SEOUL, Feb. 4 (UPI) -- South Korea's much-touted efforts to reconcile with North Korea suffered a major setback as a controversy flared up that President Kim Dae-jung had bribed the communist regime to stage a historic inter-Korean summit in 2000.
A former intelligence officer has revealed that the South Korean leader funneled some 2 trillion won ($1.7 billion) to his North Korean counterpart, Kim Jong Il, in return for holding the summit, and lobbied foreign countries to get the 2000 Nobel Peace Prize.
With the cash, North Korea purchased key components for nuclear weapons, 40 Soviet-made MiG jets and a submarine from Kazakhstan, said the former agent known only by his family name, Kim.
The flap came just after government auditors confirmed that the country's giant business conglomerate Hyundai secretly transferred some $200 million, obtained from a South Korean state-run bank, to North Korea just ahead of the summit in June 2000.
Auditors said the purposes of the expenditures were unclear, but opposition lawmakers say the money was given to the North as "payment" for the unprecedented inter-Korean summit, which helped Kim Dae-jung win the Nobel Peace Prize. Under South Korean law, any secret financial aid to North Korea is illegal.
Both Korean governments have denied any wrongdoing. Park Jie-won, presidential chief of staff who arranged the Korean summit in a clandestine manner, said the government had not paid "a cent" to the North in exchange for the summit. Pyongyang has threatened to scrap inter-Korean reconciliation projects if the South took action over an alleged cash payoff.
Hyundai launched a money-losing cruise tour in 1998 to the North's sealed-off mountain resort on the east coast, spearheading Seoul's rapprochement with its communist neighbor. The project, the symbol for reconciliation between the Cold War rivals, has subsequently run into trouble because of a lack of tourists and Hyundai's financial woes. Hyundai is to pay North Korea $942 million in royalties to operate the tours through 2005.
Kim Dae-jung supports Hyundai's project to encourage rapprochement with North Korea under his "sunshine policy" aimed at improving inter-Korean ties by offering economic incentives.
Kim, who had previously denied knowing about secret Hyundai's dealings with the North, indirectly acknowledged them, saying the money was justified as it was necessary to "promote peace and the country's national interests."
He also has objected to a criminal investigation into the secret payoff scandal.
"The unique nature of South-North relations has forced me to make numerous tough decisions as the head of state," he said.
The payoff scandal is also a heavy burden on President-elect Roh Moo-hyun who takes office Feb. 25 for a 5-year term. Roh, who was elected on an inter-Korean reconciliation platform, hopes Kim to clear up the payoff allegations before he steps down.
Roh expressed regret over Kim's failure to come clean about the payoff scandal.
"Our position is: the truth must be revealed," said Roh's spokesman, Lee Nak-yon.
Roh's proposal of a political settlement to the payments dispute was rejected by the conservative opposition party that controls a majority of seats in the 273-member single-house legislature.
"The only way of cleansing the sin of deceiving the people is to confess frankly and apologize sincerely," said Park Hee-tae, acting chief of the Grand National Party.
The ruling and opposition parties have agreed in principle to push for an investigation by an independent counsel into the scandal, an opposition lawmaker told United Press International on condition of anonymity.
"The truce picture should be brought to light, and any illegal transaction cannot be justified. Even the president cannot exist above the law," said Choi Dae-kwon, a law professor at Seoul National University.
"If it is confirmed to have bribed North Korea, our North Korea policy should be revised from top to bottom," Dong-a Ilbo newspaper said in its editorial.
The two Koreas still are in a state of technical war since their armed conflict ended in an armistice but not a peace treaty. Their border is the world's last Cold War frontier with nearly 2 million troops on both sides.
