[Congressional Record Volume 144, Number 74 (Wednesday, June 10, 1998)]
[Extensions of Remarks]
[Pages E1097-E1098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             WELCOMING SOUTH KOREAN PRESIDENT KIM DAE JUNG

                                 ______
                                 

                           HON. SAM GEJDENSON

                             of connecticut

                    in the house of representatives

                        Wednesday, June 10, 1998

  Mr. GEJDENSON. Mr. Speaker, it is a pleasure to welcome South Korean 
President Kim Dae Jung to our country, on his first state visit. I join 
my colleagues in wishing President Kim the best as he assumes the 
duties and responsibilities of his new office. Mr. Kim's victory last 
fall was a triumph for democracy and reform--and above all, for the 
people of South Korea. Since assuming office, President Kim has been 
trying to fulfill his campaign promises, to bring a new era to South 
Korea, one recognizing democracy and human rights, one that is free of 
corruption and embraces economic reform and the rule of law.
  This is a time of great promise for South Korea. The steps the 
government has taken

[[Page E1098]]

are certainly in the right direction, but the path to true reform is 
long indeed. In particular, the IMF reform package accompanied by the 
specific reform measures has enjoyed some success. However, much more 
needs to be done: Justice must be served to those directly wronged by 
the old regimes, and some punishment should be meted out on the 
wrongdoers. Old, long held, practices associated with crony capitalism 
need to be abandoned.
  Specifically, one series of crimes allegedly perpetrated by the old 
regimes that must be investigated involves several companies that were 
subject to the ``rationalization'' policy of the mid-80s. The companies 
included Kuk Je, Jung Woo, Jung A, Nam Kang, and Samho were forced to 
transfer all of their assets to allies of the Chun government. Samho, 
formerly one of Korea's largest construction companies, helped to build 
much of Korea's infrastructure, including the subway, water filtration 
system, first skyscraper and much of the country's affordable, middle 
income housing. However, because the owner, Mr. B.K. Cho did not 
participate in the widespread corruption associated with the government 
of President Chun, his company and his family's personal possessions 
were taken by the government.
  Samho was one of Korea's largest construction companies valued at 
over $750 million at the time of this illegal transfer. The company had 
projects throughout Korea, the Indochina Peninsula, Saudi Arabia, and 
Kuwait. Subsidiary companies included a textile plant, a chemical 
company, and one of the Korea's largest chains of stores. Now, Samho is 
a wholly owned subsidiary of Daelim Construction Company, operating 
under the same name. Daelim's director in the 1980s was a friend of the 
Chun family. Daelim is now the third largest construction company in 
Korea and one of the largest conglomerates with over 11,000 employees 
and annual revenues in excess of $5 billion. However, it was a 
relatively minor construction firm prior to the illegal acquisition of 
the Cho assets.
  Many of the individuals in the Chun and Roh governments who were 
responsible for these illegal activities remain in powerful positions 
in the country. Kim Mahn Je was Chun's Minister of Finance, and is now 
the chairman of the Pohang Iron and Steel Company. He serves in his 
current position at the discretion of the Kim government. Kim 
threatened the director of Samho with physical force if he did not sign 
over the company, saying his orders came from ``the Blue House,'' or 
from President Chun himself.
  Lim Chang Yuel, who worked with the Minister of Finance Kim Mahn Jae 
under Chun, recently guided Korea through its IMF negotiations, and is 
currently running for governor of the Seoul province for President 
Kim's party. Lim was in charge of ``forced liquidations'' of 
corporations for President Chun.
  Only one meager effort has been made to right the wrongs of the past 
for these companies. In July 1993, the Constitutional Court of the 
Republic of Korea held that the liquidation of Kuk Je was invalid, and 
awarded modest, although not fair, compensation to its former owners. I 
strongly believe that an investigation of these crimes would engender 
even greater confidence in the government of President Kim and his plan 
of implementation of the necessary reforms. By demonstrating that the 
era of corruption and crony capitalism is in the past, the Korean 
Government can foster greater economic growth and demonstrate that 
Korean corporations and government alike abide by the rule of law.

                          ____________________