last year before Kim arrived here to face charges," Shin said. "I was jailed in Daejeon Prison, and a lawyer from the United New Democratic Party [now the United Democratic Party] paid me three visits. He offered me 200 million won [$206,000] in return for keeping my earlier promise to Kim and publicly saying that Lee, then a presidential candidate, was involved in the BBK scandal. The lawyer also promised me I would be paroled and pardoned in addition to the money." The prosecution and an independent counsel both cleared Lee of involvement in the fraud, while indicting Kim. Last month, prosecutors said the National Intelligence Service, during the last months of the Roh Moo-hyun administration, might have been involved in Kim's return to Korea to discredit Lee. "Kim told me that senior Korean officials, including some from the National Intelligence Service, had arranged a deal to question him without detention once he returned to Korea," the witness said yesterday. "He told me that I would be given an attorney free of charge and paroled. He promised to open a bar for me in LA." Kim's lawyer, Park Chan-jong, on 15 Mar refuted the witness' testimony, saying his client has no relation with the UNDP lawyer and did not make such a deal with the witness. (Source: Joongang Ilbo.) 15-Year Sentence Sought for BBK Suspect (Apr 2008) Prosecutors sought a 15-year sentence and a fine of W30 billion (US$1=W976) for former BBK owner Kim Kyung-joon, President Lee Myung-bak's ex-business partner, on charges of stock manipulation and embezzlement. In the final hearing held at the Seoul Central District Court on Thursday, the prosecutors said Kim, who founded and operated the boiler-room operation is suspected of crimes including embezzlement of W31.9 billion of investors' money, stock manipulation, and the forgery and execution of private documents but has shown no remorse nor repaid his debts. Earlier, Kim Ki-dong, a prosecutor at the Seoul Central District Prosecutors' Office, said, "This is a case in which an individual person has made a mockery of the Republic of Korea. Kim made endless false allegations, silenced and blackmailed witnesses, and criticized public prosecutors and a special counsel when his false allegations came to light. He also held state agencies in contempt by claiming that the data compiled in the process of tracking his bank accounts, and even his immigration records, were forged. He ought to be given a heavy penalty." The day ended in an éclat when Kim's defense counsel asked for the removal of judges and walked out of the courtroom, saying the trial was unfair. "Though he is a key witness who can identify who was the real owner of BBK, Kim Baek-joon, a presidential secretary, has not been ordered by the court to take the witness stand,” defense attorney Park Chan-jong said. “The court has also not censured prosecutors, even though they failed to submit files of their investigation of President Lee Myung-bak, whom they questioned over a dinner of beef soup, to the court." The presiding judge rejected the application and continued the trial in absentia. Sentencing will be at 10 a.m. on April 17. (Source: Chosun Ilbo.) (SITE NOTE: Once sentencing is complete, one wonders whether they will go after Kim's sister and Kim's wife who are most assuredly guilty as sin in the collusion that brought about this fiasco. Their interest was that they are protecting their assets in America. If found guilty of being a part of this swindle operation, their assets can also be garnished in the American courts with the latest US laws that allow such actions in foreign courts -- and through a treaty of reciprocity, the same can be true for Korea. Then they can go after their property in the US worth millions.) FINAL SENTENCING: Kim Kyoung-joon (Apr 2008) On 17 Apr the Seoul Central District Court levied the jail sentence on Kim Kyoung-joon, a Korean-American, to 10 years in prison, finding him guilty of stock manipulation and embezzlement. ELECTION DAY (19 Dec)Simmering grievances over economic woes under liberal President Roh Moo-hyun galvanized conservatives and a last-minute political offensive by liberals backfired to produce Lee Myung-bak's apparent massive victory. With 56.8 percent of the votes counted as of 9:57 p.m. (local time), Lee of the main opposition Grand National Party (GNP) secured 47 percent support, or 6.3 million votes, far ahead of his closest contender, Chung Dong-young of the pro-government United New Democratic Party (UNDP), who got 27.5 percent, or 3.69 million votes. "People want to see Lee revive the economy rather than face a probe before his February inauguration," said Kim Sung-joo, a political scientist at Seoul-based Sungkyunkwan University, agreeing that the probe bill backfired and prompted conservative voters to mass their support behind Lee.Voter turnout was tallied at a record low of 62.9 percent of 37 million eligible voters, down 7.9 points from the 2002 polls and 17.8 points from the 1997 election, the National Election Commission said, attributing the general voter apathy to excessive smear campaigns over Lee's alleged involvement in a financial scandal, as well as his overwhelming lead throughout the campaign. Lee is to become the first South Korean president to win a majority vote amid mounting public grievances over skyrocketing property prices, widening economic polarization and rising unemployment under the presidency of liberal Roh Moo-hyun. If officially confirmed as winner, Lee will be inaugurated on Feb. 25 to replace Roh. (Source: Yonhap News.) As of 11.55 p.m. on Wednesday, with 92.8 percent of the votes counted, Lee had won 10,578,817 votes or 48.3 percent, outdistancing his closest rivals by a margin of over 20 points. Chung Dong-young of the United New Democratic Party won 5,810,857 votes or 26.5 percent, and second runner-up Lee Hoi-chang, the breakaway conservative candidate, landed 3,315,617 votes or 15.1 percent. The US and other nations were swift to send their congratulations. However, the one item deals with the tranisition of military wartime control to the ROK that Lee stated he would "renegotiate." Ambassador Vershbow was quick to point out that the date has been set and irreversible. Korea watchers here agree that Lee is right of center, but not an ideologue. In addition, as a pragmatist trained by his years in the business community, his presidential theme is seen as the economic advancement of his nation. They don't see his North Korea policy veering away from that of the Roh administration, as he seeks to continue to engage Pyongyang through the six-party talks. It was anticipated that Lee would attach more conditions to giving incentives to the North -- and the North is eager to maintain inter-Korea relations. TRANSITION TEAM (Dec 2007-Feb 2008)It appeared that Lee prefered "civilian" members on the transition team instead of politicians. The key pending issues with the new administration will be the same as with the outgoing government -- resolving the North Korean nuclear issue, passing the bilateral free trade agreement (FTA) and completing the alliance transformation. Sookmyung Women's University President Lee Kyung-sook was appointed on 26 Dec to head the Transition Committee -- the first women appointed since such body was set up in 1998. Kim Hyong-o, a four-term Grand National Party lawmaker and former floor leader, becomes vice chairman. The president-elect named GNP lawmakers Yim Tae-hee and Joo Ho-young as his chief secretary and spokesman.When President-elect Lee appointed Lee Kyung-sook as the committee chairman, the GNP saw her as a figurehead. Particularly, when Kim Hyung-o, the four-time lawmaker, was selected as the vice-chairman of the transition committee, many people speculated that Kim would actually lead the committee. As it turned out, Lee took aggressively took control of all the meetings. Lee said, “Above all, we have to hold the higher moral ground for the activities of the transition committee. Based on the framework of leadership for serving people, like the president-elect said, we should set specific policies.” She added, “ We should develop policies that can protect the socially marginalized and ordinary citizens, that can wipe away people’s tears, and that can fit the standard of the public. In the center of those policies stand people.” The Transition Committee consists of one special committee and seven subcommittees. Under the chairwoman, the special committee is tasked with boosting national competitiveness and comprises six taskforces in areas like government reform and deregulation and inviting investment. The working-level subcommittees will deal with planning and coordination; political affairs; foreign, unification and national security affairs; public administration; economic affairs 1 and 2; and social, education and culture affairs. (SITE NOTE: The one thing that Lee will have at least is no outlaws on his transition team like Roh had when one wanted "student dissident" wanted by the police turned up on his transition team.) The presidential transition team has set its agenda for eight policies, including a speedy reorganization of government offices. The eight policies are bread-and-butter issues for low-income and middle-class citizens; restructuring the public sector and government reorganization; attracting foreign investment and promotion of domestic investment; education reform; stabilization of real estate prices; anti-corruption; increasing youth employment; and childcare and welfare for senior citizens. However, foreign and security affairs, including the North Korean nuclear issue and inter-Korean relations, are excluded from the agenda. Six major policies of the Lee administration will also be disclosed to the public by Jan. 24. The policies are: strengthening the science technology sector; stabilizing support for small- and mid-tier companies; fostering new forces for growth; forming an international science business belt; securing energy resources; nurturing environmental business; and promoting Oriental medicine. Transition Team and Streamlining Government President-elect Lee Myung-bak's transition team is planning to work out by mid January a blueprint for streamlining government organizations, which critics say have become bloated during the 10-year liberal rule. New Cabinet ministers have to undergo parliamentary confirmation hearings before Lee is sworn in on Feb. 25. The current 52 central government agencies, including 2 boards, 18 ministries and 10 commissions, will be trimmed down to 39. As part of the aim to move toward a smaller government, they plan to lay off around 7,000 civil servants, including 11 ministers, eight vice ministers and 93 director generals. Two special ministerial posts will be created to take responsible for key government projects. The number of departments in Cheong Wa Dae will be reduced from the current four to one department and one sub-department, and the number of senior secretaries to the president will be cut from the current ten to seven. The overhaul of government ministries and agencies, including abolition and merger of organizations, will be "completed on the basis of national consensus" in the nearest possible future. But the transition team will also pay attention to the morale of government officials, because stability in public officialdom matters. However, it did admit that some public sector jobs will be lost. In this regard, the transition team will begin screening five different reports on the reform of government organizations compiled by scholars and experts. However, later in Jan 2008, the transition team announced the number of ministries is to come down to 13 from 18, resulting in cuts of approximately 39,000 employees. According to the Transition Committee, this will save the government W2.7 trillion. This went against what the committee announced at the beginning, when it said employees affected by the restructuring would likely be moved to other offices. The measure is expected to face opposition in parliament from the United New Democratic Party, whose spokesman called the changes "anachronistic and past-oriented." The common point of the reports is to drastically reorganize and integrate government ministries and agencies by their functions, according to other members of the transition team. One possible example is the merger of the Unification Ministry and the Foreign Ministry, transition team officials said, noting North Korea has become the centerpiece of the nation's foreign policies. The task force wants to reduce the number of government offices from the current 22 ministries and 17 agencies. The Seoul National University recommendation called for cutting the number to 17 ministries by merging some offices. The Hansun Foundation for Freedom and Prosperity suggested cutting the number of ministries to 12, while creating a national strategy planning council which would oversee the Lee administration’s economic policies, the sources said. A final version will be drafted after the two plans are reviewed. Also being considered is streamlining the Finance Ministry, the Planning and Budget Ministry, the Fair Trade Commission, the Financial Supervisory Commission and the Financial Supervisory Service. The Commerce, Industry and Energy Ministry and the Communication and Information Ministry are also being considered for a major change, and the merger between the Health and Welfare Ministry and the Gender Equality Ministry is also likely. In addition, the Ministry of Agriculture and Forestry will be merged with the Ministry of Maritime Affairs and Fisheries and the Ministry of Education and Human Resources Development with the Ministry of Science and Technology. The number of government committees has increased by 156 since Roh took office in early 2003 and the number now totals 416. The figures show that an average 2.6 committees have been established per month during the incumbent government. (SITE NOTE: Lee also appointed the first foreigner, David Eldon, chairman of the Dubai International Finance Authority, to his transition team as co-chairman for strengthening national competiveness. Surprisingly, he stated the ROK government should ease financial regulations as FDI has dropped for three consecutive years.) Kim said the committee is also concerned because some government agencies continue to increase their personnel. “We expect the current government to use prudence in reshuffling senior officials who will continue to work under the next government. We also hope that the government will discuss with us the reshuffling of officials whose terms are guaranteed by law, with less than two months remaining before the presidential term expires." On 2 Jan 2008, Lee hinted as slimming down the Finance Ministry. "I was impressed by the way Japan restructured its Ministry of Finance,” Lee said, from the old Okurasho, sometimes described as the hub of real bureaucratic power in Japan's economy, and an intellectual and political force as well as an economic one, to the modern Zaimusho. In the process of restructuring central government agencies in 2001, Japan replaced the Okurasho that had controlled all functions of budget, finance, taxation, monetary policy, planning, audit and supply, with the Zaimu-sho, a ministry handling only finance, taxation and monetary policy. Lee told committee members to think again if they were planning to promote only the interests of certain government agencies. Some government officials wonder whether that forebodes massive restructuring of the economic ministries. Nothing concrete has been reviewed” in terms of restructuring Korea’s Ministry of Finance and Economy. But another committee member said Lee “is paying attention to what success Japan achieved in government restructuring by drastically downsizing the Okurasho and reorganizing the Ministry of Education into the Ministry of Education, Culture, Sports, Science and Technology, and in abolishing the standardization policy for high schools." He said it was highly likely there will be restructuring in key government sectors such as economy and education, and the new government will downsize agencies, ease regulations, and transfer some functions to the private sector. Lee vowed to reduce government spending by up to 10 percent through his bureaucratic reforms that includes freezing the number of public officials and consolidating government institutions into fewer and larger bodies. In this context, Lee's transition committee is expected to cut or merge at least 60 government agencies from among the current 416. Finding public sector jobs is likely to get tougher due to the incoming governments restructuring plans for government agencies and state-run corporations. With these planned changes, government agencies were expected to have surplus personnel for some time, which the government will deal with by cutting back on the number of recruits next year. However, this years recruitment will go ahead as previously planned, and the government will be hiring approximately 4,900 new civil servants this year, a Civil Service Commission official said. In addition to the central government, Seoul city plans to eliminate 1300 of its staff by 2010, and other regional governments will also be reducing their number of recruits. According to government officials, this years scaling down of the countrys administrative organization is likely to be followed by a widespread reorganization of state-run corporations next year. The incoming government has earmarked several state-funded corporations for privatization and restructuring, while others that have overlapping functions with similar organizations maybe abolished or merged. State-funded corporations that have been mentioned as likely to be either privatized or otherwise restructured include the Korea Electric Power Corp., the Korea National Housing Corp. and the Korea Land Corp. The incoming governments plans for these and other public companies have led to the concerned organizations scaling down or postponing their recruitment plans for the year. Privatization and other measures have also been discussed for other government-run organizations including the Korea Development Bank and the Korea Credit Guarantee Fund. The relevant organizations are also expected to offer fewer job openings in the foreseeable future. The presidential transition committee and the conservative Grand National Party have submitted to the National Assembly 45 bills on government reorganization, which entails cutting the number of state agencies and offices from 52 to 39. The GNP plans to pass the bills when the National Assembly convenes its plenary session on January 28. A partisan clash is expected, however, as the liberal United New Democratic Party and other groups are against certain details of the bills. The big fly in the ointment is that Roh Moo-hyun has stated that he may veto the reorganization bills that have been submitted to the National Assembly. In other words, Lee Myeong-bak wants to reorganize the government and stating that Roh Moo-hyun and Kim Dae-jung's governments were misguided -- BUT he wants Roh to allow it through on his watch. With less than 33-days left in office on 23 Jan, Roh was playing the spoiler. President-elect Lee Myung-bak was known to have asked his Grand National Party to submit his government restructuring bill to the National Assembly without revision. Lee was angry with certain ministries (i.e., Unification Ministry) that were encouraging opposition to the bill or are asking the UNDP to oppose it to ensure their job security. Lee also reportedly asked his party's leadership and members of the Government Administration and Local Autonomy Committee for strong support for the bill. The committee maintained that without the completion of the reform plan, it cannot announce the new Cabinet even after nominations are done. This is because the reform initiative of downsizing the government to 13 ministries and two agencies needs final approval before ministers are appointed. If ministers are appointed under the existing system of 18 ministries and four agencies, state reform thereafter will practically impossible. So Lee and his committee have changed their initial plan to announce ministers and the prime minister nearly at the same time. They will also name the prime minister by the end of the month whether the bill passes or not. and appoint ministers after passage. At the same time, the GNP will accept the UNDP's request that 45 bills on the government overhaul be deliberated by standing committees. Three National Assembly committees were expected to deliberate the government restructuring bill 25 Jan but two of them, the Legislation and Judiciary, and the Finance and Economy committees, were canceled due to opposition from the UNDP. On 25 Jan amid arguments, pleas and failure to reach a quorum, the National Assembly discussed for the first time most of the bills submitted by the incoming Lee Myung-bak administration that would restructure the government. Some of the parliament committees led by Grand National Party lawmakers could not open their meetings because they lacked a quorum. Their political rivals from the United New Democratic Party did not attend to protest the bills. The committees that did open saw heated arguments. The debate was most intense in the Government Administration and Home Affairs Committee. It is reviewing the most controversial bill, to eliminate five ministries. The tension was also high in discussions about the other 12 bills, regarding revisions on laws on such things as public servants and provincial taxes. The UNDP proposed maintaining the Ministry of Unification and the Ministry of Gender Equality and Family. It also suggested renaming the Science and Technology, and Information and Communication ministries as the Education, Science and Technology, and Information, Knowledge and Economy ministries, respectively. Party officials said they think that the transition team's government restructuring plan has flaws, even though they respect its purpose. Even if it passes the incumbent President Roh has stated he will veto it. Refusing to be treated like a “vegetable,” President Roh Moo-hyun said on 28 Jan for the second time that he will not sign a sweeping government reform bill backed by his incoming successor. The plan, which would drastically shrink the government, runs counter to his philosophy and goes too far, he said. “The transition team is exceeding its authority and ordering [my] public servants to evaluate the policies of my administration and then demand that they come up with revisions that suit the taste of the new administration,” Roh said. “The transition team has turned the incumbent president into a vegetable. I ask them to do only what they are allowed to do legally.” It puts the incoming administration in a dilemma because it may have to wait until after the April legislative elections for an Assembly that is expected to be dominated by conservatives. Liberal parties still hold a decisive edge in the Assembly and it is unlikely a presidential veto could be over- ridden. Roh said Lee can wait until he takes office to make changes. There are three scenarios for the incoming administration to reorganize the government, following Roh's comments. Firstly, the National Assembly may pass the bill but Roh will delay signing it into law. In such a case, Lee will endorse the bill after his inauguration and the appointment of Cabinet members. Secondly, President Roh may veto the bill and the Lee administration will be launched without Cabinet members until the general elections on April 9. In June, the new National Assembly will review the bill again. This entails a government vacuum of more than four months ? something unprecedented in the country's history. Thirdly, the Assembly will be unable to pass the reorganization bill. In such a case, Lee will name only key ministers or run the government with vice ministers before downsizing the administration after the general elections. As the inauguration approached, the GNP was trying feverishly to get the reorganization plan passed, but the UNDP had blocked its attempts -- and even President Roh has stated he will veto it if it comes across his desk. During four rounds of talks, parties were unable to iron out differences as the UNDP insisted on keeping the maritime, gender equality, science and technology, and information and communication ministries and the Rural Development Administration. The GNP refused to accept the proposal, insisting that it has already made a big concession by agreeing to retain the unification ministry instead of merging it with the foreign ministry. On 12 Feb, Lee Myeong-bak called the leader of the UNDP Sohn Hak-kyu to attempt to persuade him to support the plan. The president-elect was likely delivering an ultimatum to ensure his bills get passed as soon as possible so he may launch the new Cabinet before he is sworn in on Feb. 25. Sohn told Lee that his party would not accept anything short of keeping the disputed ministries, which the GNP and the president-elect want to merge with other ministries. Lee had backed down on the elimination of the Unification Ministry and realigning the Human Rights Commission as forms of appeasement. However, the situation appears to be that the third option of Lee having a government take office with empty ministry seats -- filled with temporary nominations of ministers. Unless the compromise is made, Lee is considering appointing ministers before the bill is presented to the National Assembly and Cabinet. Grand National Party (GNP) chief policymaker Lee Han-koo said the Presidential Transition Committee will have no choice but to name ministers under the current law. A partial Cabinet would leave void the posts for the four disputed ministries. In addition to the 13 ministers, the president-elect will nominate two ministers without portfolios to manage extra duties. He added their placement could take place after the President-elect takes office on Feb. 25. Confirmation hearings for nominated cabinet ministers usually takes 12 days. The shortest parliamentary confirmation hearing procedures for Lee's Cabinet minister nominees would take up to seven working days, but the bill must be approved by the National Assembly by 18 Feb at the latest. But with the negotiations ruptured, the transition team said it did not yet have plans to request the assembly for ministerial hearings, which had been scheduled by the assembly to begin on 13 Feb. The transition team has asked GNP lawmakers, including the party chairman and floor leader, to make one-on-one contact with opposition legislators to try to change their minds about their stated determination not to compromise, said Lee Dong-kwan, the transition team spokesman. Lee's Grand National Party (GNP) and the liberal United Democratic Party (UDP) are in conflict mainly over the fate of the ministries of maritime affairs and gender equality. The UDP wants to keep both ministries intact while the GNP is determined to close down the Maritime Affairs Ministry. The GNP insists that it has already made a big concession by agreeing to keep the Unification Ministry as an independent body instead of merging it with the Foreign Ministry as earlier planned. The two parties appeared to be close to a deal earlier on 14 Feb, after the GNP agreed on keeping the Gender Equality Ministry and the Rural Development Administration intact. But Lee vetoed the plan later in the day, forcing his party to abandon the deal. Angered by the GNP's change of position, the UDP now also insists on keeping the Maritime Affairs Ministry. Floor leaders of the two parties and delegates from Lee's transition team resumed talks over the weekend, but the outlook for compromise remains dim. Making a last-ditch effort to reach a compromise on President-elect Lee Myung-bak's government downsizing plan, South Korea's rival political parties held a final round of talks on 16-17 Feb. Should the final negotiations fall through, the incoming government will face a shaky start, with critical Cabinet posts left vacant after Lee's Feb. 25 inauguration. Insiders in the transition team said there is a possibility the president-elect could appoint cabinet nominees temporarily instead of naming them as ministers of reorganized ministries. Transition team officials have said that if the rival parties fail to reach a compromise, Lee will leave the post of minister at each of the disputed ministries vacant for the time being, even after his inauguration. (SITE NOTE: If this happens, it can be assured that come April -- when the conservatives take power -- there will be a massive retribution against progressive incumbents in government. There are rumors that if the bill fails to pass, the Lee faction will renege on its promise to keep the Unification Ministry and wait till April to implement its plans. However, it is also certain that the progressives will do everything in their power to impede the Lee administration until they are finally booted out of power. Currently the DLP -- with the aid of the UNDP though not so violent -- is blocking the keystone of the Roh administration -- the passage of the FTA simply because it will allow the DLP and UNDP/DP to score points in the April elections with the farmers and labor.) On 18 Feb, it was reported the Grand National Party made more concessions in a stalled government reorganization plan and agreed with the UNDP to maintain the Ministry of Gender Equality and Family, clearing the way for passage of the bill before the new government is inaugurated. The GNP and president-elect Lee Myung-bak earlier revised the plan and keep the Unification Ministry intact in order to settle the dispute with the majority party. In addition to the ministries of Unification and Gender Equality, the Rural Development Administration and the Presidential Committee on Balanced National Development will also survive. (SITE NOTE: This is really petty. The UNDP is using their power while they have it. After the April elections when the conservatives have the majority, the same reorganization plan will be put into effect. And if they "win" they will still lose as Lee will leave the ministries empty until April allowing the previous deputy ministers to run them temporarily.) It appeared the negotiations were deadlocked on 18 Feb. If the negotiation fails, Lee and his transition committee plan to submit the list of the 15 potential Cabinet members to the National Assembly and work on the parliamentary hearing schedule with the UDP. If the UDP refuses to talk about the schedule, the GNP will go on to have the candidates recommended by the prime minister, according to the Parliamentary Hearing Act. The law stipulates that the hearing may be regarded as complete if 20 days passes after a parliamentary hearing request is made. If the nomination of Han Seung-soo as prime minister is not passed by the National Assembly by then, the GNP plans to have the Cabinet recommended by the nominee as an acting prime minister, or by Han Duck-soo, the incumbent prime minister. On 20 Feb, the GNP and UNDP reached an agreement. Sohn Hak-kyu, the leader of the liberal United Democratic Party, broke the deadlock by agreeing to the abolition of the Maritime Affairs Ministry, one of several agencies Lee wants shut down. Another of those on the hit list, the Gender Equality Ministry, was saved. An earlier compromise saved the Unification Ministry from closure. In return, the presidential transition committee will abolish as scheduled the Information and Communication Ministry; the Science and Technology Ministry; the Planning and Budget Ministry; and the Government Information Agency. The number of ministries will fall to 15 from 18 under the deal and that of agencies will be halved from four to two. The two parties also agreed on 16 Cabinet members, including 15 ministers and one “special affairs” minister. To implement the agreement, parliamentary committees were convened to pass amendments. A full session of the National Assembly will open on 21 Feb to confirm the bill’s passage. Once passed, President Roh Moo-hyun will reportedly sign the amendments into law at an interim Cabinet meeting to be held as early as 22 Feb. Confirmation hearings for the minister appointees will be held on 27 or 28 Feb. Should things go as planned, ministers from the outgoing government will serve in the new administration for a time since President-elect Lee Myung-bak’s inauguration is 25 Feb. President-elect Lee was expected to name Nam Ju-hong as unification minister and Lee Chun-ho gender equality and family minister. An outsider will be appointed special affairs minister, who will handle political coordination and “energy diplomacy.
Universities will be able to select students according to their own guidelines as the incoming administration has made it clear that it will give them more autonomy. The exact timetable for the phased liberalization of the college admission system has yet to be decided. The transition team said that colleges will be given discretion in stages in the selection of students, reaffirming the downscaling of the regulation-oriented Ministry of Education and Human Resources Development. Roh's restriction of press freedom will be reversed by Lee. One of the platform pledges was the elimination of the Government Information Agency all together by merging it under the Ministry of Culture and Tourism. The transition committee made clear that it would reverse the Roh Moo-hyun administration’s decision to close pressrooms. It said that the administration’s press policy goes against the freedom of press and confirmed that the Lee administration would restore press access to the government. For the upcoming restructuring of government agencies, the presidential transition committee plans to abolish the agency by eliminating the functions of public affairs and elements of press control, and by consolidating of the public affairs functions with the Ministry of Culture and Tourism. The Korean Overseas Information Service (KOIS) in an attempt to stay alive came up with two alternative reform plans: 1) to keep the agency for needed PR cooperation and coordination across government agencies; and 2) to maintain the publication service at its current level after consolidated with the Ministry of Culture and Tourism. It opposed plans to dismantle KTV, a state-funded cable television, citing needs to maintain government video archives. The committee decided to merge the KOIS with overseas cultural centers. Failure in agreement between the three parties (GNP, UNDP and DP) on dissolution as of 8 Feb. On 20 Feb, the UNDP agreed to the dissolution of the Ministry of Information and Communication. In Dec 2007, the National Assembly approved the financial reform bill, which has been under heated debate, over how South Korea's conglomerates are being run. The revised financial industry restructuring law will strike at the core of the corporate governance structure which enables chairmen of conglomerates to control subsidiaries with a small portion of stocks, by capping the cross-shareholding of financial and non-financial affiliates at 5 percent. The presidential transition committee, which has been working on the restructuring of government agencies, appears to have concluded a plan to reorganize economic-related ministries, including the Ministry of Finance and Economy (MOFE). If this occurs, the role of MOFE will become similar to that of the defunct Economic Planning Board, as the ministry gains the authority to draw up a national budget bill on top of its existing role of establishing and coordinating economic policies. However, the presidential transition committee has yet to decide whether to allow MOFE to maintain its authority over tax policies. After receiving a report from the Financial Supervisory Commission (FSC), the transition committee also decided to gradually ease regulations which limit the investment of commercial industries in the financial sector. The transition team is expected to gradually raise conglomerates’ current 4 percent ceiling on the ownership of bank shares to around 10-15 percent. However, a follow-up measure will also be implemented to prevent large corporations from wielding excessive influence on banks. The presidential transition team also plans to revise a law related to consortiums in an attempt to allow only consortiums of small- and medium-sized companies of a certain size to acquire bank assets. Past governments have distinguished North Korea from other countries and treated it specially. But the incoming government will not view the North as a separate policy standard and will involve all ministries in dealing with Pyongyang. If the blueprint goes through, the Foreign Ministry will be reborn as a super ministry with functions as foreign policy maker and executor, trade negotiator and link in dealing with North Korea. Furthermore, the president-elect plans to deprive the National Intelligence Service of its negotiating role with the North. If so, that job will also go to the Foreign Ministry, which would then do the job of the presidential National Security Council. The minister will become all-powerful in those areas. However, the blueprint will face strong opposition since it ignores the unique situation of Korea as a divided nation. Some people say North Korea should not be treated as a foreign country. Others are concerned that if all ministries are involved, every one of them could fall prey to North Korean strategies against South Korea. It remains to be seen if the super ministry will really materialize -- some feel the blueprint is a negotiating card in dealing with the United New Democratic Party, which puts great importance on the role of the Unification Ministry. The transition team has asked the Roh administration to curtail agreements that may burden the incoming administration. In response, a high-ranking official in the current administration said, “We will go ahead with the projects as planned because we don’t see any problems with them. There is no deadline for establishing the Northern Limit Line or planned military talks with the North at this point and no businesses are spending money on the North at the moment,” the official said. “The plans with the North will go ahead as scheduled because they just require basic surveys or discussions,” the official said. However, some say it may be difficult to continue with the inter-Korean cooperation projects as scheduled if there is a difference of opinion between the transition team and the current administration. According to the transition team, the Unification ministry admitted there had been no visible reforms in the North and that their policies had lacked effectiveness. The transition team position is that the Unification Ministry has had too much power and there was a high possibility that aid to the North could be given without oversight. The ministry was fighting for its life -- and progressive activists protested outside the transition team headquarters on 6 Jan. In addition, liberal newspaper Hankyoreh has come out against its abolition as well. North Korea's New Year's message implored the South not to disregard the inter-Korea agreements that had been hurriedly made between the Roh administration and the North. Korea Times on 1 Jan reported that the DPRK expressed hope in a New Year's message that inter-Korean summit accords on economic cooperation will be implemented on schedule under the incoming administration. The DPRK refrained from commenting on President-elect Lee Myung-bak and his DPRK policy. However, the Korea Times on 2 Jan reported that Nam Sung-wook, President-elect Lee Myung-bak's DPRK advisor, said that Lee will divide the economic cooperation agreements reached at the inter-Korean summit last October into four categories according to implementation feasibility. The next administration will put big-budget cross-border economic cooperation projects on the backburner until substantial progress is made at the six-party talks on North Korea's nuclear programs, the presidential transition committee said on 7 Jan. "Humanitarian programs such as the reunion of displaced families should be implemented on schedule, but inter-Korean business projects should be linked to progress over the North's nuclear issue,'' a team official said. As a result, large-scale cross-border projects struck during the inter-Korean summit in October in Pyongyang are likely to take a backseat, he said, referring to a ``peace zone'' project to build an inter-Korean business complex in North Korea's Haeju region. Plans to repair outdated roads and railways in the North and expand the inter-Korean industrial park in the North's border city of Gaeseong will also be delayed for the time being, he said. (SITE NOTE: The Roh administration is stating that the agreements do not have any budgetary strings for the National Assembly to approve of AT THIS POINT so they can proceed. However, the incoming Lee administration is saying that it WILL have budgets involved and therefore will require Lee Myeong-bak's approval -- and an assuredly future Conservative National Assembly after April 2008. The Roh administration is also trying to say that the chaebols will fund the agreements -- but nothing could be further from the truth. The chaebols will want government concessions (tax advantages) or subsidies before they proceed.) Korea Times on 30 Dec reported that Rep. Park Jin, the chief of a sub-panel on inter-Korean and security affairs on the President-elect's transition committee, expressed a negative view on establishing an inter-Korean industrial complex in coastal areas near the West Sea. "We need to deal with the establishment of a peace zone in the West Sea in a very careful and measured way because it involves the NLL issue," said Park. "It is problematic for the government to push ahead with the plan without considering the military's point of view." The Minister of Defense -- a former Joint Chief of Staff -- publically stated he would personally not give in on the NLL issue. However, it its waning days, the Roh administration continues to "negotiate" with the North over the peace zone. Supposedly some 200 agreements have been pushed through in the last days of the Roh administration. The incoming Lee Myung-bak government plans to earmark US$40 billion for an international cooperative fund to support North Korea's economic growth. The planned fund is in line with Lee's ambitious plan to help increase the impoverished North's per capita income to $3,000 within a decade IF it makes the bold decision to abandon its nuclear program and open its market. Insiders said the World Bank and the Asia Development Bank can provide help. Under the liberal administrations over the last 10 years, South Korea favored direct aid to the North through its inter-Korean cooperation fund, inviting harsh criticism from conservatives who view the support as lacking reciprocity. The government has an annual budget of nearly $1.0 billion in the inter-Korean cooperation fund aimed at promoting cross-border human exchanges and economic partnerships. The transition team did not clarify its position on the future of the fund. It also underscored the need for a regular meeting of South Korean, the U.S. and Japanese foreign ministers as a channel for closer coordination of pending issues including the North Korean nuclear crisis. In dealing with the communist regime, the Lee administration will push to benchmark the "Helsinki process" -- referring to a 1975 agreement between the U.S. and 34 other Western nations pledging to place their top priority on human rights in dealing with Russia -- then the Soviet Union -- and Eastern Europe. Thus human rights will be a key element in dealings with the DPRK. Joongang Ilbo on 24 Jan reported that Former President Kim Dae-jung had added his voice to a rising chorus of dissent over the incoming administration's plan to abolish the Unification Ministry. The Unification Ministry is a symbol of passion for reunification, he said. Some political observers think Lee intends to use the threat to shut down the ministry as a negotiating tool in the National Assembly session in February when his supporters will try to pass the reform package into law. Lee has denied the speculation. But the backlash is real. Some 140 local experts on the DPRK, including respected university professors of DPRK studies, on 24 Jan released a joint statement to denounce the decision. (SITE NOTE: The again are all these experts are progressives -- but the bottomline is that there will be a fight ahead.) President-elect Lee Myung-bak's transition team and rival parties on 8 Feb reached a tentative agreement to retain the Unification Ministry in the lineup of Lee's incoming government, spokespersons for the team and parties said. The fate of the Unification Ministry, which is in charge of inter-Korean relations, has been at the center of a political confrontation, with Lee determined to close it and four other ministries under his government reorganization bills submitted to the National Assembly last month. The tentative agreements were reached during the second round of negotiations among representatives of the transition team, GNP and UNDP. But the three parties failed to reach an agreement on the closure of other controversial ministries -- gender equality, science-technology, information-technology and maritime affairs. "With rival parties pushing to produce a package agreement, it is too early to say the GNP and UNDP have reached a consensus on Lee's government reorganization bills," a spokesperson for the transition team said. "Both parties appear willing to fully support the inauguration of Lee's government by swiftly passing the downsizing reform bills," he said. Representatives of the three parties are scheduled to hold a third round of negotiations on Sunday, seeking to produce a package agreement, he noted. The incoming conservative government is expected to downsize the Unification Ministry in charge of inter-Korean affairs should the ministry be kept as a separate entity, sources in the presidential transition team said on 17 Feb. The ministry was originally slated to be merged with Ministry of Foreign Affairs and Trade, but stringent opposition from the liberal camp has led to negotiations that may keep it intact. Five presidential commissions will NOT have their mandate extended: the Presidential Committee for the Inspection of Collaborations with Japanese Imperialism, the Truth Commission on Forced Mobilization under Japanese Imperialism, the Presidential Commission on Suspicious Deaths in the Military, the Truth and Reconciliation Commission, and the Investigative Commission on Pro-Japanese Collaborators’ Property. (SITE NOTE: Because the families of the elite have been the targets of the "collaboration" syndrome -- unfairly and in my opinion, illegally, targeting families for the past crimes -- if one could term it a crime as they were citizens of Japan at the time -- of their ancestors. The basis of the witch hunts was revenge and a hatred of the Japanese -- a problem the Koreans have to outgrow. The "truth" committees have been extremely repugnant to me as they represented the subjective "truth" of the Roh administration and progressives -- not the "truth" that is unbiased and objective. Having watched the travesties of justice committed by the Roh administration, I truely believe the next step is holding the committee members accountable for the injustices they committed with the blessing of the Roh administration.) Shutting down or merging scores of government committees are part of the drive to streamline the government. Under Lee's "small and efficient government" principle, the transition team has been hastening steps to streamline the central government and rid it of overlapping functions between government agencies. Under the request of the transition committee, the Board of Audit and Inspection has been inspecting the 416 government committees -- including 28 affiliated with the presidential office and 52 with the prime minister's office -- since Monday. The BAI will report the results of the inspection to the transition committee on Jan. 18. This is the first time for the audit agency to conduct an overall inspection of state-run committees. Government committees are established with the purpose of tuning conflicting interests of ministries, and to providing discussion channels between the government and civil society. But the Roh Moo-hyun administration has often been accused of excessively expanding the size of government, while oppressing the private sector. The number of government officials has increased by 56,000 and that of government committees by 52 during Roh's five-year term, the wages of public officials also increasing by 50 percent. The Roh government has 56 ministries and agencies and 416 committees. "We have been closely observing 65 committees in particular, as they appear to have overlapping functions and unclear purposes," an unnamed official of the audit agency said. "But the final decision of maintenance or abolition of committees will be made by the transition committee." The audit board has been judging the adequacy of each government committee based on the committee's sole function, purpose of establishment, efficiency of budget and human resources management, state of overall operation and appropriate exercise of authority. In order to prevent further expansion of state-funded committees, the transition team also plans to enact a new government committee law this year. Under the envisioned law, committees that have accomplished their goals will be automatically abolished. Transition Team and Incumbent Government President Roh Moo-hyun will delay the replacement of ranking government officials whose fixed tenures are due to expire before the inauguration of President-elect Lee Myung-bak on Feb. 25. The outgoing president's appointments of officials to ranking government posts with fixed tenures have been traditionally regarded as a transgression of political etiquette against the incoming leader. In a media interview in Sep 2007, Lee Myung-bak opposed the appointment of a prosecutor general and chairman of the Board of Audit and Inspection by the current government, but Roh Moo-hyun did it anyway. On Dec. 27, the transition team sent a letter to the Blue House formally making the request, but the presidential office ignored it. On Dec. 28, the Blue House appointed five new senior officials, including members of the National Election Commission and the Board of Audit and Inspection. On 3 Jan, the transition team AGAIN stated that no new appointees should be made, but Cheong Wa Dae stated that the letters should be sent to the ministries. The transition team said it will seek cooperation from the Civil Service Commission, which oversees the personnel affairs of public servants. About 30 posts are due to be filled before Lee Myung-bak takes office Feb. 25. The key posts that need to be filled include the chief of the National Police Agency and a member of the Korea Independent Commission Against Corruption. The tenures of about 20 auditors and directors of state-run corporations will also end. (SITE NOTE: The Roh administration cannot be trusted on this. A Cheong Wa Dae official said on 1 Jan, "We have not heard any word from the PTC (Presidential Transition Committee) yet. If personnel movement is inevitable, we will consult with the PTC. Otherwise, we will postpone personnel movements." He added, "In the case of senior officials of state-owned enterprises, they are publicly hired. So personnel management of those enterprises can be done independent of the request. But we can have words with PTC." In other words, we are going to do as we damn well please until we are forced from office. ) The Transition Committee on 27 Dec urged Cheong Wa Dae to hand over all administrative records intact. Committee Vice Chairman Kim Hyong-o, in an apparent warning against the temptations to destroy files, said, "We expect the current government to preserve records of all activities it has carried out and faithfully cooperate with the Transition Committee in submitting data the committee will request in the future." A committee official said, "There is a chance that Cheong Wa Dae and government agencies will attempt to destroy data of their policy failures, or that the National Intelligence Service and the National Tax Service will attempt to systematically cover up how they leaked personal information of president-elect Lee Myung-bak." (SITE NOTE: It appears that the Lee Administration is preparing to do some "payback" once in office. The plans are in the works to indict the Roh administration and call it the "will of the people.") Transition Team and Canal Proposal The committee hosted a breakfast meeting for the CEOs of five major local builders on Dec. 28 to give them a detailed briefing on the cross-country canal project. It asked them to give positive thought to whether to join the project. The committee asked them to study the feasibility of the canal project “based on business principles, given that it is an investment project led by private businesses." The CEOs were from Korea’s five largest construction firms -- Daewoo Engineering and Construction, Samsung Corporation, GS Engineering & Construction, Daelim Industrial, and Lee’s own old stomping ground Hyundai Engineering & Construction. The CEOs reportedly signaled their willingness to take part. One executive with a construction firm said, "Though nothing has materialized yet, we will give serious thought to the feasibility of the project if we are formally asked to." The president elect’s cross-country canal project is a fait accompli and will start even before the general election on April 9. The project will start shortly after the president is sworn in on Feb. 25. A detailed timetable for the canal project, was revealed saying that the groundbreaking work for a Honam canal will begin at the Youngsan River in southwestern Korea in February 2009. The Honam canal is the first phase of the project along with a canal linking Seoul and Busan. Foreign investors have expressed interest in investing in the project -- but still it is all at the conceptual stages. Some foreign countries with experience with canals construction over mountains have also expressed interest. This controversial plan may stir up further calls for research as environmentalists and transportation experts question the need for such a canal. A recent survey showed many of the 100 leading local economists are also skeptical over Lee's inland canal project. These economists said the project is a government-led measure to stimulate the economy, but that this is unlikely to succeed in light of the poor prospects for the global economy. Opposition is mounting from the UNDP who states the canal is not needed and the GNP as well stating that because of its impacts, a public concensus is needed for the project. Grand National Party will put its plan to create a cross-country waterway to a vote in the upcoming parliamentary election on April 9. Some experts say the gigantic construction project will re-ignite speculative investment in real estate. Saying it will destroy natural habitats, more than 180 civic groups yesterday announced their opposition to President-elect Lee Myung-bak’s plan to build a grand canal from Seoul to Busan. The groups, including the country’s largest environmental organization, the Korean Federation for Environmental Movement, issued a joint release saying the canal plan should be left to the voters to decide through a national referendum. The groups want the transition team for the canal to stop and review the impacts of the canal -- and then allow the public to decide if the canal is needed. (Source: Joongang Ilbo.) Many experts question the project's economic efficiency. ``A canal is no longer a lucrative business. In Europe, there are a number of canals amounting to approximately 35,000 kilometer. But ithey only account for 3.3 percent in distribution channel. There is a huge discrepancy between Lee's assertion and reality,'' said Ahn Byung-wook, spokesman for The Korean Federation for Environmental Movement. A recent survey showed that a majority of local shipping firms do not think the project will facilitate their logistics operations. Among the 14 companies which expressed a willingness to use the waterways, five cited the prospective convenience of shipping goods in large quantities, while another five pointed to lower logistical costs. Meanwhile, most of the 46 shippers who responded they would not use the Seoul-Busan waterways cited longer shipping time and inconvenience of loading goods as reasons. When asked which form of transportation is most efficient, 33 out of 56 shipping firms cited roads. Railways came next as the choice of 11 companies, followed by maritime routes, with six companies saying that this was the most efficient method of transporting goods. Of the 49 companies surveyed, 26 said that new highways could be an alternative to the envisioned waterways. Seventeen companies called for the construction of more railways, while five demanded that more sea routes be opened, instead of building the waterways. (Source: Hankyoreh.) Even before Lee had been inaugurated, there were more and more groups voicing opposition to the canal project, including a Buddhist Temple group in a mountainous area that the proposed canal was to pass through. Transition Team and Economic Policy Lee Myeong-bak said his government will improve the investment environment for foreign enterprises, lift various kinds of regulations, and stabilize labor relations. Unfortunately, the current Lone Star Affair and previous anti-foreign business has caused the international direct foreign investment to drop for three years. The continuing Lone Star prosecution continues to dampen his words. The incumbent finance minister reiterated that Korea's economy will grow less than 5 percent in 2008, while Lee has optimistically stated that there will be 7 percent growth. The outgoing Finance ministry criticized Lee's plan to make it easier for non-financial institutions to invest in local banks. In Jan 2008, Lee recanted his promise for 7 percent growth. He stated it would be tough for Korea to achieve 7 percent economic growth in 2008 as he pledged during his campaign. Lee said the world economic outlook is dismal, as a variety of unexpected negative factors have appeared. His remark seems to mean he has already backed away from his three-point flagship pledge _ 7 percent economic growth, per capita income of $40,000 and becoming the 7th largest economy in 10 years. A spokesperson said Lee has lowered this year’s economic forecast to 6 percent as external factors may dampen growth -- but critics say it will be around 4.5 percent. The Presidential Transition Committee was set to announce a series of policies and amendments in an effort to lay the ground work for the revitalization of the economy before Lee Myung-bak takes office on February 25. “In line with the road map concerning the economy (revision of the financial industry restructuring law, tailored measures for small and medium-sized companies, plans to lift unreasonable regulations and reform of the public sector, as well as measures to reinvigorate the traditional markets and to assist the self-employed and small business owners), these details will be announced by January 18 before President-elect Lee is sworn in,” said a transition committee official. The transition team will first release a draft of the revised financial restructuring law, which would limit the commercial industries’ investment in the financial sector by January 18. In addition, the team is aiming to announce the details of the so-called “Tailored Measures for Small and Medium-sized Companies.” According to the measures, the Korea Development Bank will be split into a monetary policy institute and an investment bank while the money acquired in the process of privatizing the investment bank will be injected to support small- and medium-sized firms. The transition committee is also planning to announce deregulatory measures, such as the abolishment of restrictive shareholding regulations currently imposed on domestic conglomerates as well as replace the Monopoly Regulation and Fair Trade Act with the introduction of the Competition Promotion Act. The committee will focus on the “Six Major Policies,” and the “Declaration on Korea’s Advancement” from January 20 to February 24. The six policies aim to establish a science and technology powerhouse; the research and development of new growth engine; energy conservation and procurement of natural resources; the development of strategies and promotion of exports for the environmental industry; and a government-led promotion of Western and Korean medical industries. The National Assembly approved the financial reform bill, which has been under heated debate, over how South Korea's conglomerates are being run. The revised financial industry restructuring law will strike at the core of the corporate governance structure which enables chairmen of conglomerates to control subsidiaries with a small portion of stocks, by capping the cross-shareholding of financial and non-financial affiliates at 5 percent. The committee in attempting to create a "business-friendly atmosphere" said the new government will lift regulations on corporations, chief among them a cap on cross-investment in affiliates of major conglomerates that was designed, by the previous government, to untangle the Byzantine ownership structure of the chaebol or family-owned conglomerates that rule Korea’s economy. Instead, it will make it easier for such corporations to set up holding companies. The new government will remove the corporate investment cap, which “is an obstacle to boosting investment, and no similar regulation exists in developed countries.” The Federation of Korean Industries has long called for the abolition of the regulation, which it says discourages large corporations from increasing domestic investment and prompts them to move factories overseas. The new government will instead lift regulations so as to allow firms to establish holding companies more easily. So far, only firms with a debt-to-equity ratio of below 200 percent and a less than 5 percent stake in non-affiliates have been allowed to establish a holding company. The holding company system was introduced as an alternative to the circular corporate control structure among subsidiaries the chaebol so often favor. But under the holding system, which has been adopted by business groups like SK, LG, GS and CJ, only the mother company is allowed to invest in affiliates. The spokesman said the new government “will focus on letting corporations regulate themselves through the market under the key principle of abolishing excessive regulations.” The new government is apparently minded to retain only a small number of regulations necessary for maintaining the order of the market. The Transition Committee will also seek ways to ease other regulations on large corporations. As part of other pro-business efforts, the new government will reduce the number of regular tax audits into companies. However, the president elect is unlikely to keep his promise to allow non-banking conglomerates to advance into the banking industry in the near future, since it faces strong opposition from the Ministry of Finance and Economy. Transition team is considering cutting state spending by 24 trillion won (US$26) billion, or a tenth of an estimated 2009 budget, and channeling that money into new initiatives. The transition team is looking at using 14 trillion won of the reduced state budget in new initiatives. 10 trillion won will be used to fill a budget hole created by the incoming administration's plan to cut taxes. The official said that there will be a comprehensive "zero-base" evaluation of all government outlays for 2008-2012. This move could help reduce the level of state debt that stood at 33.4 percent of the gross domestic product in late 2007 to under 30 percent at the end of the next president's term in office. The power transition team, meanwhile, said a plan to privatize state-owned companies and those that received bailout funds following the 1997-98 Asian financial crisis, will be announced in the first half of this year. Companies and institutions that are to be affected are the Korea Development Bank (KDB), the Industrial Bank of Korea, Woori Bank, Daewoo Shipbuilding and Marine Engineering Co. and Hynix Semiconductor Inc. Other companies including Korea Gas Corp. may be restructured or merged with other firms. The president-elect pledged to privatize public companies during his campaign and the incoming government said on 7 Jan that it will sell the investment banking sector of KDB. Korea Electric Power Corporation, Korea Gas Corporation and Korea District Heating Corporation will be among the first public companies to go private. President-elect Lee Myung-bak’s transition team said yesterday it wants to finalize its privatization plans before July. The team said it is going to review the possibility of privatizing or consolidating 298 public corporations and organizations. The Kim Dae-jung government tried to separate Kepco’s power generation operation and privatize it, but due to strong opposition from labor unions, the Roh Moo-hyun government put a stop to the plan. The transition team will recommend poison pills or golden shares to offset the threat of foreign hostile takeovers of companies. Poison pills allow a company targeted for takeover to issue shares at a discounted price, diluting the shares held by the acquirer. Golden shares allow stockholders to exercise objections at shareholder meetings. The business community has long suggested the establishment of such measures, but the Ministry of Finance and Economy had opposed them, saying they are not in line with global standards and violate the principle of shareholder equality. The United States introduced the Exon-Florio law in 1988 to protect infrastructure-related companies from foreign takeovers. Ninety-four percent of the top 500 companies in the U.S. have some protections while 350 stock-market listed companies in Japan adopted poison pills. According to the Federation of Korean Industries, 17 out of the 30 largest Korean corporations are more than half owned by foreign investors. Transition Team and Economic Zones The presidential Transition Committee on 24 Jan unveiled a plan to divide the country into five economic and two special zones where different strategic industries will be fostered. The plan envisages two or three large cities or provinces to form an economic zone in pursuit of balanced development between the provinces and the Seoul metropolitan area. To make this happen, the central government will ease various regulations and give the regions infrastructure support in railways, airports and ports. The plan is to group 16 large cities and provinces into five economic zones -- a central metropolitan zone (Seoul, Incheon and Gyeonggi Province), a Chungcheong zone (Daejeon and the Chungcheong provinces), a Jeolla zone (Gwangju and Jeolla provinces), a Daegu-North Gyeongsang zone (Daegu and North Gyeongsang Province) and a southeastern zone (Busan, Ulsan and South Gyeongsang Province) -- plus two special zones for Gangwon Province and Jeju Island. Each zone will be managed by a headquarters with planning, coordination and financial supervisory authority and will get receive subsidies from central government for management of various projects and coordination of policies and programs with cities and provinces under its jurisdiction. This will create separate local economic municipalities. The committee is thinking of making the central metropolitan zone a hub of international finance and state-of-the-art industries. The Jeolla zone would link the Saemangeum project with tourist, leisure and corporate cities on the southwestern coast, such as Gwangyang and Yeosu. The Chungcheong zone would become a science-technology-education-R&D-bio belt. The Daegu-North Gyeongsang zone would become an energy, electronic and textile industries hub, the southeastern zone a shipbuilding-machinery-maritime-cultural industrial area; the Gangwon zone a tourist and medical hub; and the Jeju zone a tourism hub. Meanwhile, the committee said construction of the Jeolla regional section of the KTX bullet train line will be completed by 2012, a year earlier than previously scheduled, to galvanize the economy in this part of the country, and to start construction of a new international airport in the southeast, either in Milyang, South Gyeongsang Province or in Busan, as early as 2009. New third-generation ports will be built in Saemangeum, Gwangyang and Busan, together with highways linking the economic zones and highway belts around large cities. The committee would drastically ease regulations that hamper the development of these economic zones, including the stringent building-to-land ratio set for factories and the ban on factories in water resource conservation areas. It envisages an easy one-stop procedure for those who want to build factories in restricted areas. Transition Team and Labor The transition team proposed forming a four-party commission where management, government, workers and civic groups can meet to solve labor issues. However, it is generally seen that the pro-business Lee is also anti-labor. Lee's attitude is attributable to the fact that the President-elect has not yet met union leaders, but had meals with business leaders on several occasions, emphasizing that he would ease the regulations hindering business management. The President-elect is also infamous among many workers for having said ``the non-permanent workers problem is a systemic one and is inevitable,'' during his campaign. His comments and rather lukewarm attitude toward the workers have brought resistance in the labor sector, observers say. The head of the nation's largest umbrella union has vowed to act sternly to challenge the incoming government's pro-business stance, hinting at massive rallies for the next five years. Lee Suk-haeng, chairman of the Korean Confederation of Trade Unions, on 10 Jan rejected the transition team proposal for a four-party commission. Unless there is a change in Lee's attitude towards labor, the KCTU promised wide-spread strikes to shut down airlines, rail and shipping -- along with further protests of the US-ROK FTA. The cuts in civil service positions has threatened the two government unions -- one recognized and the other "illegal." The unions have stated that they would merge into one and strike to prevent the loss of their jobs. The KCTU represents over 750,000 workers, including the Korean Government Employees’ Union (which joined the KCTU in 2006), which should make the transition interesting. On 28 Jan, citing a Korean Confederation of Trade Unions' decision not to cooperate with a police investigation, the president-elect's transition team said yesterday that it postponed a planned meeting between Lee Myung-bak and the chairman of the umbrella union, Lee Seok-haeng. The confederation, which represents about 750,000 workers nationwide, reacted furiously, saying Lee is anti-labor. The confederation criticized the new government yesterday for what it called a "jaebol-friendly" policy. The union also sneered at Lee for not cooperating with the independent counsel probe into his alleged personal corruption. Lee has asked labor leaders to cooperate with his plan for economic growth. He visited the more moderate Federation of Korean Trade Unions on Jan. 23 but his aides say he will take a tough line on labor militancy. True to form, the KCTU reacted by threatening a general strike “to cut off power and gas supply and halt the operation of railway and flight operations.” (SITE NOTE: The subway strike was settled between management and labor in Jan.) Transition Team and PSI The presidential power transition committee is considering whether Korea should join the U.S.-led Proliferation Security Initiative (PSI) at the request of the Ministry of Foreign Affairs and Trade, according to committee members on 11 Jan. The ministry said that Korea should become a full member of the PSI alongside some 70 other countries including major allies such as the United States. Experts in the United States also have voiced their expectation of Seoul's joining the PSI. A transition team official said that the committee began mulling over the participation in the PSI, aimed at interdicting ships suspected of carrying material that could be used for weapons of mass destruction (WMDs) -- something the Roh administration avoided for fear of upsetting its North Korean rapproachment plans. The Ministry of Defense opposes joining the PSI. The transition team stated there was no immediate plan to discuss the issue. Anti-war activists immediately staged small protests condemning the PSI involvement -- featuring the well-known pro-DPRK supporters in the progressive ranks. Otherwise, public reaction was nill. The PSI was initiated in 2003 with the aim of intercepting WMDs from North Korea, Iran and other countries of concern. South Korea has only observed PSI exercises at the U.S. request since 2005. Following North Korea conducting a nuclear test in 2006, South Korea considered participation in the PSI but eventually decided not to, prompting the United States to express disappointment. Transition Team and Regulations President-elect Lee Myung-bak’s transition team has announced a plan to ease some 2,320 corporate, financial, broadcasting, education and communication regulations. Lawmaker Park Hyung-joon, a member of the planning and coordination team at the Transition Committee, said Thursday massive deregulation will be carried out around the next government’s inauguration to stimulate investment. The new government will first ease regulations on the financial sector, like a ban non-banking companies expanding into the banking sector. The ban on large companies from expanding or building factories in the capital area will also be eased, he said. The transition team will also review a cap on cross-investment among conglomerates’ affiliates. It will come up with detailed measures to ease broadcasting and communication-related regulations and introduce Internet protocol television (IPTV) in February. Transition Team and Human Rights Commission and Broadcasting Commission The transition team is unwilling to undermine the independence of the nation's human rights and broadcasting panels responding to concern raised by the United Nations and local rights officials. The United Nations advised President-elect Lee Myung-bak to reinstate the National Human Rights Commission (NHRCK) as an independent organization rather than a presidential committee. She also said this could affect the NHRCK's accreditation with the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights and Korea's reputation in the international human rights system. However, the President-elect showed no signs of reconsideration. Presidential committee member Park Hyung-joon said Sunday that the independence of the commission would be guaranteed. ``It was to clarify the belongings of the commission not to regulate it,'' he said. However, he indicated some reform on the NHRCK. ``When we say independence it means the commission will be have independence in performing its tasks, not that they will have total freedom without having to take responsibility,'' he added. Lee's blueprint for overhauling government organizations calls for placing the National Human Rights Commission of Korea (NHRCK) and the Broadcasting and Communications Commission under the direct control of the president. (SITE NOTE: As to the broadcasting issue, the commission was used to foster Roh's policies on benefitting progressive media and condemning conservative media. Now aligned directly under the President does anyone really believe that Lee Myeong-bak will NOT assert pressure on these groups to bring them into line with his policies? Just as Roh did, so will Lee.( However, in the end, Lee's team agreed with the Grand National Party (GNP) and the United New Democratic Party (UNDP) to give up its bid to put the National Human Rights Commission of Korea (NHRCK) under the control of the presidential office, they said. U.N. High Commissioner of Human Rights Louise Arbour recently urged the next South Korean president to keep the NHRCK as an independent body, contending that the commission could be politically influenced if it is put under the control of the presidential office. (SITE NOTE: The NHRCK was established in 2001 as an independent commission with the aim of improving the human rights status in Korea through civic groups and the government. It has advised both governmental and non-governmental organizations over human rights infringement or discrimination. It has given advice in 1,100 individual cases, of which 1,000 were given to governmental agencies. In the Roh Administration, the HRC acted as a mouth-piece and tool of the progressive government condemning the riot police for violence because they protected themselves from demonstrators with steel pipes. The list goes on. But the worst remains that the HRC refused to condemn the North for its human rights violations in line with the ROK government refusal to condemn the North for human rights violations on UN condemnations. If the UN believes that the NHRCK will be apolitical, it is sadly mistaken. Just like Roh, it will under Lee's thumb.)  Lee Myeong-bak LEE MYEONG-BAK AS PRESIDENT-ELECT (Dec 2007-Feb 2008)Lee and Power Struggle within GNP In January 2008, it looked like a GNP landslide victory was imminent in the April 2008 elections. A Joongang Ilbo survey revealed that voters were not happy with their current legislators by a wide margin. The liberal-leaning United New Democratic Party currently holds more seats than any other party. The newspaper polled 2,132 voters nationwide on Dec. 27 and 28, less than two weeks after GNP candidate Lee Myung-bak was elected president by a record margin in Korea. One out of two voters said they plan to vote for a GNP candidate in the April 9 elections. In 2004, 63 percent of the elected lawmakers began their first term -- as the progressives took control of the National Assembly. The poll respondents said they will continue to seek a new face to represent their district reflecting disappointment in the liberal movement. About 55.4 percent of the potential voters said they will not vote for their legislator for a second term, while 22.5 percent said they will vote for the current lawmaker to represent their region for the next four years.To take advantage of the situation, Lee Myung-bak asserted that the GNP policy of the President not interfering in the GNP internal politics (exerting influence in the selection of candidates, etc.) needed to be changed. The GNP constitution states that the President can NOT influence party affairs. This seems to be a move by Lee to strengthen his position as the President by filling the National Assembly with HIS middle-right supporters. The biggest loser in such a move would be Park Geum-hee's move to secure her position in the GNP leadership. Former chairwoman Park Geun-hye and the current party leadership have already had some disagreements about the nomination process. Analysts state that incumbent lawmakers who fail to get the GNP nomination for the next election may defect to a new party that will be created by former GNP chairman Lee Hoi-chang, or decide to run as independents. (SITE NOTE: According to the Chosun Ilbo, on 23 Jan "Lee called in GNP Secretary General Lee Bang-ho and gave directives about candidate selection." This certain sounded like Lee was involved in party politics. (Source: Chosun Ilbo.)) Basically the dispute is that Lee wants the nomination process AFTER he enters office to exert his influence on the process and gain control of the GNP. However, Park Geun-hee demands that the nominations be started immediately and completed BEFORE Lee enters office. The Park faction is pressing for GNP action in January. The GNP platform states that members of its Supreme Council, the top decision-making body of the party, are entitled to make the nominations. Lee and his key aides are apparently contemplating a massive change in the GNP's parliamentary makeup in the general election in April next year. The incoming president sent a chill down the party's collective spine on 27 Dec, when he stressed "sacrifice" at a meeting with GNP lawmakers and representatives of ordinary party members. "The GNP should approach closer to the public," he said. "In the process, you may be required to make personal sacrifices." He criticized factional maneuvering by some lawmakers, saying, "Forming factions based on the result of the party presidential candidate nomination, which is a bygone, is anachronistic. You shouldn't think that you can hold on to your post if you join a specific faction or group." A lawmaker close to Lee said his remarks were a warning against factional demands for a place at the feeding troughs. "Some 40 percent or more of current party lawmakers will not win a candidacy nomination again," he added. Park Geun-hee claims that the Lee faction is drafting a list of nominees that excludes past supporters of Park in her run for the GNP nomination. Park states that Lee's plan to start the process in February and finish in March will not provide enough time to screen the more than 1000 candidates -- and allow the nominees to publicize themselves. On 3 Jan tensions between Park Geun-hye, the former GNP chairwoman, and Lee Myung-bak continued as Park attacked Lee for possible delays in announcing the party's nominations for the April legislative election. The delay is seen by the Park camp as a way to bypass conservative stalwarts in favor of figures from the moderate "new right" faction represented by Lee. Park also made it clear that the wounds from her bitter defeat in the party's presidential primary in August remain open. Many old-line conservatives were bitterly disappointed when she lost. The Park and Lee camps have been struggling for control of the party since Lee's massive election victory. With opinion polls indicating that the GNP can expect a landslide victory in the April 9 National Assembly elections, the party's endorsement in a constituency is considered crucial to gaining a seat. Park wants the GNP nomination process to start immediately, but Chairman Kang Jae-sup's remarked that the nominations would be completed by March 9 at the latest -- leaving very little time before the elections. (SITE NOTE: This strategy would eliminate any threat of conservative stalwarts passed over for nominations bolting to Lee Hoi-chang's party or running as independents. The idea is that they would not have enough time to bolt.) Park also expressed concern about the idea that the GNP needs to nominate fresh faces for the Assembly, saying that she believes those who supported the party over the past 10 years of liberal rule deserve a reward. "Over the past decade, many people worked hard while the Grand National Party was in opposition," Park said. "There was a time when we were wretched, and there was a time when no one wanted to join the party. We won the presidential victory because of those who endured, and it is embarrassing for me as a former leader of the party to hear that loyalists should be replaced," she said. (Source: Joongang Ilbo.) After Park returned from China as Lee Myeong-bak's envoy, the feud seemed to be patched over. After the 20-minute closed meeting between the two on 23 Jan, Park told reporters Lee had stressed the need for the party to set “fair standards and principles” for candidate nominations for the general elections in April. Voicing agreement, Park said she told the president-elect that no one in her camp should be dropped in the nomination process just because they supported her during the party primary. The president-elect promised not to let that happen. The selection of the nomination committee for the GNP was due within a week. (SITE NOTE: There still is concerns whether Lee will go ahead to place those who supported him ahead of those who supported Park. The proof will be in the nomination committee's selections.) Lee and Agriculture/Fisheries Lee vowed to minimize the impact of the US-ROK FTA estimated at 3 trillion won. ``The countryside should push forward making the farming industry develop into a second or third industry from its long-standing position as a first industry,'' Lee said during his meeting with leaders of 40 associations of the agricultural and fishing industries at his office in Seoul on 21 Jan. He said his transition team is mapping out effective ways to minimize damage from an effectuation of the bilateral trade accord with Washington for farmers and fishermen. Lee vowed to bolster the agriculture and fisheries industries by upgrading their standard and maintaining the number of 3.5 million farmers and fishermen. However, at the same time, he stated that efforts should be made to make it the second and third industries instead of the first industry as it is now. Free trade deals are an international trend that cannot be avoided, and it will eventually be beneficial to Korea -- and likewise, the impacts to farmers/fishermen cannot be avoided. Lee and US President-elect Lee Myung-bak's transition team said that it will draw up a new strategy to improve South Korea-U.S. ties, which critics say were weakened by the departing administration's efforts to reduce Washington's influence. The transition team will soon lay out a master plan and notify the U.S. before Lee takes office in Feb. The US and other allies have stated publicly that they would greet dealing with the future conservative government after all the trials of the Roh administration. A March summit between Lee and Bush is in the offing. Though Lee had made references to renegotiating the assumption of wartime control, the Ministry of Defense position remained that it should be handed over on schedule. The same views were repeated by Amb. Vershbow -- meaning that it has progressed to far along to turn back now. In addition, there are other areas that might crop up from the ROK refusal to join the Missile Defense System -- and remaining under the US Patriot umbrella. Other areas are the continuing need for US intelligence on the DPRK. The items dealing with cost-sharing still hangs over the military relations. Lee has favored the approval of the FTA BEFORE he enters office -- and he has made no bones about doing away with the "boneless beef" controversy to assuage US objections to the FTA. Lee and DPRK President-elect Lee Myung-bak said on 14 Jan that he is willing to hold summit talks with North Korean leader Kim Jong-il anytime, if such a meeting would contribute to the denuclearization of the communist state. "Leaders of the two Koreas can meet anytime if it would be helpful to the denuclearization of North Korea. But the next summit has to take place in Seoul," said Lee in his New Year's news conference. Asked if his incoming administration is willing to abide by the latest inter-Korean cooperation agreements signed between Roh and Kim, Lee vowed to conduct a thorough review of the accords. "October's inter-Korean summit agreements were those sealed in principle and lacking in details. My new government will study the implementation of the agreements from the perspective of feasibility, fiscal burdens on the people and the national consensus," said Lee. Lee said that his incoming government will accelerate inter-Korean cooperation as long as North Korea faithfully implements its denuclearization accord reached at six-party talks. Lee noted that his government would make sustained efforts to redefine the South Korea-U.S. relationship in a future-oriented way, stressing that a closer alliance between Seoul and Washington would be helpful to North Korea. A pragmatic conservative, Lee has repeatedly demanded that North Korea give up its nuclear weapons program as a prerequisite for aid and cross-border economic cooperation. (Source: Hankyoreh: Yonhap News.) The DPRK views the Lee Myeong-bak administration with some trepidation. It no longer has the malable Roh Moo-hyun to give them anything they want. Thus they came out with a news release that the US conservative hardliners cheered when the new President was elected -- meaning that they blame the US hardliners for any future failure in the rapproachment process. Lee and Japan President-elect Lee Myung-bak said there will be no more demands for apologies from Japan during his presidency. “For a new, mature Seoul-Tokyo relationship, I don't want to ask them to apologize for, or examine themselves” over colonial rule of Korea, Lee told foreign reporters at an event organized by the Seoul Foreign Correspondents' Club at the Korea Press Center in Seoul. Asked if he would continue the tradition of demanding apologies from Tokyo established by his predecessors, Lee said, "It's true that Japan has so far only made perfunctory apologies or self-examinations in the past, and such apologies failed to move the Korean people to a large extent. But I'm sure that Japan will conduct a mature diplomacy regardless." (SITE NOTE: We wonder how Lee will handle the issue of Tokdo that has been drilled into the heads of school kids as a matter of national pride. The issue still remains a potential hot spot. However, the comfort women and reparation issues may die a quiet death.) Asahi Shimbun on 2 Feb reported that ROK President-elect Lee Myung Bak, in an interview Friday with Yoichi Funabashi, editor-in-chief of The Asahi Shimbun, said he would seek a "mature relationship" with Japan that did not linger on historical issues. "Prime Minister Fukuda's diplomacy is emphasizing Asia," Lee said. "Rather than make specific requests (on historical issues), I believe the relationship will become a more mature one." "Specialists should discuss (historical issues) with an open mind," he said. "Japan can conduct a mature diplomacy befitting an economic superpower. I will leave historical issues up to the judgment (of Japanese politicians)." Lee indicated his willingness to visit Tokyo in late April to restore relations between the two sides, Japan's Kyodo news agency reported on 17 Feb. Quoting unnamed sources, Kyodo said Lee hopes to revive "shuttle diplomacy" between the two countries, whose ties have been strained over the years by a series of historical issues. The strain peaked whenever former Japanese Prime Minister Junichiro Koizumi visited the controversial Yasukuni war shrine in Tokyo that honors the war dead, including class-A war criminals of World War II. Relations further soured when Japan laid territorial claims over South Korea's Dokdo islets in the East Sea and refused to assume full responsibility for Korean "comfort women" dragged into sex slavery during World War II. Japan colonized Korea for much of the first half of the last century. Lee said last week in a meeting with Japanese politicians that he is willing to seek renewed relations with Japan. "Korea and Japan must not be tied down by the past," he was quoted as saying by his spokesperson. "The Korean government is ready to increase efforts to expand and improve ties." "It's an expression of giving importance to Japan-South Korean relations," Kyodo quoted a Japanese official as saying of Lee's intended visit. Lee will make the visit after first travelling to the United States, South Korea's foremost ally, Kyodo reported, adding Lee is likely to announce his plan at an early date. Lee and Revamping Tourism President-elect Lee Myung-bak said on 4 Feb that South Korea's snowballing tourism deficit should not be neglected any longer, urging industry executives to redouble efforts to attract foreign tourists. Lee said his incoming government is willing to enforce drastic deregulation and taxation reform to foster tourism as one of the nation's strategic growth industries, along with information technology and environment. "I've heard South Korea sustained a deficit of $10 billion in tourism trade last year. Increasing numbers of Koreans go abroad, but the number of visiting foreigners seems to stagnate," Lee said during his meeting with tourism industry representatives in Seoul. "Previous governments have mapped out ambitious plans for the promotion of the tourism industry, but the outcome has not been satisfactory. My government intends to make tourism grow into a strategic industry of the future through deregulation and overhaul of the tourism-related taxation system." "The attitude of tourism industry executives is very important. The government's role is limited in spite of a drive for deregulation and taxational overhaul," he said. Lee, who is to be sworn in on Feb. 25, has said that his cross-country waterway project will help boost tourism and have beneficial effects in logistics, balanced regional development and employment. "Tourism seems to be regarded as a byproduct of the proposed cross-country waterway. But we wish the canal project would be pushed from the perspective of tourism. In addition, more attention has to be given to the specialization of tourism programs in Jeju Island," he said. In 2007, about 6.4 million foreign tourists visited South Korea, marking a year-on-year rise of 4 percent, while an estimated 13 million Koreans went abroad, according to government figures. During the meeting with the president-elect, executives of the Korea Tourism Association (KTA) recommended that the government take measures to boost the morale of hotel and tourism industry employees in a bid to increase the number of foreign arrivals here to 10 million this year. "State jurisdiction over foreign tourist attractions is now spread across several ministries, including the culture, foreign and construction ministries. The bureaucratic channel must be singularized," Kim Byung-sam, an executive of the KTA. (Source: Yonhap News.) Criticism of Transition Team: Falling Approval Rating Before Lee Even Inaugurated Lee Myung-bak’s approval rating has reportedly declined to the 60 percent level, more than 10 points lower than the 70 percent rating he enjoyed just after his election victory. And just around 50 percent of the public are saying that the president elect’s transition team is doing a good job. The president elect reportedly said this reaction from the public shows it has grown tired of the Transition Committee talking too much about its plans before acting on them. This is the result of the Transition Committee failing to distinguish between what it ought to do and what it should leave alone, while doing a poor job even at what it ought to do and getting too greedy. Strengthening English teaching is a job for the new government to boost Korea’s competitiveness and ease the financial burden many suffer from having to send their children to private crammers to complement poor public education. Everyone would welcome measures aimed at strengthening English teaching if they offered genuine opportunities for children of underprivileged families to learn English properly at public schools. But the result is quite different. That’s because of the clumsy approach to dealing with the plan. ... The committee not only botched things it was supposed to do but tackled things it had no business addressing. It meddled in various areas, from lowering mobile phone fees by 20 percent, cutting fuel costs by 10 percent, lowering highway toll fees during rush hour, giving business officials priority in using VIP lounges at airports, to reviving the system of awarding extra points in public service exams to those who served in the military, free admission to museums, affordable housing and even ways to spell words of foreign origin. The committee is like a supermarket of policies. (Source: Chosun Ilbo.) New Administration Lineup President-elect Lee was planning to complete the selection of the prime minister and the heads of each ministry by January 16. According to sources, the Ministry of Government Administration and Home Affairs recently requested the transition committee submit a list of cabinet members for the new administration by January 16. However, because of the restructuring of the government, there was a constant reshuffling of the players. When the dissolution of the Unification Ministry and blockages to changes in other agencies, the nomination lists were again reshuffled. President-elect Lee-Myung-bak announced on 11 Feb the lineup of his senior secretaries, naming Rep. Bahk Jae-wan of the conservative Grand National Party as senior secretary for political affairs and Hallym President Kim Choong-soo as senior secretary for economic policy. Kim Byung-kook will handle foreign and security affairs for the president; Sookmyung Women's University professor Park Mee-seok social policy; lawmaker Lee Joo-ho education, science and cultural affairs; former senior prosecutor of the Seoul High Prosecutors' Office Lee Jong-chan civil petitions; and Korea University professor Kwak Seung-jun national policy planning. Transition committee spokesman Lee Dong-kwan will perform the same job at the presidential office in addition to serving as secretary for public information. President-elect Lee said he considered three factors in picking the lineup, saying, "I chose those capable of working with me, possessing a clear view of the nation, and who are younger and more active than Cabinet members." However as of 15 Feb, rival parties' failure to compromise over President-elect Lee Myung-bak's government reorganization bill may prevent a smooth transition for the incoming government later this month, political watchers forecast. In late January, Lee's transition team submitted a package of 45 reorganization bills calling for the consolidation of 18 ministries into 13 and the elimination of about 7,500 government positions. Lee's Grand National Party (GNP) and the liberal United New Democratic Party (UNDP) last week agreed on retaining the Unification Ministry under the incoming government, but failed to reach an agreement on the fate of the maritime affairs and gender equality ministries, despite rounds of negotiations. The UNDP, set to become an opposition party with Lee's inauguration slated for Feb. 25, is also opposed to the president-elect's plan to appoint two ministers without portfolios, who will be in charge of special political and economic affairs.  The GNP regarded 15 Feb as the deadline for the rival parties' approval of the reorganization bills, as parliamentary confirmation hearing procedures for Lee's Cabinet minister designates would take seven to eight working days. Transition team officials have also said if the rival parties fail to reach a compromise, Lee will leave the post of minister at each of the disputed ministries vacant for the time being, even after his inauguration. Lee has said the planned downsizing of government organizations is indispensable to implementing his campaign pledge for a small and efficient government. Despite the unsuccessful talks on reorganization of the government, the transition team leaked the names of the 15 Cabinet officials to several vernacular newspapers 14 Feb, igniting more anger from the UNDP. The confirmation hearings are blocked since the Lee reorganization plan has not been approved by the National Assembly because of the UNDP actions. Since the majority United New Democratic Party as of 19 Feb had not agreed to a government reform bill, Lee appointed the heads of the 13 ministries set to survive his government overhaul but did not name ministers for the current portfolios of unification, gender equality and family, maritime affairs and fisheries, and science and information, which are to disappear under his reorganization plan. The incoming president will on 19 Feb ask parliament to hold confirmation hearings for the designates.
On 29 Feb President Lee Myung-bak named 26 minister- and vice minister-level officials. Among them, Vice Foreign Minister Cho Jung-pyo was appointed to the ministerial post of chief secretary to Prime Minister Han Seung-soo. Choi Jung-kyoung, an executive director of the World Bank, and Bae Kook-hwan, chief fiscal strategist at the former Ministry of Planning and Budget, were named as vice planning and finance ministers. Kwon Jong-rak, former ambassador to Ireland, was appointed as first vice foreign minister, and Kim Sung-hwan, ambassador to Austria, as second vice foreign minister. The first cabinet meeting will be held with four ministers held over from the Roh Administration because of the stalls in the nomination process. They will be listed as "ministers without portfolios." Lee's 'wealthy Cabinet' to come under fire at parliamentary hearings (Feb 2008) The "moneybag" Cabinet nominees of the incoming Lee Myung-bak administration are expected to be grilled over their assets at the parliamentary confirmation hearings slated for Feb. 27-28. Rival parties, including the largest United Democratic Party (UDP), are already upping the offensive against Lee and his new Cabinet, claiming that this "rich team" will fail to map out proper policies for South Korea's underprivileged people. (SITE NOTE: The UNDP and DLP are seeking to portray themselves as poor common folk against the rich folks of the GNP. The April 2008 elections are coming up and all kinds of ploys will emerge. But the parties are also fearful that this tactic will backfire on them. The UDP will let its member vote their conscience, though the party is against the nominees. The GNP shockingly came out and said if the nominees had "problems" they should be replaced. I believe its time that Lee Myeong-bak come out after being inaugurated and say, "What's wrong with being rich if the money was made honestly?" Roh let all the chaebol crooks out of jail because they were rich with tainted money. Everyone wants to be rich. We envy those who have the smarts to earn money and invest it wisely -- but at the same time hate them because they have what we want. It is time for the Korean people to say, "What's wrong with being rich if they made their money honestly?" At the same time, it should say, but those who got rich by corruption and back-room deals should be sent to jail -- AND NOT LET OUT.) Lee, who served as chief executive officer of Hyundai Construction and Engineering, registered his assets at 35.3 billion won during last year's presidential election. Striving to polish his image tarnished by allegations linking him to several financial scandals -- which he has been cleared of -- Lee pledged to donate most of his personal property to society. Despite the move, Lee's rival parties and some of the lower-income bracket here still suspect that he may become a "leader solely for the haves," raising questions about how Lee and his nominees have accumulated their wealth. (SITE NOTE: This will have to be seen. Lee said this in the midst of a mud-slinging campaign to deflect the UNDP criticism of his wealth. How many campaign promises are kept once you're in office is another matter.) Lee's new Cabinet minister nominees are said to be up to three times richer than the incumbent President Roh Moo-hyun's, possessing average assets of almost 4 billion won ($4.2 million). The figure stands out when compared to the average of 1.39 billion won for Roh's initial Cabinet in 2002 and also to the 1.69 billion won for former President Kim Dae-jung's nominees in 1997. Most of Lee's nominees own an average of two houses each, most of them in South Korea's so-called "bubble seven" affluent residential districts in southern Seoul, including Gangnam, Seocho and Songpa. The housing prices in these regions have soared sharply over the past years. Many of the new Cabinet minister nominees were also found to possess expensive golf club memberships and apartment units. "I wonder if President-elect Lee selected his minister nominees based on their wealth," said UDP spokesperson Woo Sang-ho. "I am deeply concerned whether these Gangnam moneybags will conduct affairs properly for those in the low-income bracket." Any suspicions about tax evasion, real estate speculation and other improper conduct should be thoroughly examined in the upcoming parliamentary hearings, Woo added. Fifteen nominees have thus far reported their assets to the National Assembly, under a law that requires senior officials to disclose all their holdings. Lee's Grand National Party, however, criticized the rival party's reaction, emphasizing that it was not a sin to be rich in a capitalist country. "Possessing a lot of money cannot itself be a target of criticism," said its floor leader Ahn Sang-soo. "Being wealthy might be a problem if assets were accumulated illegally, but it should not be a problem since all nominees were carefully examined. "Ministers are appointed based on their capabilities, not their wealth." Among the nominees who have reported their assets, You In-chon, the Culture, Sports and Tourism Ministry nominee, was found to be the richest. You, a well-known TV actor and college professor, reported more than 14 billion won in savings and real estate assets. Lee Youn-ho, the nominee to head the Knowledge-based Economy Ministry, is the runner-up on the wealth list, possessing over 5.73 billion won in holdings. Kim Kyung-hwan, justice minister nominee, reported 5.71 billion won. Lee Sang-hee, defense minister nominee, is the "poorest nominee", reporting 843 million won. (SITE NOTE: Under pressure Lee Myeong-bak had to kowtow to the UNDP over this matter. However, we feel that he should have stood his ground as his backing down sent the message that it was somehow a sin to be rich. If the allegations that the wealth was received illegally, then he was right to back down. However, if the UNDP allegations were simply made because they were wealthy, we feel it was wrong.) Samsung bribe-takers joined Lee government (Mar 2008) Kim Yong-chul, a former legal counsel of Samsung Group claimed on 29 Feb that several people associated with President Lee Myung-bak took kickbacks from the business giant. Kim Yong-chul said he plans to reveal the names of the bribe-takers through a press conference, adding pressure to the ongoing special inquiry into corruption allegations against Samsung. The list of bribe-takers includes not just top prosecutors and ministers in the Roh Moo-hyun government, but also people recently nominated or mentioned as possible candidates of the Cabinet or high-ranking officials of Cheong Wa Dae, Kim Yong-chul said in a radio interview on 29 Feb. "Besides some top officials in the prosecution and minister-level officials of the Participatory Government (of former President Roh Moo-hyun), those who have recently been touted or designated as Cabinet ministers or high-level positions at Cheong Wa Dae are also on the bribery list," Kim said on a radio talk show. Cheong Wa Dae is the presidential office. Kim had earlier withdrew his plan to make public a list of "dozens of prosecutors" who he said took bribes from Samsung. But the Catholic Priests' Association for Justice, a progressive organization that has represented Kim against the nation's biggest conglomerate in the dispute, released the names of a couple of prosecutors who it said were bribed, including Prosecutor-General Lim Chai-jin. Lim denied the allegations. The group of Catholic priests which has organized press conferences for Kim met 29 Feb to discuss the details of the disclosure but said they would not make any announcement this week. The priests' association said it will decide whether to release the list of Lee's officials linked to bribery after an internal meeting. MR. PRESIDENTLee Myeong-bak Sworn in as 17th President President Lee Myung-bak took the oath as Korea’s 17th president on Monday during the inauguration ceremony held at the National Assembly. Some 50,000 guests were invited to the ceremony, including foreign dignitaries. Major changes in both the private and public sectors are expected to take place with the launch of the conservative Lee administration, which would seek economic revival and national advancement. The first CEO-turned president will begin his five-year single term, following a decade of left-leaning rule. Inauguration (25 Feb 2008) (Yonhap News) In his inaugural address titled, “Together We Shall Open a Road to Advancement,” President Lee presented five major directions for state affairs, saying the new administration will serve the people; invigorate the economy and unite society; enliven culture and advance science and technology; strengthen security and lay the foundation for peaceful unification; carry out duties as a member of the international community and contribute to the prosperity of all peoples. “As the president of Korea, at this juncture when we’re beginning another 60 years of the republic, I hereby declare 2008 as the starting year for the advancement of the Republic of Korea,” said Lee. “I declare our solemn start towards a society that cherishes the fruits of industrialization and democratization and towards a country that abounds in wealth, caring and dignity.” “We hesitated and experienced failure at times over the past decade. But now, we will start anew. Not only will the joy of our achievements, but also the pain of our failures will be our asset for a new beginning,” said Lee. “We must move from the age of ideology into the age of pragmatism.” President Lee stressed the importance of progress while maintaining harmony, saying, “In making Korea an advanced country, we must not discriminate among ourselves or against others. I will melt conflicts between classes and resolve militant strives by pursuing pragmatism in brining cooperation and harmony.” Lee also hinted a drastic reform, saying, “I beseech the people to take a more active role to brining a change so that we can surmount this critical moment in history without difficulty. Though it is going to be difficult and painful, we must swiftly change at a faster rate. And the direction of change is openness, autonomy and creativity.” On economic revival, Lee said, “We must secure new growth engines to make the economy grow vigorously and to create more jobs.” He also mentioned specific plans to revitalize the economy, such as deregulations and privatization of government functions; introduction of competition in the public sector; tax cuts; creation of an environment where entrepreneurs can invest freely; autonomous improvement in labor-management culture; promotion of the growth of small- and medium-sized enterprises; increase in national wealth through free trade agreements; and enhancing competitiveness in agricultural and fishery industries. With regard to inter-Korean relations, Lee said, “If North Korea gives up its nuclear ambition and chooses the path to openness, a new horizon will be opened up in inter-Korean cooperation.” “The political leaders of the two Koreas must contemplate and share their views on what they can do to make the lives of 70 million Koreans happy. If it is to discuss these issues, then the two leaders should meet whenever necessary and talk with an open mind.” Regarding foreign relations, Lee said, “We will have a greater vision and take a more active stance in cooperating and exchanging with the international community.” He went on to say, “We will work to develop and further strengthen traditional friendly ties with the U.S. into a future-oriented partnership and, based on the reinforced bilateral relations, we will also strengthen our strategic alliance.” President Lee also added that he will seek peace and mutual prosperity with neighboring countries, including Japan, China and Russia, by promoting exchange and cooperation with them. Among the foreign dignitaries attending the ceremony were Uzbek President Islam Karimov, Mongolian President Enkhbayar Nambar, Japanese Prime Minister Yasuo Fukuda, Cambodian Prime Minister Hun Sen, U.S. State Secretary Condoleezza Rice, Chinese State Councilor Tang Jiaxuan and Russian Prime Minister Viktor Zubkov. (Source: Donga Ilbo.) More than 200 foreign business leaders came to the inauguration held at the National Assembly plaza in southern Seoul. Maurice R. Greenberg, chairman and CEO of the global investment firm C.V. Starr; Barry Meyer, chairman and CEO of Warner Bros.; Ron Anderson, a vice president of AIG Group and Nobuyaki Koga, president of the leading Japanese financial holdings company, Nomura Holdings, heard Lee vow to revitalize the economy. Three famous athletes of Korean descent were also invited. American Hines Ward, the half-Korean MVP of the 2006 NFL Super Bowl, 19-year-old Korean swimmer Park Tae-hwan and world champion figure skater Kim Yu-na all witnessed the beginning of Lee's term. Steven Knapp, the president of George Washington University, located in Washington, D.C., also attended. Lee formed close ties with the university in 1999 when he was a visiting scholar there, according to GW's public relations office. "In 1999, GW had the privilege of hosting Lee as a visiting scholar at GW's School of Business," Knapp said. "I am honored to have been asked to participate in this historic event. This marks a new chapter in the university's special relationship with Korea as we continue to reach out to our global community." Fifty citizen representatives attended the inauguration, including a navy lieutenant known as a national hero for his role in the 2002 Yellow Sea naval battle between North and South Korea. Lee Hui-wan was wounded in the clash with North Korean vessels off the Korean Peninsula's western coast. Lee's transition team said they invited the public representatives to give new hope to people from all backgrounds."I think that my invitation means that the new government regards national security as an important issue in the country," Lee Hui-wan said. "We learned the importance of national security through the battle in the West Sea," Lee added, using the alternate name for the Yellow Sea. "I hope to see the lives of all the Korean people improve under the new government." (Source: Joongang Ilbo.)    Inauguration (25 Feb 2008) (Tongil News) The 17th presidency of Korea started as Lee Myung-bak formally took over presidential authority from former president Roh Moo-hyun at midnight on Monday, with the Bosingak Bell in downtown Seoul tolling the momentous hour. Lee now embarks on a government of pragmatic conservatism after putting an end to the decade-long leftwing rule. He set out the revival of the economy and national unity as the two biggest topics for his agenda. But he is faced with daunting challenges -- gloomy prospects for the economy in the wake of worldwide financial instability and soaring prices of oil and raw materials; and deepening conflict between ruling and opposition parties over the government reform program and parliamentary confirmation hearings on the new Cabinet nominees. Lee's approval ratings are not as impressive as those of previous presidents released on the occasion of their inauguration. In his inaugural address, Lee offered a positive appraisal of the six short decades since the founding of the Republic of Korea during which industrialization and democratization were achieved. He declared 2008 the first year to make Korea an advanced nation. He asked the people to make efforts to create a new myth on the Korean Peninsula through harmony and cooperation, social integration and economic development, upholding the "Global Korea" banner. "I will continue to emphasize opening and creativity based on a pragmatic Zeitgeist, and define responsibility for the principles of competition and welfare as a positive role of the state." He urged North Korea to open up and denuclearize, saying, "The leaders of the two Koreas should meet anytime to hold talks with open minds." (SITE NOTE: In his inaugural address he stated: ""We must move from the age of ideology into the age of pragmatism. Pragmatism is a rational principle prevalent in the histories across the globe, and practical wisdom useful in charting our course through the tides of globalization. Pragmatism is Zeitgeist that unites man and nature, matter and mind, individuals and communities for a healthy and beautiful life. In making Korea an advanced country, we ought not to discriminate among ourselves. We will arm ourselves with pragmatism for cooperation and harmony so that we may thaw out differences between classes and resolve Militant strifes. The future that I envisage for Korea is a nation where the government serves its people with devotion, a nation where the economy is robust and the weak and marginalized are taken care of and a nation where labor and management collaborate in harmony. It will be a nation where the best and brightest are fostered and welcomed by the rest of the world and which attracts the world's best and brightest to come and work.") Immediately following his inauguration on 25 Feb, Lee had separate talks with foreign dignitaries such as Japanese Prime Minister Yasuo Fukuda, Chinese State Councilor Tang Jiaxuan, Russian Prime Minister Victor Zubkov, and U.S. Secretary of State Condoleezza Rice. Also attending the inauguration ceremony were Indonesian Vice President Jusuf Kalla, Australian House Speaker Harry Jenkins, Turkmenistan Mejlis Speaker Akja Nurberdiyeva, Kazakhstan Vice Prime Minister Umirzak Shukeev, Canadian Foreign Minister Maxime Bernier, New Zealand's Foreign Minister Winston Peters, and Romanian State Secretary Anton Niculescu. (Source: Chosun Ilbo.) Foreign Media's Responses to Inauguration of Pres. Lee (Feb 2008) The world’s major media outlets reported the inauguration of President Lee Myung-bak yesterday, saying, “South Korea’s first CEO-turned president promised to spur the nation’s economic growth in his inauguration speech.” They focused on the fact that a conservative government took to the power again after ten years of left-leaning reign and showed their expectations that South Korea would take more pragmatic approach in its diplomacy and contribute to denuclearizing the Korean Peninsula. In its news from Seoul, the Associated Press reported, “Lee told some 60,000 people who gathered to celebrate his inauguration that the nation’s most urgent challenge is to revive the economy.” It also explained that Lee Myung-bak is to become the first South Korean president to win a majority vote since 1987 when the direct presidential election was restored. France’s Agence France-Presse reported that South Koreans welcomed the inauguration of Lee Myung-bak who promised to open up a new era of prosperity. Reuters also said, “The new president promised to invigorate the economy while overcoming fruitless conflicts over ideology and focusing on pragmatism.” Some foreign media even described the new president’s so-called ‘747’ pledge, which promises that he will help the nation to grow by seven percent a year, reach $40,000 of per capita income in ten years and become one of the world’s seven largest economies. American media including the Washington Times and Los Angeles Times reported that Lee promised to adopt pragmatic policies in South Korea suffering from severe polarization. CNN relayed Lee Myung-bak’s inauguration ceremony and reported that the new president promised to give a higher priority to restoring the economy under his leadership. Japanese media aired the inauguration ceremony and speech in real time via their websites. They placed an importance on the fact that the newly inaugurated president and Japanese Prime Minister Yasuo Fukuda held a summit talk after the inauguration ceremony. Asahi Shimbun reported that Lee Myung-bak stressed that he would put an emphasis not only on South Korea’s relations with the U.S. but also on its relations with Asian nations including Japan. Japan’s state-run NHK reported that his inauguration ceremony was attended by Japanese Prime Minister Yasuo Fukuda and U.S. Secretary of State Condoleezza Rice. Kyodo News paid much attention to the newly inaugurated president’s speech about diplomatic policy, saying, “He first talked about the U.S. and his second choice was Japan. They were followed by China and Russia.” China’s state-run television network CCTV dispatched its reporters to the National Assembly building in Yeouido to relay the inauguration ceremony. State-owned Xinhua also reported that Lee’s presidential tenure officially began as of midnight Monday and talked about a ceremony of striking the Bosingak Bell in central Seoul. Russian news agency Itar-Tass announced that Russian Prime Minister Viktor Zubkov attended the inauguration ceremony and Lee would employ new policies to reform the market and education. The BBC of the U.K. said that Lee worked as a businessman and the mayor of Seoul, and that he even earned the nickname ‘the bulldozer’. The Press Association reported that the inauguration of a conservative president heralded an end to the ten-year-old rule of progressives who have been criticized for worsening the economy and aggravating the U.S.-South Korea relations. Foreign media in particular paid a sharp attention to the fact that Lee talked about South Korea’s relations with the U.S. and North Korea. The AP predicted that South Korea would give up its so-called sunshine policy of engaging North Korea, saying, “Lee urged North Korea to open up its market and make efforts to deal with nuclear issues.” The AFP also predicted, “While dropping lopsided ‘sunshine policy,’ Lee is expected to combine two different approaches: support for North Korea and efforts to eradicate nuclear programs on the peninsula.” It added that South Korea’s new government is set to strengthen its relations with its decades-old ally U.S. and improve its diplomatic ties with China, Japan and Russia. Asahi Shimbun analyzed, “Unlike the Roh Moo-hyun government, the Lee Myung-bak government is likely to stress transparency in providing financial support to North Korea.” It also added that Lee said he would deal with human rights issues in North Korea and South Koreans abducted by North Korea more proactively.” Yomiuri Shimbun reported, “President Lee hinted at providing financial support to the North in return for a progress in the nuclear issue.” The Washington Times reported, “Lee, friendly to the U.S., promised to improve South Korea’s relations with Washington.” Xinhua also predicted that the new government would give a higher priority to pragmatic diplomacy. (Source: Donga Ilbo.) FIRST HUNDRED DAYS OF LEE MYEONG-BAK ADMINISTRATIONPres. Advocates 'Creative Pragmatism' in Diplomacy (Mar 2008) President Lee Myung-bak has called for what he calls "creative pragmatism" in diplomacy. At the Foreign Ministry’s policy briefing session on 11 Mar, the president criticized the ministry, saying it wasn’t in line with the 21st century trends toward a regional and multilateral cooperative system. He accused it of failing to do its part in maintaining relations with long-time allies, the United States and Japan. Lee said diplomacy should be focused on the national interest, stressing that an alliance which goes against those interests does not exist today. He went on to say that sentiments for or against the U.S. at the ministry or in the nation as a whole do not belong in today's world.On the issue of North Korean human rights, the president said it needs to be approached with universal standards of happiness in mind, not as part of the South's strategy toward the North. He added that Seoul wants inter-Korean reconciliation more than ever. Mr. Lee said he was ready to talk with the North Korean leadership. But at the same time, he declared that the two Koreas should change their attitudes and move away from ideology. Instead, he said, they should center on promoting the well-being of South and North Koreans. He added that the two sides should not infringe on each other’s sovereignty and that they should be ready to talk with a new attitude. (Source: KBS Global.) Transition Wipes Out Presidential Office Files (Mar 2008) The previous and new government are blaming each other for a transition gone awry. Presidential secretaries complain they have a difficult job because aides to former President Roh Moo-hyun left no records or information of work done at Cheong Wa Dae. But the ex-president's team tell another story: They were willing to cooperate and hand over information on their work but the new government rejected them. Some observers in turn say the system is at fault. When the new government started work, chief secretaries of President Lee Myung-bak were shocked to find that there were no useful references other than trivial manuals and policy reports in Cheong Wa Dae's work management system e-Jiwon (digital knowledge park). Most documents and files had been deleted and some parts of the hard disk were damaged. They even suffered a system error last week. A key presidential secretary said the former government had promised to cooperate in transition through e-Jiwon, but the computer was empty. It was especially difficult to sift through ministerial candidates, as personnel files of high-profile figures had not been stored at the office of the presidential secretary for civil affairs. The files were known to contain basic information on 25,000 candidates for senior government positions, checks by the prosecution, police and the National Intelligence Service, and personnel evaluations. They were said to be more accurate than information collected by the Civil Service Commission Another presidential secretary grumbled, "How could the former government remove or take all work-related records? We have to start all over setting up a work system and drawing up documents. It’s very embarrassing." Documents drawn up under Roh were moved to the Presidential Repository in Seongnam, Gyeonggi Province, before Feb. 25, when the new president was sworn in. The transfer of more than 4 million documents happened in accordance with a law on the management of presidential records. Documents on national security, important economic policies, personnel files on high-profile figures, personal information and communications between the president and aides will remain confidential for 15-30 years. Approval by two-thirds of lawmakers or a high court warrant is needed to view the documents. (Source: Chosun Ilbo.) (SITE NOTE: The Transition Committee on 27 Dec urged Cheong Wa Dae to hand over all administrative records intact. Committee Vice Chairman Kim Hyong-o, in an apparent warning against the temptations to destroy files, said, "We expect the current government to preserve records of all activities it has carried out and faithfully cooperate with the Transition Committee in submitting data the committee will request in the future." A committee official said, "There is a chance that Cheong Wa Dae and government agencies will attempt to destroy data of their policy failures, or that the National Intelligence Service and the National Tax Service will attempt to systematically cover up how they leaked personal information of president-elect Lee Myung-bak." We stated at the time that it appeared that the Lee Administration was preparing to do some "payback" once in office. The plans are in the works to indict the Roh administration and call it the "will of the people." The obvious has happened and the next step will be to get the documents released from the Roh depository -- but it will need to be after April when the conservatives win back the National Assembly.) New Gov't to Seek Legal Access to Roh Files (Mar 2008) Cheong Wa Dae and the Grand National Party on 13 Mar decided to push for a revision of the relevant law to gain access to documents drawn up under the Roh Moo-hyun administration. A considerable amount of such documents were transferred to the Presidential Repository and will remain confidential for decades. GNP floor leader Ahn Sang-soo vowed to revise the relevant law during the 18th National Assembly so the new government can have access to presidential records that have been moved to the Presidential Repository even without parliamentary approval. According to the law, which went into effect last April, presidential documents remain confidential for 15-30 years if Cheong Wa Dae classifies them as confidential and transfers them to the Presidential Repository. Approval by two-thirds of lawmakers or a high court warrant is needed to view or copy the documents. MB Reform Dogged by Poor Policy Coordination (May 2008) "Businesses are in a good mood across the board. Though there is no tangible progress, at least, we no longer need to worry about the government. Under the previous administration, we first sound out the government's response before going out to do something, be it investment or other plans," said a vice president of a conglomerate. Domestic companies are now beleaguered by external woes including skyrocketing oil and raw martial prices and the global economic slowdown. The atmosphere, however, is not that gloomy. Quite a number of enterprises have taken out investment plans that had long been shelved and are busy pushing for mergers and acquisitions. Some say that entrepreneurship has revived. Due credit should be given to President Lee Myung-bak who is taking the lead in creating a business-friendly environment. However, there are still lingering apprehensions over the economic condition. "It's like only the thermometer is rising in a heated room," said Lee Dong-eung, director of the Korea Employers Federation. He meant that though the Lee Myung-bak administration presented a volley of measures, such as deregulation and the public sector overhaul, to rev up the economy, the effects of the changed environment have yet to be felt. ? Lee's economic policy is in the right direction From a broad perspective, the business circle and academia are in agreement with the Lee administration's policy direction on the economy. Many say what should be taken into consideration in judging the current government's performance is the fact that it is inaugurated amid a deteriorating environment in the global economy that is said to be in its worst condition since the oil shock in the 1970s. "Though the rapidly aggravating global economic atmosphere is heavily weighing on the incumbent government in dealing with economic affairs, it has succeeded in boosting the spirit of entrepreneurs and encouraging investment through business-friendly policies. This is not a small achievement," said Lee Hee-beom, president of the Korea International Trade Association. Cho Seok-rae, chairman of the Federation of Korean Industries is in accord with the KITA chair's opinion and expressed his confidence in the economy during his interview with the Dong-A Ilbo, saying, "Conditions are ripe for making money." The same goes for small and medium enterprises. "I am encouraged by the president's comments that he would eliminate unnecessary regulations for large businesses with sufficient abilities to keep operating without help, and provide support and cooperation for smaller businesses," remarked Sung Nak-joong, director of the Korea Federation of Small and Medium Business. Many in the economic sector expect that visible results will come out in 2010 at the latest, if this favorable atmosphere remains unchanged. A sizable portion of entrepreneurs say the nation's economy would have faced a catastrophe if the left-leaning government had managed to stay in power. Lee Man-woo, a professor of business administration at Korea University, said the economy will be in a completely different condition if the new government manages to stand on its own feet, breaking free from the vestiges of the previous government. "In the 17th National Assembly, the ruling Grand National Party is still a minority. Even though the president pledges to devise policies that favor businesses, they are useless if they are not signed into law. The reform of state-run organizations is being delayed due to opposition from outside directors appointed by the previous government," the professor pointed out. ? Elaboration is desired in details When going into details, many raise doubts over the incumbent government's ability to implement and enforce policy measures. "Though the Lee Myung-bak administration is doing a good job in identifying what caused the Roh administration to fail and set the direction of the economic policy well, it lacks the ability to devise strategies that lead to practical action plans," said Kim Jong-seok, president of the Korea Economic Research Institute. Key policy tasks including the overhaul of the public sector and deregulation can only be achieved when the right system is put in place. The reform drive led by several of Cheong Wa Dae officials will go nowhere because it lacks elaboration and propulsive powers, according to Kim. Some criticize the government for filling the government posts with not so practical figures. Though the president prioritizes practicality, his staff consists of mainly professors and ideologues who will likely fail to go with the current of the times, they say. Another criticism against the current government is its poor performance in resolving conflicts that have been clearly manifested in the failure to adequately respond to the so-called mad cow scare and inability to push for the ratification of the KORUS FTA. The government's excessive ambition is also to be overcome. In the market economy, price variables such as foreign exchange rates, interest rates and inflation should not be dealt with by the government. But the overly-ambitious Lee administration attempted to control them, only to amplify uncertainties," said Kang Seok-hun, an economics professor at Sungshin Women's University. "The public is fully aware that the world economy is in trouble. The government needs a more laid-back attitude and should explain to the public that it takes time to recover growth potential," Kang added. ? Reforms should avoid anticlimax Some experts raise concerns that the ongoing controversy over the beef issue can be hindrance to the Lee administration's reform plan and deprive the government of the momentum for reform. "Economic reforms represented by easing regulations and revamping state-owned organizations should be pushed for in this early stage of the government. The passage of time will be an obstacle in making any progress," said Lee Hyeon-seok, director of the Korea Chamber of Commerce and Industry. Kim Gyeong-hwan, an economics professor at Sogang University, stressed the importance of the government's determination to go ahead with reform, saying, "In a short term, the reform drive is expected to face market jitters and some resistance, but the government must show the people its resolve and capability." "Though the government advocates practicality, in the eyes of the public, it is not clear what is practical and what is not. It should firmly stick to market principles and set directions accordingly," advised Kim Jeong-ho, president of the Center for Free Enterprise. Lee Seung-cheol, director of the Federation of Korean Industries, said, "It's true that the incumbent government has made some mistakes, and in some issues it did bad jobs. But it's too early to make any conclusion. It is in the term of the 18th National Assembly where the ruling party is a majority and that we can truly assess the current government's performance." (Source: Donga Ilbo.) CHANGES IN INTERNATIONAL POLITICSN.Korea Denounces 'Traitor' Lee Myung-bak (Apr 2008) North Korean official media on 1 Apr denounced President Lee Myung-bak as a "traitor" in a new twist to increasing attempts to ratchet up tensions between the two sides. The Workers Party's Rodong Shinmun newspaper also rejected Lee's plan to help North Korea raise annual per-capita gross national income to US$3,000 if the communist country scraps its nuclear programs and opens up to the outside world as an "anti-unification declaration."It was the first time in eight years the North Korean media denounced a South Korean president by name. A Cheong Wa Dae official said this was "inappropriate." But another presidential official said South Korea will not specifically respond until after the April 9 general election and the Seoul-Washington summit. In a commentary entitled "The South Korean Authorities Will Reap Only Destruction from Confrontation" with North Korea, the daily mentioned Lee's name as many as 49 times, calling him an "impostor", a "fraud" and a "traitor." "The Lee regime will be held fully accountable for the irrevocable catastrophic consequences to be entailed by the freezing of inter-Korean relations and the disturbance of peace and stability on the Korean peninsula." It slammed Lee's "denuclearization-opening-3,000" plan as "reactionary pragmatism." "Even a boiled cow's head would burst into loud laughter," it said. It was apparently a part of an ongoing campaign to increase pressure on Seoul and Washington following the expulsion of South Korean officials from the inter-Korean Kaesong Industrial Complex and its firing of missiles into the West Sea last week. Pundits earlier predicted tensions will be prolonged as the North has taken umbrage at the change in Seoul's North Korea policy toward a more "reciprocal" arrangement where hitherto unconditional economic aid is to be met with some kind of concession. On 31 Mar, the Rodong Shinmun duly warned Lee's presidency was a "thorny" factor in inter-Korean relations. "We'll see how South Korea will get along with its back turned against us," the daily blustered. "We can get along on our own without South Korea." It said denuclearization was not an inter-Korean issue, "but a matter between (North) Korea and the U.S." The Lee administration "should not forget the lessons of previous (South Korean) governments that experienced humiliating frustration after calling for priority to be given to the nuclear issue." Ryu Dong-ryeol, a researcher at the Police Science Institute, said the newspaper was essentially warning that, like during the first nuclear crisis, "North Korea may seek to ostracize South Korea while attempting to improve ties with the U.S." Then daily called the South Korean government's criticism of the North's human rights record a "political provocation." (Source: Chosun Ilbo.) Summit: Bush: U.S. troops to stay put (Apr 2008) U.S. President George W. Bush said yesterday Washington will halt its plan to cut the current U.S. military presence in South Korea by one-third and will instead keep the current level of 28,500. Bush also promised Seoul the same level of access to U.S. weapons as the North Atlantic Treaty Organization, Japan, Australia and New Zealand. The comments came as leaders of the United States and South Korea said they have agreed to expand the Korea-U.S. alliance from the Korean Peninsula to elsewhere in the world.Under the plan, Korea will contribute more to U.S.-led efforts to spread the market economy and democracy. But the two presidents said specific details of the newly upgraded alliance, called a 21st Century Strategic Alliance, will be outlined in another round of talks to be held in July when President Bush visits South Korea. (SITE NOTE: The bill was passed by Congress in Feb 2008. Nothing wrong here as the ROK buys from the US. The ROK really needs to upgrade its military hardware...FAST!!! The biggest unannounced issue is the WRSA-K issue over the munitions. Time is running out. In addition, there will be pressure growing over its failure to put up the used PAC-2 system. The US is providing its missile defense up to now. This is a MAJOR problem due to the failures of the Roh Moo-hyun administration. In addition, since the current troop levels are to be maintained, it is certain the U.S. government will urge South Korea to increase its host nation support to meet the cost of stationing the U.S. forces. The United States has been asking South Korea to increase its support from the current 43 percent to 50 percent. This cost-sharing negotiations are on-going and must be settled before the Oct SCM. The costs for 2008 are settled, but there has been no agreement on 2009 and 2010. Interestingly, "informal discussions" were raised during the latest PSI over the removal of one squadron of F-16s. This freezing of numbers is also a eyewash game as unsubstantiated reports say that troop levels are already down to 27,000 -- meaning 28,500 is on the books, but many slots are unfilled.) Kim Seong-hwan, international relations professor at Korea University, said, "Now with South Korea forging far stronger and broader alliance with the U.S. than ever, one must see how China will react." "We reached an agreement to maintain the current U.S. troop level on the Peninsula. This is mutual agreement that benefits both our nations and will strengthen our alliance," Bush said in a joint press conference held in Camp David, Maryland. The conference wrapped up a two-day presidential summit with South Korean President Lee Myung-bak. The decision marks a sharp turnaround from Washington's prior plan to reduce the U.S. military stronghold here by 3,500 to some 25,000 by the end of this year. Many experts viewed the proposed reduction as a sign of eroding defense and political ties between the two countries. (SITE NOTE: The ROK immediately tried to say that it was Gen Bell's idea to stop the numbers -- when in fact Gen Bell wanted the turn over to happen in 2008. However, the ROK has not done its share to make it happen. The U.S. government has also asked the ROK to extend new assistance for reconstruction programs in Afghanistan, from which South Korea withdrew its troops last year. It also is highly probable the United States will request that South Korea make further contributions to cover the dispatch of U.S. troops to Iraq, where troop deployments have been extended. In light of these issues, a certain level of disorder is expected in South Korea--including some political backlash.) "Korea has asked to upgrade its foreign military sales status with the United States and to have the same access to U.S. military technologies as NATO and other key allies, and I strongly support this request," President Bush said. Under the U.S. Foreign Military Sales program, South Korea has to go through a long Congressional review whenever it makes an order worth more than $50 million from U.S. weapons producers. But according to the upcoming change in its status, the $50 million ceiling is lifted to $100 million and Congressional review will take no more than 15 days.  Bush and Lee at Camp David (21 Apr 2008) President Bush also said he would try to win the long-delayed Congressional approval on the Korea-U.S. free trade agreement. The comment came a day after Seoul announced a full resumption of U.S. beef imports, as demanded by many Capitol Hill legislators who threatened to veto the trade bill unless Seoul fully opens up its beef market to U.S. imports. "The Korea free-trade agreement is a priority for this administration, and we will press hard with the United States Congress," President Bush said. (SITE NOTE: This is an old Bush promise. The U.S. government says it wants the ROK-U.S. FTA enacted before Congress adjourns in September. However, clouds are darkening over the FTA even though the ROK allowed beef imports to begin again. However, in the fine print of the beef opening agreement, the ROK retains the right to implement the quarantine system again. In other words, if the FTA passes, it's cool. If the FTA fails, the quarantines happen again...and even if the FTA passes, at some later date, the quarantines can still return. After the notice of the beef opening, the Australian beef sold at 50 percent more than US beef dropped off. In addition, Korean beef also dropped in price. Bad tidings for future events.) The two presidents also said the countries signed a memorandum of understanding on U.S. visa waiver programs for Koreans, so that they can visit the U.S. without a visa for up to a month. While Washington made several announcements in favor of Seoul, some issues the U.S. has long asked that Seoul carry out were left unmentioned. For instance, the two leaders did not address how Seoul will respond to Washington's request to join the U.S.-led missile defense program and proliferation security initiative, aimed at intercepting any shipments of weapons of mass destruction and missiles. (SITE NOTE: A MOU was signed on the VWP, but there are still the fine print issues that the US has to overcome. Outlook is that the VWP entry will not be very soon though the ROK keeps touting it in the media. The bottom line is that the ROK will blame the US for the stall when the VWP does NOT come about in 2008.) But President Lee hinted that such politically sensitive issues may be discussed at the upcoming presidential summit in Seoul. "As the international situation as well as the economic and security situation change dramatically, our alliance is also called upon to undergo new changes," Lee said in the press conference. Both leaders also stressed the equally stern stance towards North Korea's nuclear program, highlighting the need for a complete verification of the country's soon-to-be declared list of its nuclear inventory and activities. "I believe if North Korea's declaration is not satisfactory or if the verification is not satisfactory, we could probably have a temporary achievement, but in the long term, that will cause a lot more serious problems," Lee said. (SITE NOTE: There are serious questions over the North as the US moves into a ludicrous appeasement mode. The US is scrambling as the opposition to the latest "agreement" has been made public.) (Source: Joongang Ilbo.) DEMISE OF ROH MOO-HYUN'S "INNO" CITIESChanges to "Inno Cities" plans come under fire (Apr 2008) Trying to quiet protests over the possible scrapping of a plan to build 10 "Inno Cities" in the country to help develop provincial regions, the government said yesterday that the cities will be built, though in modified form. However, the statement fell far short of calming the anger from regions where Inno Cities are scheduled to be built. "Inno Cities are being reviewed so that the cities actually work and there is efficacy," Minister of Land, Transport and Maritime Affairs Chung Jong-hwan said in a seminar. "However, the review is not to scrap the idea of building Inno Cities." (SITE NOTE: The Ministry of Land, Transport and Maritime Affairs initially stated that there were "problems" with the Inno Cities plan...but there were also rumors that the government workers would not relocate to these Inno Cities of their own volition. The problem is that Roh Moo-hyun shoved the Inno Cities idea down everyone's throat and now that he is gone, the Lee Myeong-bak crew are trying to disassemble what he did. Unfortunately, the construction and plans have already gone forward. It may be too late to stop -- so Lee Myeong-bak will have to settle for modifying the plans.)The Inno City project calls for moving some 157 out of 346 state-run corporations and research institutes from the Seoul metro area. The previous Roh Moo-hyun administration listed the sites of 10 Inno Cities early in 2005: Busan, Daegu and Ulsan; Gimcheon and Jinju in the Gyeongsang provinces; Jeonju and Naju in the Jeolla provinces; Eumseong/Jincheon in North Chungcheong Province; and Wonju in Gangwon Province. Construction has already begun in six out of 10 Inno Cities. "Logically, there are many problems in regulating development in Seoul metro area," Chung said. "But the issue is closely related to provincial regions. It is appropriate that we come up with development plans for provincial regions first and then discuss loosening of development restrictions in the Seoul metro area." The business community has asked for such deregulations in the Seoul area but the regional governments opposed lifting restrictions, fearing that investments would not flow to their constituencies. Local governments where Inno Cities are planned strongly protested the idea of reviewing the projects. More than 20 regional authorities who belong to the Inno Cities Council issued a statement asking the Lee Myung-bak administration to keep to the plans. However, the Lee administration forecast the 43.4 trillion won ($44.3 billion) project would bring only 300 billion won worth of new economic activities annually. "Construction of Inno Cities is the hope of provincial regions, which are relatively less developed, and it was a national project agreed on by both the ruling and opposition parties during the previous administration," said Park Bo-saeng, Gimcheon mayor and head of the council. "If the new administration changes the previous administration"s policy, who could trust state policy in the future? If the plan changes, the government will meet strong resistance." (Source: Joongang Ilbo.) Local execs' input sought for 'Inno Cities' (May 2008) At a Blue House meeting on 2 May with 16 mayors and provincial governors, President Lee Myung-bak asked the heads of local governments to suggest ways to modify "Inno City" development according to their needs. "I don't think it is right for the central government to build stereotype Inno Cities without taking into consideration each region's circumstances," Lee said at his administration's first meeting with local government heads. "If mayors and governors come up with their own development plans for the regions, the administration will review and support them," Lee said. Aimed at helping development of provincial regions, the project was established during the Roh Moo-hyun administration. It calls for moving 157 of the country's 346 state-run corporations and research institutes out of the Seoul metro area and into envisioned innovation hubs in the provinces. The sites of 10 Inno Cities were listed early in 2005: Busan, Daegu and Ulsan; Gimcheon and Jinju in the Gyeongsang provinces; Jeonju and Naju in the Jeolla provinces; Eumseong/Jincheon in North Chungcheong Province; and Wonju in Gangwon Province. Construction has begun in six of 10 Inno Cities. Recently the new administration considered overhauling the project due to its shortcomings, but the notion was met by a firestorm of protest from local governments and politicians who warned against any attempt to scrap the project. "The administration will not resolve this issue politically. If local governments make efforts, we will fully support them," said Lee. In the meeting, Chung Jong-hwan, the minister of land, transport and maritime affairs, assured anxious local government leaders that the Inno Cities will be built. However, Chung added, "It is necessary to devise practical measures to make Inno Cities self-supporting, independent cities." After the meeting, Lee One-koo, the governor of South Chungcheong Province, told Yonhap News he had confirmed that Lee has a "firm determination" to build the Inno Cities. President Lee told the local executives that his administration is carrying out organizational reform to make government smaller and lift regulations. "If it is more efficient to transfer central government authority to local governments, we will transfer them to local governments and the people," said Lee. Lee Dong-gwan, Blue House spokesman, said such meetings will be held regularly to facilitate communication between central and local governments. (Source: Joongang Ilbo.) UNRAVELING ROH MOO-HYUN PROGRAMSSNUB OF ROH APPOINTEES: Ministries to Ban Roh Appointees From Briefings (Mar 2008) Ministries have told the heads of organizations appointed during the Roh Moo-hyun administration not to attend policy briefings for President Lee Myung-bak. Their decisions follow statements by some ministers and senior presidential aides urging the Roh appointees to retire.The Ministry of Culture, Sports and Tourism on 13 Mar said it banned Korea Tourism Organization CEO Oh Jee-chul and Korea Broadcast Advertising Corporation CEO Jung Soon-kyun from attending policy briefing for President Lee scheduled for 14 Mar. A senior ministry official said, "Public corporations are completely government-funded and operated under the government's supervision. Their heads should already have made way for newcomers now a new government is in power. But they haven't yet." Another government official said, "It's against common sense if senior appointees of the previous government who have different political convictions and philosophy attend policy briefings designed for the new government. Many of such appointees who used to work as mouthpieces for the Roh administration's failed policies are still staying in many government agencies, in particular the Culture Ministry." The Ministry of Knowledge Economy, the Ministry of Land and Maritime Affairs, and the Ministry for Health, Welfare and Family Affairs and others are also to ban Roh appointees from policy briefings. (Source: Chosun Ilbo.) On 17 Mar, three heads of organizations under the Culture, Sports and Tourism Ministry tendered their resignations apparently under pressure from the government. Oh Jee-chul, president of the Korea Tourism Organization, and Jung Soon-kyun, CEO of the Korea Broadcasting Advertising Corporation, have resigned. Their resignations came out after Minister Yu In-chon last week pressed the cultural, sports and tourism leaders appointed under the previous left-leaning Roh Moo-hyun administration should quit their post. Both Oh and Jung worked under former the Roh administration, Oh as the vice minister of culture, sports and tourism and Jung as the head of the Government Information Agency. Shin Hyun-taek, president Seoul Arts Center, also tendered his resignation on 17 Mar. Shin is the third official pressured to step down. Shin was appointed as head of the center in May last year; his tenure was through February 2009. However, Arts Council Korea Chairman Kim Jung-heun and National Museum of Contemporary Art Director Kim Yoon-soo, the two men singled out by the culture minister as typifying Roh-era appointments, said Monday they had no intention to resign. (Source: Chosun Ilbo.) KTO CEO Resignation Returned (Mar 2008) The President has returned the resignation letter submitted by Korea Tourism Organization President and CEO Oh Jee-chul. The Ministry of Culture, Sports and Tourism said Thursday that President Lee Myung-bak turned down the resignation handed in by Oh last Friday, showing confidence in him. Oh, the former vice minister of culture and tourism, took the job at the tourism organization in November last year. Though his tenure officially lasts until November 2010, Oh had submitted his resignation after Cheong Wa Dae and Minister of Culture, Sports and Tourism Yoo In-chon pressured key post-holders appointed by former President Roh Moo-hyun to resign voluntarily. Gov't to Abolish Instructions Made Under Roh Leadership (May 2008) The Lee Myung-bak administration has come up with measures to effectively abolish instructions, regulations and guidelines made by the Roh Moo-hyun government. The Ministry of Public Administration and Security announced yesterday that it began reviewing inefficient instructions and regulations as ordered by Minister Won Sei-hoon. Although instructions and regulations are subordinate to laws, it seems that details of policies made by the Roh Moo-hyun administration will face a grave change since instructions and regulations are the principles and standards on which the nation’s systems and policies are made. ? Abolition and enactment Minister Won reportedly urged ministry officials not to unconditionally follow the existing instructions and regulations but review them from the perspective of the general public. The ministry decided to abolish all instructions, regulations and guidelines and enact new ones. It means the new government wants to distinguish itself from the previous one, instead of revising some parts in need of change. Choi Doo-yeong, in charge of policy planning at the ministry, explained, “We’ll overhaul established instructions, regulations and guidelines so as to make them fit for the philosophy of the new government.” The ministry is scheduled to abolish some 80 instructions and regulations, out of 216 made before 2005. Most of them are in regards to personnel management, organizations, local autonomy and financial affairs. Relevant departments should report current conditions, purpose of establishment, and the date of abolition to the minister by next weekend. Sources from the ministry said, “Our decision to abolish all of them will not cause any problem since we’ll enact new ones immediately after abolishing the old ones.” ? Similar moves by other ministries The Ministry of Education, Science and Technology abolished 29 guidelines including 17 rules made under Roh’s leadership when it released its measures to give more authority to schools on April 15. The education ministry abolished the guidelines that are deemed to have deprived schools of authority, including the guidelines for subscription to children’s newspapers by elementary school students, regulation on presents for teachers and education of current issues. The Ministry of Culture, Sports and Tourism announced that it would abolish or revise 15 instructions including seven rules made by the former Government Information Agency and eight others created by the former Ministry of Culture. The Ministry of Environment ordered its officials to report any notices or guidelines that attempt to regulate people without legal grounds, or those that regulate the people’s lives too much. Economy-related ministries and agencies will decide whether to revise regulations and instructions after closely watching the moves of the Public Administration Ministry. (Source: Donga Ilbo.) State agency alerts ex-president Roh to leak of classified documents (Jun 2008) On 13 Jun the government of President Lee Myung-bak on Friday asked former president Roh Moo-hyun and his aides not to expose to the Internet heaps of classified electronic documents taken by the former president out of the presidential office Cheong Wa Dae before his retirement, government officials said. The request was delivered by the National Archives of Korea (NAK) to the aides of Roh, who has retired to his hometown, Bongha Village, near Busan, as the electronic documents held by Roh are believed to contain hordes of national secrets on defense and foreign affairs, said the officials. (Source: Yonhap News.) (SITE NOTE: The Lee Myeong-bak transition team requested that the Roh administration NOT wipe their computers clean and NOT to remove documents from the Cheong Wa Dae. Sensing that a witch hunt was to follow, the Roh administration officials did in fact attempt to wipe their computers clean and took all relevant documents with them. This is the reason there was such a mind-boggling log jam in the initial days in Feb 2008 as the LMB administration was starting from scratch. Our opinion at the time was a major security breach had occurred, but the LMB administration has been trying to cover this over because of the consequences to the national security. It is now evident that the LMB administration -- with the NIS and DSC -- are looking for leaks.) REORGANIZING AND DOWNSIZING GOVERNMENTLee to cut third of public sector employees: source (May 2008) President Lee Myung-bak's administration is pushing to cut nearly a third of the country's public sector employees, as part of its drive to overhaul the bloated management structure of state-run enterprises and other public entities, a source close to the president said on 23 May. "The government is now mulling a plan to reduce the number of employees at 305 public entities from 258,000 as of the end of last year to around 180,000. But those laid off would be allowed to retain their employment status for a considerable period of time to undergo reemployment training," said the source. "The sweeping reform plan will be formally announced early next month after being authorized by President Lee, who will return from his state visit to China on May 30," he said.However, Finance Minister Kang Man-soo told reporters at the presidential office ib 23 May that the proposed public sector streamlining will mostly involve employees at soon-to-be-privatized public enterprises. "Layoff of public sector employees has never been on the drawing board of government reformers from the beginning. The government is just focusing on improving the efficiency of public company management," said Kang, adding a comprehensive roadmap will be unveiled next month. Lee Han-koo, the chief policymaker of the ruling Grand National Party, also denied any government move to outrightly dismiss public sector employees. (SEE South Korea Business (May 2008) for Reform Plans.) "The basic plan is to ensure employment succession for public sector employees who will be affected by privatization," said Lee. Kang and Lee visited the presidential office to attend a national competitiveness meeting presided over by the president. Korea's state-run corporations, semi-governmental institutions and other public entities have been accused of being run loosely and inefficiently and spending taxpayers' money opaquely. Indeed, the Board of Audit and Inspection (BAI) said in a report on 22 May that KEPCO and 30 other public enterprises are accused of having paid about 1 trillion won (US$962 million) worth of "unjustifiable" welfare allowances to their employees in recent years. Following the BAI report, the prosecution immediately announced its plan to investigate public enterprise employees suspected of being involved in the reckless use of public money. Since his inauguration in late February, Lee has vowed to implement sweeping privatization of public corporations to boost public sector efficiency and competitiveness. But local labor umbrella groups representing public sector employees are vowing to stubbornly resist the Lee government's public sector restructuring scheme, heralding a fierce labor struggle in the upcoming summer months. Another ranking source at the presidential office said on 22 May the government will replace about 80 percent of public sector CEOs by the end of next month to lay the groundwork for the privatization of large numbers of state-run companies. According to government officials, about 50 public enterprises, including the Korea Development Bank, Incheon International Airport Authority and Korea Power Engineering, will be privatized, while another group of 50 public firms will be streamlined into a dozen entities. The government will also raise about 63 trillion won by selling its controlling stake in a number of state-controlled companies, such as Hyundai Engineering & Construction and Daewoo International, they said. (Source: Yonhap News.) Rationalization Or Massacre? Over 300 Public Enterprises Up for Overhaul; 70,000 on Payroll to Be Shown Door(May 2008) Because of job security and good welfare, public enterprises were often seen as dream workplaces for many. Once called ``a workplace even God would envy,'' these days these same public businesses seem to be forsaken by God. Faced with a massive lay-off plan by President Lee Myung-bak's administration, public enterprise workers are now having sleepless nights. President Lee's plan to streamline the nation's public organizations has faced a strong backlash from a public alarmed at the speed in which it is being carried out, with some believing the reason is to help finance the government's canal project, one of Lee's key pledges during his election campaign. Lee, who pledged a small government, considers slimming down or privatizing the public sector as one of his key tasks. Under the envisioned restructuring plan, out of 305 public enterprises, around 50 will be privatized, 40 will be merged, while 10 will be forced to sell part of their businesses ? the remaining firms and agencies will be unaffected. The new administration plans to cut over 70,000 civil servant positions from the current 258,000, and raise some 63 trillion won through privatization and restructuring. A concrete plan on public sector reform will be announced next month. The massive restructuring plan, however, is making public sector workers uneasy. The Korea Tourism Organization (KTO) workers joined a rally held by public enterprises in Yeouido, downtown Seoul, Saturday. The organization is set against the government's plan to offload its profitable businesses, such as golf courses and duty free shops. ``When these profitable businesses are sold, non-profit making sectors such as Korea tourism promotion will also face restructuring as there will be no money available to fund such unprofitable businesses,'' said a KTO employee at the rally. On top of partial privatization, the government urged the organization to reduce its number of workers to below 500 from over 750. KTO had already experienced large layoffs during the Asian financial crisis. She said her colleagues were very uneasy about the plan. ``Since the restructuring is so large, even young workers won't be safe.'' Workers at the Korea Land Corporation (KLC) started an all-night sit-in in opposition to the government's plan to merge it with the Korea National Housing Corporation (KNHC). The merger will give birth to a mammoth organization, combining KNHC's 4,000 employees and KLC's 2,700. Since the two organizations have some businesses that overlap, large layoffs are expected to follow. ``They say that one out of three will be forced to leave their job,'' said an employee at KNHC. President Lee Myung-bak, former CEO of a construction company, is eager to privatize the two state-run organizations. The employee said many young workers are considering switching jobs. ``Young people are uneasy as there are rumors that it will be the rookies who will be laid off first. They are preparing for exams to get licenses or studying English to help find new jobs.'' Both KLC and KNHC have no recruitment plan this year. The Federation of Korean Trade Unions (FKTU), which has been on friendly terms with the new President, claimed that Lee is trying to use the public sector workers as scapegoats to escape his falling popularity following protests against American beef imports. The union said fight would be the only choice for them if the restructuring plan is carried out without thorough analysis or consultation with workers. (The FKTU has fought every effort to privatize industries simply because of the loss of benefits for its members due to privatization. It represents government workers. The second reason it is against privatization is that its membership has been decreasing over the years and privatization will mean an even greater loss in its membership.) It is true that some public enterprises have been squandering taxpayers' money through reckless management. However, some are raising concerns that privatization is not a cure-all. The government is pointing out poor performance in the public enterprises, using this as a reason for why they should be privatized. However, public enterprises, which exist for the benefit of the public, aren't supposed to generate big profits. Moreover, their profitability is likely to worsen once they sell the few profitable businesses they have. For example, the government is urging the KTO to sell a public golf course. ``It would make profits once privatized since the new owner would raise fees, but it would eat into the welfare of the people,'' an employee at the KTO said. The KNHC is often blamed for huge debts, but its profitability is expected to worsen once it gives up its apartment sales business, something the government wants. KNHC has been using profits to build apartments to be leased by low-income households, which the private sector considers unprofitable. (SITE NOTE: Though it is a boon to the poor of Korea, there is a problem that many of these apartments have gone vacant as these same people wish to live in larger -- though affordable -- homes. The second is that many of these apartments are located in areas that are far from the higher education centers and work locations for the poor.) Some point out that they had to hire people at the request of the government. For example, the tourism organization hired highly-qualified people for the tourism development department. Now, the new government demands that it shouldn't be doing so anymore. ``Some talented people deserted high-paying jobs in leading conglomerates, attracted by the job stability here. Now what they will face is layoff,'' the KTO official said. Some are pointing out that the government is pushing the privatization too recklessly. ``There needs to be transparency in implementing the privatization plan. The government doesn't seem to have prepared enough,'' Samsung Economic Research Institute researcher Jung Ho-sung was quoted as saying by the Yonhap News Agency. He said the Japanese government prepared for around four to five years before privatizing the post office. Another expert pointed out that airports in Incheon or Singapore, some of the best in the world, are public, while London's Heathrow Airport, notorious for poor services, is run by a private business. (SITE NOTE: The complainers should look at the recommendations of the IMF during its bailout of Korea in 1997-1998. Privatization was a key element, but Korea has stalled and stalled ever since.) (Source: Korea Times.) Hundreds of ministry committees get the ax (May 2008) One government committee, formed under the education ministry to settle disputes between local education offices, never held a single meeting since it was set up in March 2000. Another, established in 2002 under the administration ministry, was supposed to be reviewing the policies of adjacent regions, but never discussed a single issue. As hundreds of the 530 government committees do nothing but exist, the Ministry of Public Administration and Security decided to shut down more than half of them as part of reorganization efforts, the ministry said yesterday. A total of 273 committees will be abolished. ˇ°The move aims to improve government management by reforming inefficient committees,ˇ± said Kim Sang-in, an organization policy official at the ministry. With government committees multiplying over recent years, the previous administration has been criticized for turning Korea into the ˇ°Republic of Committees.ˇ± The number of committees set up under ministries went up from 319 in 1999 to 573 in May of this year. A total of 15 ministries or government organizations have more than 10 committees each. The committees that will be culled this time include 63 with few accomplishments and 49 which have already accomplished their goals. Fifty-eight will be merged with other committees. The Ministry of Land, Transport and Maritime Affairs has the most committees with 59, followed by the Prime MinisterˇŻs Office with 54, the Ministry of Knowledge Economy with 50, the Ministry of Public Administration and Security with 37, the Ministry for Health and Welfare with 38 and the Ministry for Food, Agriculture, Forestry and Fisheries with 35. ˇ°By shutting down unnecessary committees, we will be able to simplify administrative procedures, implement government policies more efficiently, and cut government spending,ˇ± said Kim. According to the administration ministry, 330 ordinances had to be revised to close the committees. The ministry plans to revise the ordinances within this year and submit a bill related to controlling the establishment and operation of government committees next month. (Source: Joongang Ilbo.) CORRUPTON IN GOVERNMENT AND PUBLIC CORPORATIONSLee vows to eliminate public corruption (Mar 2008) President Lee Myung-bak said Saturday that his government won't tolerate corruption in the civil service and plans to toughen punishment for such corruption as part of his drive to turn South Korea into a first-rate advanced nation. Lee also stressed that civil servants will now have to change their attitudes towards corruption, as well as towards work efficiency, in a sector known for its job security. "Our march towards becoming a first-rate advanced country must begin with the lowering of our nation's corruption index," Lee said, speaking to Ministry of Public Administration and Security officials at the ministry's policy briefing session. "I think current punishment for public corruption is too generous. Corruption-prevention systems have to be in place and at the same time, corrupt civil servants must be much more harshly punished," said the president. In a politically sensitive remark, meanwhile, Lee said he can confidently launch an anti-corruption drive, because he is the first South Korean president elected without receiving any monetary donation from business entities. "The latest presidential election last December was the cleanest in history. No South Korean enterprise gave money to me. I think this is a historic change. That's why I can now meet anybody openly as president," said Lee. (Source: Yonhap News.) (SITE NOTE: This is something that every President vows -- and Korea continues to be ranked as one of the top nations in perceived corruption. The idea of "gifts" permeates the society. What makes this seem rather ironic is that his NIS designee is alleged to have received an apartment as part of a bribe from Samsung corporation.) 20 Public Agencies Under Criminal Investigation (May 2008) District prosecutors' offices nationwide are investigating irregularities at public corporations in a concerted effort announced when the new government was inaugurated. The Supreme Prosecutors' Office's Central Investigation Bureau on 12 May said the offices "are openly or secretly investigating 20 public corporations and government-funded agencies." Among them, prosecutors are currently investigating corruption and irregularities involving a number of officials at the Korea Coal Corporation, Korea Securities Depository, and Korea Exchange. They have banned the officials from overseas travel, searched their offices, and traced their bank accounts. The CIB has received the devastating findings of an inspection of 31 public corporations conducted by the Board of Audit and Inspection in March and April. It seems likely that the number of public agencies subject to the criminal investigation will increase further. The watchdog's inspection report found fault with the management of about a dozen public corporations including KEPCO and the Korea National Housing Corporation. (Source: Chosun Ilbo.) (SITE NOTE: These public agencies have had numerous scandals in the past over kickbacks from contractors involved in projects. However, besides the convictions of individuals, the institutions themselves have been unscathed. With the LMB relook at all the Roh administration appointees, this seems to be just the followup to eliminate the progressives from the administration.) Prosecutors to Speed up Investigation over Corruption Cases of State-run Firms (May 2008) Prosecutors raided the headquarters of Korea Asset Management Corporation and Korea Exchange on 14 May. As the Central Investigation Department of the Supreme Public Prosecutor`s Office (led by Chief Public Prosecutor Park Yong-seok) announced that it would more aggressively investigate corruption cases of state-run corporations, increasingly more state-run corporations and organizations are under scrutiny. The second tax investigation division (led by Woo Byeong-woo) of the Seoul District Prosecutors’ Office raided KAMCO headquarters in southern Seoul and the residences of the company’s employees. Prosecutors reportedly found evidence that KAMCO manager Kim bought plain bonds of two firms from a financial institution in 2005 and recently released the bonds from attachment after taking a bribe. Prosecutors have arrested and are investigating Kim and two other working-level employees in the bribery case. They are trying to determine whether KAMCO executives received kickbacks from bond issuers when they bought plain bonds. The Seoul District Court’s first tax investigation division (led by Bong Uk) raided KRX’s headquarters in Busan and its Seoul office. It found evidence that KRX took bribes from IT equipment suppliers and is investigating related individuals. Prosecutors dispatched around six investigators to the office of KRX Chairman Lee Jeong-hwan in Seoul and the management support team office in Busan, securing hard discs that are being thoroughly analyzed. The KRX chairman left Korea to participate in investor relation events of listed firms on May 11 and returned to Korea on 14 May, five days earlier than scheduled. Kim Su-nam of the Seoul District Prosecutors’ Office said, “We believe it needs to be investigated whether Lee committed breach of trust while executing the budget and managing assets.” The Financial Supervisory Service in its regular inspection found that KRX spent 1.05 billion won on golf as a part of its entertainment expense from January 2006 to September 2007. The FSS submitted relevant materials to prosecutors last month. The Seoul District Prosecutors’ Office has investigated suspicions that state-run Korea Development Bank has illegally lent money to Grand Department Store. Prosecutors found evidence that KDB’s manager Choi bought shares of the department store in bulk back in 2002 and have launched an investigation into the source of the fund. Choi bought 390,000 shares, or 7 percent of total shares of Grand Department Store, amounting to 2.8 billion won, using his relatives’ names. Finding that Choi was in charge of the loan business in 2002 when KDB bought private placement bonds of Grand Department Store worth 180 billion won, prosecutors are trying to confirm whether Choi secured the shares in exchange for loans. (Source: Donga Ilbo.) Public Corporations under Investigation (May 2008)The Central Investigation Department of the Supreme Public Prosecutor`s Office investigating an embezzlement case by some employees of the Korea National Oil Corporation (KNOC) swooped down on the corporation’s headquarters in Anyang, Gyeonggi Province. This is the first time in two years that the Central Investigation Department launched an investigation since the Loan Star probe in 2006. It is expected for the prosecution to probe into a score of public corporations in earnest sooner or later. About a dozen investigators seized numerous documents and computer data with regard to planning and implementing resource development and related overseas projects at the headquarters. Prosecutor Choi Jae-kyung said, “Concerning the government’s resource development business, the prosecution focuses on the suspicion that the budget was embezzled by some KNOC employees.” He added, “In particular, we will look into a possible connection between this case and deeply rooted structural problems.” The prosecution is known to have found irregularities committed by KNOC President Hwang Du-yeol and put a travel ban on him. Meanwhile, the Seoul Central District Prosecutors’ Office probing into an alleged bribery case involving an executive of Korea Asset Management Corporation (KAMCO) grilled on 14 May Ido Land CEO Do Gyu-yeong, 47, who runs leisure sport complex Tigerworld in Bucheon, Gyeonggi Province. Do is believed to have reaped enormous amounts of profit by purchasing stocks of Company A, originally owned by KAMCO, and sold them at a much higher price in 2005. Kim, who is in charge of credit assistance at the state-run company, is alleged to have accepted 40 million won from Do, who heads a leisure facility firm. In return, Kim in 2005 sold shares of his company that were appraised at six billion won at the time for 2.7 billion won to Do. Prosecutors said Do sold the shares 18 months later for 27 billion. Prosecutors are investigating whether he bribed some of the KAMCO executives to purchase stocks. The prosecution also searched the headquarters of the Korea Exchange in Busan and took over its computer data for two days in a row on 15 May. (Source: Donga Ilbo.) South Korean prosecutors stepped up on 17 May their investigation into allegations of corruption involving state-run financial and resource companies. As part of the probe, prosecutors said they arrested a broker, who was only identified by the surname Seo, who is suspected of taking money from entrepreneurs to lobby officials at the Korea Credit Guarantee Fund to lend the businessmen several billion won worth of government funds. Prosecutors said they have reliable information that the company gave hundreds of millions of won in bribes to another official of the asset company in return for loan assistance. The official is in hiding and an investigation will seek to confirm if he also sent money to the fund‘s officials as well. (Source: Yonhap News.) A manager at Korea Express Corporation was also arrested for allegedly taking 35 million won from a company that asked for his help in buying state-owned land. (Source: Donga Ilbo.) Investigation of Public Firms Widens (May 2008) Prosecutors are expanding their investigation into the corrupt business practices of a wider range of public services firms, a move seen by some to help pave the way for the privatization or rationalization of the bloated firms. Korea Tourism Organization (KTO) also fell prey to the probe as prosecutors raided its subsidiary casino operators, including the headquarters of Grand Korea Corporation (GKL) in Samsung-dong, southern Seoul and the residence of the company's former president Park Jung-sam. Park has been banned from leaving the country. Through the raids, the prosecution focused on securing evidence for KTO's unfair selection of casino operators and GKL's executives' embezzlement. Among financial firms, the Export-Import Bank of Korea is included on the blacklist. On the afternoon of 27 May, prosecutors arrested Kim Jae-ho, assistant director of the Public Procurement Service (PPS), for bribery. He is the first ranking official to face arrest since the inauguration of the President Lee administration. Kim allegedly received approximately 57 million won in bribes from the president of a construction company from September 2006 to March 2008. Upon his arrest, the procurement agency on 28 May issued an apology. Meanwhile, the tax authority Wednesday announced it plans to launch an audit of the Korea Electronic Power Corp. and the Korea Hydro and Nuclear Power Corporation. Following the launch of the Lee Myung-bak administration, prosecutors have targeted public firms to uproot alleged irregularities. But the move also reflects political motivation to replace incumbent public firms' heads, mostly appointed by the former administration, and reduce opposition to the privatization of public firms. Since the intensive probe began earlier this month, prosecutors have raided the headquarters of major public firms, including Korea Exchange, Korea National Oil Corp. and Korea Asset Management Corp. and investigated key figures from them. Currently, some 300 public services companies operate in Korea. (Source: Korea Times.) BAI to Launch Investigation on KBS (Jun 2008) The Board of Audit and Inspection of Korea launches its investigation on the Korean Broadcasting System on 11 Jun. The inspection agency announced Tuesday that it would order around 20 auditors to investigate the state-run broadcasting station as the BAI`s administrative judgment committee rejected KBS’ request to cancel the inspection and suspend the execution. In the press release, the BAI said, “The committee rejected KBS’ request to cancel the inspection since our investigation on KBS is part of an audit process which includes establishment of audit plan and execution, thus it is not a proceeding that can be subject to administrative judgment. The committee also rejected KBS’ request to suspend the execution since its request for judgment is unlawful.” The BAI’s three executives including the secretary-general, the executive director of education, and the executive director of research and four outsider directors participated in the committee and unanimously decided to cancel the request. The inspection agency said, “We have not conducted any investigation on KBS since 2004. And, some people have raised suspicion about the station’s reckless management and misuse of the right to implement personnel management. Since some civic organizations have urged the BAI to investigate KBS, we decided to launch a comprehensive investigation on the broadcaster.” (Source: Donga Ilbo.) KBS Chairman to Be Subpoenaed (Jun 2008) The Seoul Central Prosecutors’ Office has been investigating Korean Broadcasting System Chairman Jeong Yeon-joo on suspicion of embezzlement and is expected to subpoena Jeong soon. A source at the prosecutors’ office said on 13 Jun, “As soon as the fact-finding investigation into KBS’ tax refunds ends, we will subpoena Jeong. It will be within this month.” Jeong is now under suspicion that he could have received 343.1 billion won back from the government if he had continued the 2005 lawsuit, but only received 55.6 billion won by proposing a balancing act, causing his company a 287.5 billion-won loss. Prosecutors will investigate Jeong to find out whether the intention of KBS was reflected in the lawsuit back then and whether he knew of the possibility of the company’s winning the case. Prosecutors reportedly obtained an internal document from the National Tax Service that states, “As KBS is likely to win the case, accepting the offer of KBS, which is coordination, is more beneficial for us because KBS can collect more corporate taxes.” In response, prosecutors called former and current KBS legal division employees who were involved in the lawsuits to ask about the legal reviewing and responding process at the point when even the accusers suggested balancing with KBS as it would be to the station’s advantage. Jeong was prosecuted last month for having caused a tremendous loss to his company by ending tax lawsuits that KBS was highly likely to win and using excessive coordination to continue his presidency and make up for the expected financial deficit. KBS filed a lawsuit against the National District Tax Service to cancel corporate tax on reception fees between 1996 and 2000 and the Seoul Administrative Court ruled that the tax agency should cancel most of the taxes in August 2004. In response, the tax agency filed an appeal with the Seoul Higher Court but after negotiation with KBS, dropped the lawsuit in January 2006. (Source: Donga Ilbo.) LEE MYEONG-BAK FALLING SUPPORT RATINGSPresident's Support Falls to 29 Percent (May 2008) Supporters of Lee Myung-bak in the presidential race last December have now turned their back on the President primarily over controversial negotiations with the United States on beef imports, according to the latest survey. A Munhwa Ilbo newspaper poll said support for Lee had fallen to 29.2 percent, a decrease of 23.3 percentage points from a month earlier. The poll showed Lee's rating has sharply dropped particularly among women, people in their 30s and 40s, and the residents of Daegu and North Gyeongsang Province, the stronghold of Lee's Grand National Party (GNP).According to the survey of 1,000 adults, 57 percent said the government did not do well in the beef deal with the United States, and 12 percent said they were disappointed with Lee's picks for Cabinet ministers and presidential secretaries, whose wealth accumulation and ethics are questionable. Seven out of 10 people said that Lee was poor in communicating with the public, suggesting that Lee's team should find ways to facilitate communication to prevent recurring problems in the future. Respondents also said they were very disappointed by the main opposition United Democratic Party (UDP) as its lawmakers had boycotted the ratification of a free trade agreement (FTA) with the United States by linking it to the beef deal at the National Assembly. About 66.2 percent answered the UDP did not do a good job in handling these issues. The poll showed that people share the view that FTA ratification is unavoidable. About 71.5 percent said outgoing lawmakers did not perform well. Thirty-two percent said they were disappointed with lawmakers' involvement in physical clashes at the National Assembly, and 31.3 percent said boycotting the FTA was inappropriate. More than 40 percent expect the new National Assembly to pass a resolution urging the government to renegotiate the beef deal with Washington. (Source: Korea Times.) Lee's Approval Rating Plummets to 21 Percent (Jun 2008) Only 21.2 percent of Koreans approved of President Lee Myung-bak's performance after 100 days in office. In a Gallup poll for the Chosun Ilbo on the occasion, 68.9 percent disapproved of the new president, 3.8 percent said his performance was average and 6 percent were undecided. Lee's approval rating has plummeted over 30 points since March 2, right after his inauguration. However, in the new poll 51 percent said they believe Lee will perform better in future, as against 41.1 percent who did not. Asked why they are unimpressed, 21.3 percent said Lee does not listen to public opinion, and 16.2 percent cited rising prices. Asked what they would tell Lee if they met him, 32 percent of respondents would urge him to listen to the people, while 11.1 percent would ask him to revive the economy and stabilize prices, 9.6 percent to help low-income earners, 7 percent to gather public opinion properly and 4.1 percent to appoint properly qualified officials. Asked to what extent they felt Lee reflects public opinion in his government, 75.6 respondents gave a negative response -- 40.5 percent said "not well" and 35 percent said "not at all." Some 19.7 percent were positive, with 4.8 percent saying public opinion is reflected "well" and 14.9 percent "to some extent." Asked how the president has done in terms of achieving national integration in his first 100 days, 62.6 percent said "poorly", overwhelming the 17.2 percent who said "well." The response rate to the phone survey of 1,015 adults 19 years old and older across the country on May 31 was 17.6 percent. It had a margin of error of 3.1 points and a 95 percent confidence level.(Source: Chosun Ilbo.) Presidential Staff 'Ready to Resign' (Jun 2008) Presidential chief of staff Yu Woo-ik and all senior secretaries to the president reportedly indicated their willingness to resign on Monday over their disastrous handling of the U.S. beef scare. "What I know is that all senior secretaries told Yu that they would like to resign, taking responsibility for alienating the government from the people by misreading public opinion on the import of U.S. beef," a key Cheong Wa Dae official said. "Yu has also expressed his intention to resign to the president." Apparently the entire Cabinet led by Prime Minister Han Seung-soo are considering falling into their swords. In a meeting with the Cheong Wa Dae staff on Monday morning, Yu apologized for the president's abysmal popularity rating. "I have personally thought about taking the entire responsibility, and that thought remains unchanged," said Yu. "Some might find it hard to credit this puzzling situation of intense protests and scurrilous criticism, but we have to recognize that these are fair criticisms." In an extended ministerial meeting in the Central Government Complex on Monday, Han said he acutely felt the responsibility. (Source: Chosun Ilbo.) Wikipedia Bans Editing on Lee Myung-bak Entry (Jun 2008) The Korean version of Wikipedia, an online encyclopedia that anybody can contribute to and edit, has decided to put a four-month suspension on modification of an article on President Lee Myung-bak. Wikipedia Korea (ko.wikipedia.org) said on 11 Jun that it will take a “semi-protection measure” on its content about Lee from June 8 to Oct. 8, citing repeated vandalism. The measure disables editing from anonymous and newly registered accounts. It is used for preventing vandalism when blocking users individually is not a feasible option, such as in cases where there is a high rate of vandalism from a wide range of anonymous IP addresses. Wikipedia has remained neutral on Lee. Its entry on the president tells about his achievements as CEO of Hyundai Construction and Seoul City Mayor, and offers criticisms. The measure came as it became increasingly difficult to stop anti-government online users from adding biased and unconfirmed information on the mad cow scare. An online user with the ID address “222.238.XXX.XXX” added to the entry on Lee, “He is an insane bastard. He will ruin the country.” Another user with the ID address “210.127.XXX.XXX” attempted to change the title of one of Lee’s publications from “Cheonggye Stream Flows toward the Future,” to “Beef with Mad Cow Disease Goes into Children’s Mouths.” The semi-protection measure has been taken by an administrator selected by Wikipedia. The measure is a side effect of the collective intelligence among Korean Internet users. (Source: Donga Ilbo.) (SITE NOTE: In conjunction with the Wikipedia stoppage to cool down the entries, the internet generation coined "2MB" to talk of Lee Myeong-bak. Critics on the Internet have been using this shorthand to describe President Lee. It can actually be a legitimate description since the surname ``Lee'' and the word for "two" sounds the same in the Korean language, while MB stands for the President's initials. But MB could also stand for the computer term ``megabytes.'' Some critics and Internet users have been using the term ``2MB'' to argue that the President lacks sufficient processing capacity.) President at Crossroads (Jun 2008) President Lee Myung-bak is in a big trouble. But the bigger question for the 67-year-old head of state and for the nation is whether the self-described CEO of Korea Inc. can turn the crisis around and make a ``fresh start'' as he vowed Wednesday morning. ``I am determined to make a fresh start,'' Lee told small business representatives at Cheong Wa Dae, adding that he had mixed feelings while watching on television the massive candlelit protest against his decision to renew U.S. beef imports. However eagerly the head of an administration that is less than four months in office wants to start anew, there is a near consensus among Lee's detractors and supporters that his top priority should be to listen to what is generally said to be wrong with his government. Although the biggest act of civil disobedience in 20 years, culminating in the candlelit protest Tuesday night, was triggered by Lee's decision to open up markets to U.S. beef, it was preceded by a string of moves that alienated friends and strengthened foes. On the political front, Lee is under the long shadow of his elder brother and six-term lawmaker, Rep. Lee Sang-deuk of the governing Grand National Party, who is accused of acting as a regent behind the scenes by having his proteges appointed to key posts in the chain of command and clouding the President's judgment. This triggered a backlash among President Lee's inner-circle members. Lately Rep. Chung Do-un, a close aide to Lee since he was Seoul mayor, openly claimed that the elder Lee ``remote-controlled'' state affairs through his subordinates. Chung said one of those who serve as the elder Lee's subordinates was Park Young-joon, who was nicknamed the ``king of presidential secretaries.'' Park was later fired, but others still remain. Another big problem that disillusioned the public were the people President Lee selected for the Cheong Wa Dae secretariat and the Cabinet. Many of the appointees were wealthy and knew President Lee through attendance at the same church. In addition, the appointments of two ministers were withdrawn due to questions related to improper real estate dealings. Seoul Shallow in Understanding Trade Deal Then came Lee's decision to resume U.S. beef imports. Korea made a major concession to provide unprecedented domestic market access to U.S. beef in April. The deal came during Lee's visit to Washington, raising suspicions that Korean negotiators went out of their way to accommodate U.S. demands in order to smooth the first meeting between Lee and President George W. Bush. Protests started on a small scale first and then became bigger. The Lee administration defended the deal, ignoring the public demand for renegotiations. Then it peaked Tuesday night. On that night, frustrated Agriculture Minister Chung Woon-chun made a surprise appearance in front of protestors in downtown Seoul to make an apology but was booed and jeered at by the crowd. Amid constant demand for renegotiating the deal, Cheong Wa Dae now seems to have turned to a strategy of seeking to induce voluntary restrictions from both countries on trading beef from animals 30 months or older. A local lawyer said the action was inappropriate for a government, saying it shows Seoul's shallow understanding of trade negotiations. ``The whole agreement is about enforcing statutory order here,'' said Song Ki-ho, a member of the Lawyers for a Democratic Society. ``It doesn't make any sense at all for the government to depend on self-regulation.'' Surveys showed Lee's support rate plummeting to below 20 percent at the fastest ground-losing pace in the country's modern history. The failure is in line with the government's bureaucratic approach to the issue, which failed to make the public listen to arguments on the safety of U.S. beef as well as Lee's apology later. Before the beef talks began on April 11, the government maintained the standpoint it would not accept beef from cattle older than 30 months without stricter U.S. restrictions on animal feed. The fruitless weeklong talks, however, reached an agreement suddenly, just 11 hours before Lee arrived at Camp David to meet with Bush. Details of the agreement showed huge concessions from South Korea's initial demands, practically allowing full access to the Korean market. Washington made a notification of its revised animal feed policy that allowed that made from brain or spinal cord from cattle younger than 30 months old was allowed to be used. Seoul, not only mistranslated that part, but announced it had accomplished having U.S. policy ``intensified.'' Some earlier remarks from the President fueled public anger rather than cooled it down. Soon after the agreement, Lee enraged the general public by saying, ``those who don't like U.S. beef simply won't eat it.'' Even in his televised speech on May 22, Lee said it was regrettable the government was unable to pool public views sufficiently before striking the deal, but did not admit any defects in the deal process, only mentioning that he was ``embarrassed to see the groundless fears of mad cow disease spreading.'' (Source: Korea Times.) Civic Groups Warn of Impeachment Drive (Jun 2008) The People's Association for Measures Against Mad Cow Disease, which has been organizing candlelight vigils against the import of U.S. beef, warned Wednesday it would launch an impeachment campaign against President Lee Myung-bak if the government fails to begin an all-out renegotiation of the beef deal with the U.S. by June 20. In a statement, the coalition of over 1,700 civic groups including the People's Solidarity for Participatory Democracy, urged the government to nullify the existing agreement and negotiate the deal from the scratch. "If the government decides to ignore the mandate from the people, who hold the sovereign power in this country, we will not hesitate to launch a campaign to drive president Lee Myung-bak out of office," the statement read. (SITE NOTE: As we have been saying all along, this pan-Korea cover group of the progressive NGO groups is actually a POLITICAL group whose primary goal was NOT the health of the people but the overthrow of the LMB administration. Its threat of impeachment is unconstitutional and the group knows this. It also knows that it does not have a majority in the National Assembly and any move could NEVER pass. In addition, it also knows that the renegotiation of the beef agreement would be a disaster for Korea and therefore is impossible. The only reason it is doing this is to continue unrest and foster anarchy. It is a shame that the Korean people are so blind that they cannot see that they are being manipulated and used -- the same as the Roh administration did over the Tokdo issue to foster nationalism to distract the nation from the real problems it faces. We have publicly stated that this will be the week that will be the make-or-break condition for Korea...and things could go in any of a thousand directions.) The Association added it will continue candlelight vigils until June 20. The protesters are organizing large-scale rallies on Friday, which marks the sixth anniversary of the death of two schoolgirls killed by a U.S. armored car, and also on Saturday, the funeral of the late Lee Byung-ryeol who burned himself to death to protest against the import in Jeonju. They will also hold a big event on Sunday, the eighth anniversary of the first inter-Korean summit. The candles will not be snuffed out for at least this month, as the Korean Confederation of Trade Unions is scheduled to lead summer strikes soon. (SITE NOTE: The group has now also shown that it is anti-American at its core. Thus far we have not seen any indication that the protests are anti-American, only against the US as a trade partner. However, if it resurrects its vile anti-Americanism, the damage to Korea will be irreparable. The US forces will be leaving and in a hurry. On 12 Jun there is a ray of hope as the public seems to be returning to rational thought instead of hysteria. There is a feeling that the protests have gone on too long. There is a sense the protests are waning -- and a true sign is when the rats desert the sinking ship. The progressive political parties are now returning to talk about opening the current session of the National Assembly.) The Korean Transportation Workers' Union, which warned it would go on a general strike while demanding support to tackle surging oil price, is now using the beef issue as an excuse for refusing to go out on delivery. Prior to a general strike scheduled for Friday, some members of the union in Ulsan, Gwangju, and South Chungcheong Province have already been on a strike since Monday. The Ministry of Land, Transport and Maritime Affairs has warned of a distribution crisis. Although the number of vehicles driven by union members accounts for just 5 percent of the total, if non-unionists join in the strike and the unionists obstruct other drivers, it could cause serious problems. In addition, there is also speculation that U.S. President George W. Bush's visit to Korea, which has been expected to take place from July 7 to 9 after he attends the G8 summit in Hokkaido, Japan, could be postponed amid virulent anti-government protests in downtown Seoul. With no signs of the nightly candlelight vigils ending and fears that Bush's visit would only stir up public sentiment, some are skeptical that the visit could be made in early July. Some are suggesting that Bush could instead visit Korea right before or after the opening ceremony of the 2008 Summer Olympics in Beijing in August. "Both Korea and the U.S. worry about the possibility that prolonged candlelight vigils would transform into anti-U.S. protests, and that a state visit by Bush would only exacerbate the situation," a diplomatic source said. However, Cheong Wa Dae and the Foreign Ministry deny the speculation, saying there has been no discussion of moving Bush's visit to Korea to an alternative date. A senior official at the Foreign Ministry said Wednesday that the U.S. is only preparing for the July event. (Source: Chosun Ilbo.) South Korea's Leader Vows to Make New Start (Jun 2008) South Korean president Lee Myung-bak on Wednesday pledged to "restart" his fledgling administration following protests that began over a decision to allow the importation of U.S. beef but broadened into a backlash against the president himself. In his first comments on demonstrations that drew tens of thousands of people into the streets of central Seoul and other South Korean cities on Tuesday, Lee told a group of business leaders that he would "restart the government with renewed resolve" in an effort to regain public support. He indicated, however, that he would not accept the resignations offered by top government officials on Tuesday (10 Jun) -- at least not all of them. Lee's entire cabinet offered to resign in order to take responsibility for the beef dispute and to take heat off the president, who has been in office less than four months. Lee, in comments reported in the South Korean media Wednesday morning, said that people had expressed concern to him that accepting all of the resignations would create a "vacuum" in leadership. "We will not make any vacuum in the governance," Lee said. But it remains unclear whether individual cabinet members will be allowed to step down, or whether Lee plans other changes in hopes of defusing public opposition to his government. "I thought about a lot of things while watching protests last night," Lee said, according to local media reports. The crowd in Seoul, chanting "Out with President Lee" and wearing stickers that made Lee look like a rat, included office workers, parents with children, college students and members of labor groups. "It is too late to soothe the public with lip service, and even fixing the beef issue is too late," said Lee Hong-taek, 33, a gaming software specialist, who joined the protest after work. "The real question is his leadership style." Police said 70,000 people protested in Seoul, while organizers put the number at 700,000. Local media estimates ranged from 400,000 to 600,000. There were no reports of clashes between protesters and police, as there were in demonstrations this spring. Despite repeated assurances from Lee's government and the United States, many South Koreans continue to fear that U.S. beef will infect them with mad cow disease. But people in the streets here are also angry about what they call Lee's arbitrary way of making major decisions, his tone-deaf response to public opinion and his choices of rich and, in some cases, unsavory business leaders for senior position in his government. "The president must realize that this is a very serious situation," said Kim Hyung-suk, 60, owner of an after-school institute. "If he does not listen even now, then the next step is to demand that he steps down." Soaring oil prices have also soured the public mood, and truckers voted Monday to go on strike for cheaper fuel, even after Lee's government offered a $10.2 billion package of aid that would provide some subsidies for gasoline and diesel fuel. The offer by his entire cabinet to resign may give Lee an opportunity to appease populist anger, rebuild his government and recast his image. The 66-year-old former construction company executive has stumbled badly in his first 107 days in office. After winning election last fall by the largest margin in the country's history, his approval ratings have fallen to less than 20 percent. In April, Lee stunned many South Koreans by lifting a 4 1/2 -year ban on U.S. beef that was put in place after a dairy cow in Washington state was confirmed as the first case of mad cow disease in the United States. After his poll numbers collapsed and as street demonstrations gathered support, Lee changed course last week and reimposed part of the beef ban. But that has done little to appease protesters. Their anger has been embraced and magnified by labor groups and by the opposition party that Lee's Grand National Party defeated in last year's presidential election and again in a parliamentary election this spring. In a statement Tuesday (10 Jun), the United Democratic Party demanded that Lee renegotiate the beef agreement with the United States. "President Lee Myung-bak's arrogance and self-flattery are reversing the development of democracy in Korea," the party said. Late Tuesday, about 500 students turned up in front of the ruling party building and threw raw eggs. In comments posted Wednesday (11 Jun) on the Yonhap News Agency Web site, a South Korean trade official said further talks with the United States will "clarify" the existing deal -- including a request by the South Koreans that the United States not sell beef from animals more than 30 months old. But the official said the deal itself was not up for renegotiation. A presidential spokesman did not say whether Lee would accept the resignations of Prime Minister Han Seung-soo and 15 cabinet ministers. But local media have speculated that this week Lee is likely to jettison his agriculture, health and education ministers, and perhaps his foreign and finance ministers. Tuesday's (10 Jun) demonstrations, which took place in more than 70 cities and towns, came on the 21st anniversary of a pivotal event in South Korea's young history as a democracy. Street protests that began on this day in 1987 pushed the government, then dominated by the military, to accept a shift to a government led by a directly elected president. In the streets of Seoul on Tuesday, many protesters complained that Lee's top-down style of decision-making reminded them of the bad old days of military rule. "Koreans no longer will tolerate that," said Hyun Deok-soo, who said he was the chairman of a workers' union. (Source: Washington Post.) Lee's emotional apology over beef deal draws mixed responses (Jun 2008) Lee already issued a beef-related statement on May 22, apologizing for failing to understand the people's concern about mad cow disease and vowing to suspend U.S. beef imports if the health of the people is threatened. The embattled president is planning to replace his chief of staff, Yu Woo-ik, and almost all of his senior secretaries on Friday in a bid to polish his administration's image, which has been tainted by the beef dispute and the appointment of a number of ethically problematic figures as top government officials. Reshuffle of his Cabinet, which had offered to resign last week over the beef row, is likely to be carried out next week. Lee explained that his administration has had no choice but to reject the people's demand for a renegotiation of the beef deal with Washington for fear of serious backlash on the Korean economy, and has instead decided to pursue additional talks. "As long as the Korean people don't want, U.S. beef from cattle older than 30 months would never be offered to Korean consumers. I'll obtain a firm U.S. government guarantee regarding the issue. I expect the U.S., as an ally of South Korea, to respect the will of the South Korean people," said Lee. The president then made it clear that South Korea would not import U.S. beef if the issue over the cattle age restriction is not resolved. "During my recent telephone talks with U.S. President George W. Bush, I emphasized that (South Korea's) proposal for cattle age limit has to be accepted and clearly said we'll not import U.S. beef without the (relevant) U.S. government guarantee," said Lee in a question-and-answer session with reporters. "We and the U.S. have thus far held five rounds of negotiations (on revising the beef deal). I'm convinced that the U.S. will eventually accept our demand." Asked whether revising the beef deal would have a negative impact on a free trade agreement (FTA) between South Korea and the U.S., the president replied that the contents of the FTA deal should never be changed. "President Bush has promised to obtain (legislative approval) for the Korea-U.S. FTA before his term ends at the end of this year. I expect the FTA deal to be finally ratified during Bush's term." Meanwhile, the president said he is willing to abandon his election pledge to build an inland waterway spanning the Korean Peninsula if the project is opposed by the Korean people. Lee also denied media speculation about the government's imminent attempt to privatize state-run corporations in charge of supplying gas, water and electricity and health insurance services. "The construction of a pan-Korea grand waterway was part of my presidential election pledge, but I'm ready to give up the project if it is opposed by the people. I have freshly realized that any government policy, if not supported by the people, would not be successful." Regarding the privatization policy, Lee said his government will gradually enforce the public sector reform after consulting public opinions, but denied any speculation about post-privatization surges in utility rates and layoffs. As expected, Lee's apology drew mixed responses from rival parties and civic activists. "The president says we should trust the United States," said Jang Dae-hyun, a lead organizer of the People's Association Against Mad Cow Disease. "There were no substantial measures that people have asked for. Such assurances alone are ineffective. It's very disappointing." Civic groups and some experts say voluntary regulations alone cannot ensure that beef from cattle older than 30 months is not imported. Older cattle are believed to be more susceptible to mad cow disease. They accused the government of failing to mention specified risk materials (SRMs), known to carry the greatest risk of transferring mad cow disease to humans, such as as tongues, brains, part of the intestines and vertebrae marrow. Critics say SRMs should be entirely banned and the age limit should be toughened to restrict cattle older than 20 months of age. "It was not surprising," Chun Sang-chin, a sociology professor at Sogang University, said. "He bowed down once again, apologized once again, but there was nothing that changed." Lee's Grand National Party, meanwhile, urged the government to "renew" itself on the occasion of the public apology. "We look forward to seeing a new government with new Cabinet members and sufficient countermeasures on U.S. beef imports," said the party's spokeswoman Cho Yoon-sun. The party also urged opposition parties to end their boycott of the new parliament to work alongside the "newborn government." Three opposition parties have been boycotting the newly launched parliament since May 30, demanding the ruling party cooperate in amending a local law to secure stricter import terms on U.S. beef. By contrast, the main opposition United Democratic Party denounced Lee's apology as lacking in substance. "We hope the president's apology will not prove to be superficial," said Cha Young, spokesperson for the main opposition party. "Actual measures must be presented to back the apology." (Source: Yonhap News.) President pulls Pledge on Canal (Jun 2008) On 19 Jun, the president said he is willing to abandon his election pledge to build an inland waterway spanning the Korean Peninsula if the project is opposed by the Korean people. Lee also denied media speculation about the government's imminent attempt to privatize state-run corporations in charge of supplying gas, water and electricity and health insurance services. "The construction of a pan-Korea grand waterway was part of my presidential election pledge, but I'm ready to give up the project if it is opposed by the people. I have freshly realized that any government policy, if not supported by the people, would not be successful." (Source: Yonhap News.) South Korea's Transportation Ministry said on 19 Jun work commissioned to verify the feasibility of constructing a controversial cross-country canal network has been halted, The move comes right after President Lee Myung-bak said in a press conference that he is willing to give up building the waterway system, which would link the country's major rivers, if the Korean people oppose it. (Source: Yonhap News.) Lee Appoints Three New Ministers (Aug 2008) President Lee Myung-bak on 6 Aug appointed three new ministers without confirmation hearings since the National Assembly is in deadlock. Ahn Byong-man is the new education minister, Chang Tae-pyong agriculture minister, and Jeon Jae-hee health minister. The appointment was possible because parliament had failed to act by the deadline on 5 Aug. The main opposition Democratic Party protested, giving rise to fears that the deadlock will continue. (SITE NOTE: Paybacks are hell -- especially if you beat them at their own game.) A senior presidential official said, "Lawmakers missed the July 30 deadline, the 20th day since the president asked them to examine the candidates. Nor had they finished confirmation hearings by a new Aug. 5 deadline set by the president, so the president appointed the three ministers to fill the vacuum in government." By law, the house must finish confirmation hearings 20 days after the presidential request. The ruling Grand National Party said the decision was regrettable but inevitable. The ruling party pledged to discuss with the Liberty Forward Party and the Renewal of Korea Party to find ways to normalize parliament if the DP continues to stall. But DP Chairman Chung Sye-kyun said the government tried to dodge confirmation hearings for the candidates because the opposition was preparing to find fault with their qualifications. "The appointment of the ministers is a declaration of war on the opposition,” he said. “Cheong Wa Dae will be responsible for all problems that result." (Source: Chosun Ilbo.) Lee sticks to right-wing agenda despite the polls (Aug 2008) When they handed President Lee Myung-bak the keys to the Blue House, Koreans expected a quick turnaround in the sluggish economy. Nothing else mattered as much. The president’s advertised shift to the right, a break from a decade of liberal policies, was expected. A tough stance towards Pyongyang was accepted albeit with some concern. That was six months ago when President Lee’s political capital seemed abundant. He commanded an 80 percent approval rate at the start of his term. Months-long protests over the import of U.S. beef have become a rallying call for the anti-Lee Myung-bak camp, hampering the implementation of any new policies. Blunders on the diplomatic front have only added to the agony, but the besieged government has chosen to stay true to its conservative colors. Changes have come in various forms as the administration has taken upon itself the task of implementing measures that it deems necessary for creating a society where conservative values prevail. Just last week, a special police unit was set up to deal exclusively with violent protesters. Civic groups made comparisons with the notorious Baekgoldan, or “White Skull Corps,” created during the authoritarian regime of former President Chun Doo Hwan in the 1980s. At the height of student protests, this particular unit was feared for its relentless pursuit of demonstrators. Their white helmets and blue jackets became a symbol of oppression against democracy. The government argues that the new unit is necessary. By 2014, men eligible for mandatory military service will no longer be recruited into the ranks of the riot police units. The military wants to reduce the options of alternative military service. The unit is currently a 1,700-strong force, but it’s expected to grow to 14,000, eventually replacing the current riot police units altogether. Nevertheless, experts say the purpose of the paramilitary-style unit is geared toward capturing demonstrators instead of containing or dispersing crowds, which is the traditional role of the current riot police units. Police officials have not denied that this is the case. “From now on, illegal demonstrations will be dealt with through operations focusing on catching protesters rather than breaking up rallies,” said Kim Seok-gi, the head of the Seoul Metropolitan Police Agency. At the end of June, the government announced that a no-tear-gas policy dating back to 1998 would no longer be honored if circumstances made its use necessary. Tear gas was used in prodigious quantities during violent street battles between protesters and riot police in the ’80s. Meanwhile, the military announced last week that it would weed out “seditious literature” from the rank and file for the sake of keeping what it believes is a sound spirit within military ranks. The guidelines that the military has provided to all armed branches of the military identify 23 books considered either pro-North Korea, anti-government, anti-United States or against the market economy. The list included Noam Chomsky’s “Year 501: The Conquest Continues,” which the military dubbed as anti-government while also harboring anti-U.S. thoughts. Other books on the list included “Bad Samaritans,” by Chang Ha-joon, an economics professor at the University of Cambridge. “Considering that a conservative party’s candidate has become president, these measures are no surprise. Establishing law and order is a very important mandate for the Lee administration,” said Kim Eui-young, a professor of political affairs at Kyung Hee University. “It’s a classical conservative approach in which growth is achieved first by establishing internal stability.” In a country where memories of student movements are still vivid, people watch these measures taken by the military with weary eyes. “It’s just absurd. To think that one can dictate the intellectual choice of others today. It’s a comedy,” said Park Hye-yong, an official with the Association of Writers for National Literature. “This is practical murder of the authors and a declaration of war against the readers who already have read those books.” The Defense Ministry defended its move, saying the security of the Korean Peninsula has to be taken into account. “It’s standard procedure to forbid reading material considered to be threatening to the healthy spirit of the soldiers,” said an officer of the Defense Ministry. Usually, the Defense Security Command is in charge of affairs pertaining to the country’s National Security Law, which encompasses a range of issues including a ban on certain books. While the military regularly updates its list of publications it does not want soldiers to read, the most recent move came amid concerns that an organization in the South officially stamped by the government as pro-North Korea has tried to send free books to the military with an aim to groom dissent. “Our analysis suggests that the gesture [to donate the books] was not done out of pure goodwill but the intention was to spread some bad ideas,” said another officer speaking on condition of anonymity. The officer declined to identify the organization in question. Ironically, sales of the books on the government’s blacklist surged after the measures became public. According to Aladdin, an online bookstore, Bad Samaritans previously sold only a few copies a day at best but it’s now selling hundreds of copies a day since the ban took place. Close to 500 copies were sold last Friday alone. Yes 24, another online bookstore, said sales of these particular books have also risen. Both shops have launched ad campaigns for the banned books. Under the liberal leadership of former President Roh Moo-hyun, even the military, one of the most conservative pillars of the country, was subject to changes that reflected the philosophy of the last government. At the end of Roh’s term, the military said it would allow conscientious objectors to fulfill their obligation for mandatory military duty through alternative service, altering a policy that had stood since the Korean War (1950-1953). While liberal civic groups were no doubt pleased to have finally embedded one of the nation’s most conservative organizations with fresh ideas, the move was resented by the traditional officer corps. Earlier, the Defense Ministry of the new administration said it would need to reconsider whether to grant conscientious objectors an alternative form of military service or send them to jail, like before. On the educational front, the Education Ministry has concluded that more emphasis should be placed on anbogyoyuk, which focuses on educating students about the country’s national security, with particular emphasis on North Korea. In addition, Education Minister Kim Do-yeon, who was replaced this week, has hinted that the government is looking to make changes in the future to current history textbooks judged to be nursing anti-U.S. and anti-market economy sentiment. When Kong Jung-tack, the current superintendent of the Seoul Metropolitan Office of Education, beat out his left-leaning rival Jou Kyong-bok last week in the first direct election for the position, Kong provided President Lee Myung-bak and the Grand National Party a much-needed political victory. In what was a rare moment of joy for the Lee administration, Kong’s official slogan was a clear reminder of the Lee administration’s view on education. “Education can’t be left in the hands of the Korean Teachers and Education Workers’ Union,” the slogan said. The union has become an influential force in the educational system here. Members have tried to infuse students with more liberal thoughts on various social issues. Today, the union has grown to a nationwide organization that claims a membership of 100,000. Its recent involvement in social affairs emerged when the union said it would write to parents to encourage their participation in the anti-U.S. beef protests. Kong’s election, then, is a clear opportunity for the current administration to go on the offensive. Yesterday, the Education Ministry said it had ordered schools to educate students on the benefits of importing of U.S. beef. Meanwhile, the Unification Ministry has denied the union its request to meets its counterparts in North Korea. Internet technology is another area of uncertainty with the news administration. While former president Roh Moo-hyun used the Internet to mobilize supporters in the presidential election and gave his support to Oh-myNews!, an Internet-based daily news site, the current administration and ruling party seem unimpressed by the wonders of technology. In fact, a hint of disdain is easy to detect. Grand National Party lawmakers recently submitted a bill to the National Assembly that would give the Korea Communications Commission the power to shut down Internet sites judged to contain illegal or slanderous material. Connecting the dots on this particular move isn’t that hard. When protests of the import of U.S. beef were at their height, President Lee publicly warned about the downside of the Internet, spurred by the belief within the administration that the government was victimized by an Internet rumor mill. Some experts said President Lee had fallen into the trap of trying too hard to go in the opposite direction of his predecessor. “It’s all about an anything-but-Roh approach to virtually all matters that is causing mistakes,” said Lee Nae-young, a professor at Korea University. “It’s something embedded so deeply and it’s not only the president but the inner circle as well. Selective denial would be much more rational and yield better results,” Kim said. But President Lee’s move to the right has encountered a degree of bad timing. While experts predicted a downturn in inter-Korean relations, the unexpected shooting of a South Korean tourist at the Mount Kumgang resort has only accelerated the anticipated deterioration of bilateral ties. Unlike at the last Olympics in Athens in 2004, the two Koreas didn’t march at the opening ceremony of this year’s Games in Beijing beneath a joint flag. A joint entrance had been taken for granted before this year’s political tensions. Meanwhile, Seoul’s demands for a joint investigation into the shooting death have fallen on deaf ears and the lack of a reliable channel to work out a compromise has put both Koreas in a stalemate, threatening to set back inter-Korean relations to pre-Sunshine Policy days. Support for Lee has fallen very quickly. Public opinion polls conducted at the end of last month had President Lee’s approval rating below 20 percent. Considering he apologized in public twice already for failing to communicate, the latest numbers indicate that the president still has not found an efficient way to talk to the people of Korea and build support. (Source: Joongang Ilbo.) Survey: Lee Approval Rating Rising (Aug 2008) According to the results of a KBS opinion poll, 59 percent of the respondents said the president was not doing a good job, while 31 percent said he was. The other ten percent did not give an answer. More than 29 percent of those polled cited economic woes and inflation as the biggest problems affecting Korean society. Twenty percent said social bipolarization, and another 15 percent cited unemployment and job security concerns as the major issues. Asked about South Korean assistance to the impoverished North, more than 68 percent of those surveyed said a decision should be made depending on the North's attitude, whereas 22 percent called for unconditional humanitarian aid and another ten percent said they were opposed to any assistance. On the Dokdo issue, nearly 74 percent of the respondents urged Seoul to engage in active diplomacy to let the world know the islets are Korean territory, while another 20 percent called for military presence on the islets to increase effective control. Slightly less than 4 percent of those polled said Seoul should refrain from reacting to Japan's territorial provocation. (Source: KBS.) Lee's bid to slash tax for the rich estranges ordinary people (Sep 2008) The alleged "pro-rich" policies by the administration of President Lee Myung-bak are again in the headlines, with an overwhelming majority of netizens venting resentment at a controversial government bid to gradually scrap special property taxes for owners of expensive homes. Refusing to heed public criticism that the proposed tax cuts are preferential to the wealthy, Lee on Wednesday declared that his government is strongly determined to push through the revision of the comprehensive property taxation system. Lee explained that the government proposal, which would abolish the hefty comprehensive property tax for owners of homes valued over 600 million won (US$522,000) each and steeply lower the special tax on homes priced above 900 million won per unit, is primarily intended to rectify the problematic taxation system. "The genuine purpose for the planned property tax cuts for owners of expensive homes is not to lower tax burdens for the wealthy, but to correct a wrongful taxation system," Lee was quoted as saying by presidential spokesman Lee Dong-kwan. But the president didn't elaborate on the problems with the special comprehensive property taxes legislated by Lee's predecessor, Roh Moo-hyun, in 2006 to help stabilize the local real estate market. Currently, the owner of a home valued at 600 million won pays about 1 million won in comprehensive property taxes annually, while a house valued at 900 million won incurs a special ownership tax of slightly over 2 million won a year. The comprehensive property taxes are collected in addition to regular property taxes. Under the Lee government's revision, owners of homes valued at less than 900 million won each will be exempt from the tax, while the amount of comprehensive property tax for the owner of a 900 million won home will be reduced to a mere 20,000 won. The revision is subject to approval from the National Assembly. Separately, the Constitutional Court will soon rule on the constitutionality of the comprehensive property tax. But the outlook for parliamentary approval of the property tax reduction bill remains murky in the face of fierce resistance from opposition parties, as well as ordinary citizens. Interestingly, many lawmakers from even the ruling Grand National Party (GNP) are also opposed to Lee's bid to repeal the special property tax for the rich, apparently for fear of backlash from voters. In a poll of 1,000 adults conducted by a Seoul-based civic group, 83.7 percent insisted that the present hefty property taxes on owners of high-end homes should be retained or reinforced. Notably, 66.4 percent of the respondents said the taxation system should be revised in a way that levies heavier taxes on owners of expensive real estate properties. "The Lee government will surely face severe public resistance if it pushes ahead with policies that are favorable to the wealthy and privileged. The president must heed public opinion," Rep. Lee Yong-sup of the main opposition Democratic Party said. "Instead of pursuing indiscriminate tax reduction policies, the government has to pay greater attention to reviving the sluggish economy and improving the public livelihood," said Rep. Lee, who served as a construction minister under Roh. Within the GNP, lawmakers elected from the affluent southern Seoul districts agree to the proposed reduction of 'property wealth' taxes, but the majority of ruling party lawmakers are reluctant to extend support. "I'm opposed to the tax revision bill because it is lacking in measures to crack down on real estate speculation," said Rep. Won Hee-ryong of the GNP. "The revised bill will surely benefit owners of multiple expensive homes, in particular. What is worse, the timing for the tax reduction policy is regrettable, as the government is now supposed to pay full attention to revitalizing the economy and taking care of the fragile financial sector." Ordinary citizens and netizens, already disappointed by Lee's repeated appointments of wealthy and scandal-ridden figures as Cabinet ministers and senior presidential secretaries, are reacting cynically. "The Lee government is only interested in the welfare of the richest 2 percent of the population. The remaining 98 percent of the people have to pay more taxes to make up for the tax revenue shortfall. This government is really working for the rich," a netizen grumbled in a post on the Web portal Naver. Shortly after his inauguration in February, Lee came under fire for filling almost all his Cabinet and secretarial posts with people with academic, regional and religious connections to him. Critics and opposition parties even coined new words using names of popular TV actresses, like "Kang Bu Ja" and "Ko So Young," sneering at the academic, religious and regional common points of Lee's Cabinet ministers and senior secretaries. Even the conservative media denounced Lee's personnel policy, but the overly self-confident president turned a deaf ear to the criticism. Kang Bu Ja is a combination of initials of Korean words meaning "land-rich people living in southern Seoul," while Ko So Young stands for Korea University, Somang Church and the area of Youngnam, also known as the Gyeongsang provinces. Lee spent his childhood in the southeastern province of Gyeongsang, graduated from Korea University and had long attended Somang Church in southern Seoul before being elected president last December. Adding to the public resentment, many of the Cabinet ministers and senior presidential secretaries were found to be involved in ethically and legally problematic real estate transactions years ago. Real estate speculation is not illegal, but is morally criticized in Korea. The public approval ratings of the embattled president have remained in the low 20-percent range in various media polls released recently. (Source: Yonhap News.) Whoops -- Head of President's Fan Club Wanted (Oct 2008) Prosecutors are seeking to arrest the head of a fan club for President Lee Myung-bak over an allegation that he received a bribe from a troubled company in return for influence-peddling. Jung Gi-taek, 60, who serves as the head of ``Myung Love,'' the second-largest civic group supporting the President, is at large, large prosecutors said. He allegedly received a 400 million won bribe from an illegal pyramid selling company, promising to help the firm avoid investigation of alleged fraud by using his connection with Cheong Wa Dae. The arrest warrant for Jung was issued Thursday but he has been on the run for over a month. Prosecutors have been looking into the case as Jung's assistant secretary was arrested last August on the charge that he received a huge bribe from the pyramid selling company, which was charged for fraud involving 130 billion won. The secretary proposed that the firm provide 2 billion won to his boss in return for freeing the company from the ongoing fraud investigation. Out of the requested sum, 400 million won was handed over to Jung, prosecutors said. Prosecutors are looking into the possibility the bribe was used to lobby politicians. (Source: Korea Times.) Former vice minister accused of graft found dead (Oct 2008) A former vice minister accused of bribery was found dead in his home on Friday, police said, the latest in a string of high-profile suicides. Kim Yung-chul, 61, who resigned from his post in Prime Minister Han Seung-soo's office last week, was found dead in a bathroom of his Seoul home by his daughter at around 8 a.m., police said. Police found a suicide note to his wife that read, "I love you. I am sorry. It's too hard, I am leaving first." Allegations recently emerged in the media that Kim pocketed tens of millions of won from an environmentally-friendly energy developer, Kenertec Co., while serving as the head of a state-run energy firm from 2002 to 2005. Prosecutors said the investigation was still at an initial stage and that there had been no direct questioning. "Investigators were looking into allegations against Mr. Kim, but they had no details yet," a prosecutor at the Supreme Prosecutors' Office said on condition of anonymity. "We are surprised and sad." Some media reports referred to the allegations as the first corruption case involving the Lee Myung-bak government. Kim, known by colleagues as a man of integrity and as having a sensitive nature, had claimed innocence. (Source: Yonhap News.) 13 History Commissions to Get W206 Bln Next Year (Oct 2008) The government will grant next year 206.2 billion won (168.5 million U.S. dollars) to 13 history review commissions that sparked ideological controversy under the previous Roh Moo-hyun administration. Critics say the incumbent Lee Myung-bak administration has practically broken its promise to reduce the number of truth commissions. (SITE NOTE: LMB promised an end to the "rule by committee" but this latest development is an extension of their warrant. Some scenarios could imply that (1) the leftists are attempting to stay in power and complete the damage that they started; or (2) the LMB factions have invaded these committees by appointment and are going to attempt to undo the past committees work. This is far fetched scene. We just believe that the bureaucracy allows extensions if their expenditures are revealed.) The budget for a commission on the Samcheong Re-education Camp victims was excluded after the body refused to disclose its sum. The figures were made public by lawmaker Shin Ji-ho of the ruling Grand National Party yesterday. The figure of 206.2 billion won is up from 208.9 billion won this year, though 2.7 billion won less than last year's. The 2009 budget of the commission for the democratization movement activists almost doubled from 10.9 billion won to 20.3 billion won (16.6 million dollars). People eligible for compensation have increased due to a law revision last year, which resulted in extending the period recognized for the movement from 1967 to 1964. The Commission on Forced Mobilization under Japanese Imperialism will also increase its budget from 11.4 billion won to 15.5 billion won next year (12.6 million dollars), up 4.1 billion won. The construction of a history museum in Busan is the main reason for the budget increase. Other commissions are extending their deadlines to complete their missions. A presidential commission on pro-Japanese collaborators, which was scheduled to end in May next year, will extend its term for another six months. Another on suspicious military deaths is reportedly considering extending its term, which ends in December. The 2009 budget for presidential commissions, however, will drop 4.8 billion won, and that of one probing the 1948 massacre on Jeju Island will be also cut from 6.5 billion won to 2.6 billion won (2.1 million dollars). "We strongly believed that the numerous history commissions would be merged or closed upon the launch of the Lee administration. What's more, they not only secured next year's budget but are also trying to extend their terms," Shin said. (Source: Donga Ilbo.) Few Adjustments Made to Pres. Lee`s `100 Nat`l Agendas` -- Except Canal Plan Gets Final Axe (Oct 2008) President Lee Myung-bak in a Cabinet meeting on 7 Oct made a few adjustments to his five national goals, 20 national strategies and 100 national agenda items. He largely retained the basic framework of the five national goals, 21 national strategies and 193 national agendas created by the presidential transition committee. Newly added were policy items, including those unveiled in President Lee’s Liberation Day address Aug. 15 and his televised forum with the people, and a few were eliminated. The cross-country grand canal project that President Lee said he would drop if the public opposed was removed while a redrawing of national administrative districts and promotion of green growth were inserted. The description of national agenda items was also written in an easier-to-understand format. The government selected 100 agenda items under 20 national strategies, and classified the strategies under the five national goals: a government serving the people; forming a vibrant market economy; ensuring proactive welfare; creating a country with abundant human resources; and becoming a mature and world-leading country. Placed under the goal of a government serving the people is observing rule of law, rooting out government corruption, and guaranteeing clean water and air and safe food. The emphasis on rule of law could be the government’s attempt to prevent illegal acts as seen in anti-U.S. beef protests earlier this year. Under the vibrant economy goal is deregulation for win-win development for both the Seoul metropolitan and provincial areas, fostering new industries to cope with climate change, and steering the country more toward openness. The win-win development implies deregulation in the Seoul metropolitan area to a reasonable degree and the country’s recreation reflects the “five plus two” plan of dividing the country into five major and two special blocs. Housing assistance and guaranteeing a secure life after retirement are included in the goal of proactive welfare. Consistent efforts to make North Korea abandon nuclear weapons and the creation of a world-class national brand are classified under the goal of making the country a mature world leader. A key government source said, “To achieve the national agendas, the Office of Prime Minister will check progress of each ministry every quarter and propose it at the national agenda review meeting. The president will hold a national agenda report meeting at least once a year.” (Source: Donga Ilbo.) Roh-Era Remnants Still Refusing to Go (Oct 2008) Some 26 chiefs and auditors of agencies appointed by the previous government are refusing to heed government calls to resign, flaunting a Korean tradition that sees a mass exodus of senior civil servants whenever there is a change of government. A list submitted by Cheong Wa Dae to the ruling Grand National Party recently shows four chiefs of agencies appointed by the Roh Moo-hyun administration are refusing to step down. They are Arts Council Korea Chairman Kim Jung-heun, Korea Culture & Content Agency President Ko Suk-man, Korea Press Foundation Chairman Park Rae-boo, and Korean Film Archive Director Cho Sun-hee. However, Park has expressed his intention to resign by the end of October. Among auditors at various agencies, five former presidential secretaries or officials are refusing to resign. Eight officials who were members of the former ruling Uri Party are also still working at various organizations. (Source: Chosun Ilbo.) (SITE NOTE: The enemy within. The protectors of the left-leaning agendas still are a thorn in LMB's side. The next question should be -- Are these positions or committees necessary?) Lee indicates sweeping overhaul of bureaucracy (Dec 2008) President Lee Myung-bak said on Monday that his bid for economic reforms and changes won't be hindered by the ongoing economic difficulties, urging ranking civil servants to follow his administrative vision and philosophy in weathering the unprecedented financial crisis. Meeting with top officials of the land, agriculture, public administration and environment ministries over their key policy goals for 2009, Lee warned that some reform-resistant bureaucrats, who gained rapid promotions in the previous liberal administration, are still passive in enforcing his reform and stimulus measures. "Civil servants have to take the lead (in overcoming the crisis). If some of them fail to keep up with the speed (of reforms and changes), the entire march will be slowed," said Lee. "Civil servants are required to firmly establish their own state vision so that they can help overcome the crisis and make preparations for the new era. Their unified attitudes will help the nation upgrade its global competitiveness." According to political watchers, Lee's remarks may be a signal of an upcoming sweeping shakeup of reform-shy ranking officials at major ministries, who are blamed for failing to faithfully carry out the conservative president's reform policies. Over the past week, all "Grade One" officials at half a dozen ministries, including education, foreign affairs, agriculture and unification, have offered to resign, as the conservative Lee administration strived to further distance itself from policies devised by his liberal predecessor, Roh Moo-hyun. Following the upcoming replacement of top government officials, Lee is expected to conduct a Cabinet reshuffle early next year to revamp the overall administrative atmosphere ahead of his first inaugural anniversary in February. Over the weekend, the Lee government announced an ambitious plan to shed 19,000 jobs in the public sector, with 69 major state-run corporations slashing 10 percent to 37.5 percent from their current payrolls in the coming three to four years. (SITE NOTE: Isn't it amazing that that is about the number that Roh added to the ballooning bureaucracy?) "Economic circumstances are worsening. But we will never slow our efforts for changes and reforms. All civil servants have to join forces to revitalize the economy and implement reforms," said the president. He instructed the four ministries to execute their 2009 budget spending "swiftly and efficiently," deepen inter-ministerial cooperation in major public works projects and minimize waste of taxpayer money. (Source: Yonhap News.) |
