VZCZCXYZ0000
RR RUEHWEB

DE RUEHUL #3616/01 3650339
ZNR UUUUU ZZH
R 310339Z DEC 07
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 7891
RHMFISS/COMUSKOREA J5 SEOUL KOR
RUACAAA/COMUSKOREA INTEL SEOUL KOR
RHMFISS/COMUSKOREA SCJS SEOUL KOR

UNCLAS SEOUL 003616 
 
SIPDIS 
 
SIPDIS 
 
DEPT OF STATE FOR DRL ATTN: KAREN CHEN 
 
E.O. 12958: N/A 
TAGS: KS KN PREF ELAB
SUBJECT: FREE NK RADIO DIRECTOR KIM SEONG-MIN INDICTED FOR 
EMBEZZLING ROKG FUNDS 
 
SUMMARY 
------- 
 
¶1.  (SBU) The Seoul Southern District Prosecutor's Office on 
December 12 revealed that Free North Korea Radio Director Kim 
Seong-min was indicted on charges of fabricating employment 
documents of North Korean defectors in order to receive government 
subsidy funding for employing North Korean defectors at his 
organization.  Kim, himself a North Korean defector, was also 
charged with not properly compensating defectors for their editorial 
contributions that were used as part of the radio's programming.  It 
was reported that the Prosecutor's Office had already confirmed most 
of the charges against Kim during several investigative sessions. 
Kim is expected to resign as Director of Free NK Radio.  Meanwhile, 
ten other defectors were indicted at the same time as Kim for 
similar charges of embezzling ROKG defector employment subsidy 
funding.  END SUMMARY. 
 
DETAILS OF KIM SEONG-MIN'S RECENT INDICTMENT 
-------------------------------------------- 
 
¶2.  (SBU) According to various South Korean media reports, Free 
North Korea Radio Director Kim Seong-min was indicted on charges of 
embezzling KW 43 million (approximately USD 43,000) in ROKG defector 
employment subsidy funding by falsely declaring the salaries of his 
North Korean employees.  (NOTE: As part of a 50 percent-wage subsidy 
package, the ROKG grants up to KW 700,000 per month to 
businesses/organizations for each North Korean defector  they 
employ.  END NOTE.)  Kim was also charged with applying for 
additional subsidy funding by using the names of defectors who were 
not employed in his organization.  A December 12 Kookmin Ilbo 
article added that Kim was also charged with not properly 
compensating defectors for their editorial contributions that were 
used as part of the radio's programming. 
 
¶3.  (SBU) In a written apology posted on the Free North Korea Radio 
homepage on December 15, Kim acknowledged most of the charges, while 
trying to explain the financial circumstances that led him to rely 
on more "expedient means" to increase the monthly wages of his North 
Korean employees from KW 300,000 to KW 800,000 using the KW 500,000 
in subsidy funding that his organization received from the ROK 
government for each defector employed by the NGO.  Kim also claimed 
that the "fake" defector employees were either former or irregular 
employees, who had participated in producing the organization's 
broadcasting content by contributing editorials or recording 
programs, and thus were compensated for their "work" using the 
subsidy money.  Kim also stated that his organization, according to 
its statute, was not obliged to pay defectors for their written 
testimonies, thus rebutting the claim that his organization was not 
properly paying defectors for their editorial contributions. 
 
¶4.  (SBU) Based on these justifications, Kim criticized the South 
Korean press for portraying him as a "worthless defector," who had 
taken advantage of loopholes in the ROKG defector support system to 
promote his private interests.  Kim concluded his statement by 
demanding that the Korean press correct its reporting, while 
acknowledging the need to take responsibility for breaking the law. 
Kim expressed his intention to resign from his position as Director 
of Free NK Radio upon the approval of his organization's 
Broadcasting Committee, which is chaired by Hwang Jang-yop -- the 
highest-level North Korean official to come to the ROK.  (NOTE: Kim 
is currently waiting for judicial action on his case.  END NOTE.) 
 
 
OTHER DEFECTORS INDICTED FOR SIMILAR CHARGES 
-------------------------------------------- 
 
¶5.  (SBU) Ten other defectors were indicted at the same time as Kim 
for similar charges of embezzling ROKG defector employment subsidy 
funds by fabricating documents that were submitted to the Ministry 
of Labor (MOL) -- the ROK government agency that handles defector 
employment issues.  Among the ten who were indicted, two are 
currently in custody, including the owner of a chicken restaurant 
who had received KW 67 million (approximately USD 67,000) from the 
ROKG during a two-year period for "employing" three defectors.  A 
Mr. Choi, the other defector in custody, was charged with conspiring 
with six other defectors to receive approximately KW 20 million in 
subsidy funding during a 22-month period exploiting similar 
labor-related provisions exclusively for defectors. 
 
LOOPHOLES IN ROKG EMPLOYMENT SUPPORT SYSTEM 
------------------------------------------- 
 
¶6.  (SBU) According to the Prosecutor's Office, the recent 
indictments resulted from investigations that started in July 2007. 
The fundamental reason for these crimes, according to an 
investigator, was because of the MOL's mismanagement of defector 
funding.  In fact, Maeil Business TV reported that the MOL's 
Employment Assistance Center had given out related funding without 
 
any oversight measures in place.  "MOL just takes care of the 
paperwork and the documents are sent to the Ministry of 
Unification," said an unnamed MOL official. 
 
¶7.  (SBU) This is also the case for other types of employment 
subsidy funding for other social minority groups, resulting in over 
100 cases of fraud each year.  The MOL, however, attributed the 
current difficulty in preventing such crimes to a lack of manpower 
within the ministry that prevents regular on-site visits to 
businesses and individuals that receive government subsidy funding, 
and acknowledged the need to institute stricter procedures in 
granting and maintaining governmental funding. 
 
COMMENT 
------- 
 
¶8.  (SBU) News of Kim Seong-min's recent indictment has disappointed 
Kim's South Korean sponsors and defectors, who have regarded Kim as 
a strong leader within the defector community.  There are 
unconfirmed rumors that some disgruntled former employees of Free NK 
Radio, who were suspicious of Kim's use of the subsidy funding, 
tipped-off the Prosecutor's Office about his "illegal" methods. 
Since Kim does not refute many of his charges against him, the news 
is likely to hurt the reputation of his organization, which stood 
out as the first defector-run radio station to broadcast into North 
Korea.  Meanwhile, the other cases serve to highlight the fraudulent 
activities of defectors, which not only reflect some of the negative 
side-effects of governmental resettlement assistance policies, but 
also point to the temptations that defectors face in relying on 
illegal methods to make "easy" money in the ROK.  END COMMENT.