To: FaultLine who wrote (73790 ) 2/14/2003 9:25:48 AM From: aladin Respond to of 281500 S.Korea's Kim Sorry for Scandal Amid Nuclear CrisisI guess this means it wasn't just a Moonie rag creating a phony scandal - from our anti-administration crowd on the board Fri Feb 14, 4:46 AM ET Add Top Stories By Martin Nesirky SEOUL (Reuters) - South Korea (news - web sites)'s president apologized on Friday for a scandal involving cash payments to North Korea (news - web sites) but urged politicians to let the matter rest amid tensions over the nuclear standoff with Pyongyang and possible war with Iraq. The beleaguered 78-year-old Kim Dae-jung (news - web sites), 11 days from leaving office, defended his "Sunshine Policy" of seeking reconciliation with communist North Korea -- an approach already strained by the crisis between Pyongyang and Washington over the North's nuclear brinkmanship. The governing board of the U.N.'s nuclear watchdog agency on Wednesday declared North Korea in breach of atomic safeguards and sent the issue to the U.N.'s highest body, the Security Council. On Friday, North Korea rejected the International Atomic Energy Agency decision as "interference in our internal affairs" and said Pyongyang had no obligations to the IAEA since its withdrawal from the nuclear Non-Proliferation Treaty last month. Hours earlier, Kim said in a televised address: "The issue of Hyundai Merchant Marine sending money to North Korea has caused great controversy and concern among the people. I feel very sorry about this." His top North Korea adviser, Lim Dong-won, said Hyundai had briefed him at the time about $500 million in payments to the North in exchange for exclusive rights to seven business plans. Kim said he took responsibility for the scandal but urged politicians to let the matter rest. "Now is a time of rising tensions on the Korean peninsula and the serious North Korean nuclear issue, as well as an impending Iraq war which will have a huge impact on our country," said Kim. But the main opposition party, which controls parliament, said Kim's address had "raised more questions and suspicion." "His explanation provides the reason why an independent counsel should be appointed to investigate the scandal," the Grand National Party said in a statement. In Washington, the top Asia expert in the United States said the Bush administration was offering North Korea a chance to improve ties with the world and did not seek the imposition of U.N. sanctions, an action the North has said it would consider an act of war. The comments in Congress by Assistant Secretary of State James Kelly seemed aimed at accommodating China, which has viewed the prospect of sanctions with alarm, as well as calming tensions with the North. "GIVE-AND-TAKE" URGED In a separate speech on Friday, Kim renewed his call for Pyongyang and Washington to talk, saying "mutual give-and-take between America and the North is necessary." The impact of Kim's address on financial markets was restrained, although Hyundai Merchant Marine's stock rose eight percent in response to the half-hour briefing. South Korean Finance Minister Jeon Yun-churl said geopolitical tensions were weakening the economy but the government would not implement any big stimulus package because strong exports were likely to help. The political fallout from Kim's comments appeared limited in the short term, but analysts said the case was far from closed. "His address was an act of justification, not an apology," said Nam Joo-hong, professor at Gyonggi University in Seoul. "Roh Moo-hyun is going to have a hard time," he said. At issue is how the money was used and the role of government officials in a web of complex cash transfers, $200 million of which took place just days before Kim met North Korean leader Kim Jong-il in Pyongyang in June 2000. Kim did not admit wrongdoing and said he thought prosecution was not justified. He left it to Lim to deny allegations corporate cash and state loans were used to entice Kim Jong-il to hold the summit and open the way for more talks and exchanges. Follow-on North-South talks this week on economic projects including Hyundai's ended on Friday in Seoul with little progress. A joint statement called for more talks in April. In contrast to the nuclear crisis and the scandal over cash payments, there was a tangible step forward on the ground on Friday at the demilitarized zone (DMZ) when a new land route to a scenic mountain resort in the North was inaugurated. "This road opening is the first outcome of South and North Korea's rail and road projects agreed to in 2000. It showed South and North Korea have implemented the agreement and made a step forward to a real cooperation stage," said Vice Unification Minister Kim Hyung-ki at the ceremony on the east coast. The temporary road is the first new link across the DMZ since the 1950-53 Korean war. It was first tested earlier this month, and the Koreas agreed to use it for family reunions next week. POSSIBLE TROOP SHIFT In Washington on Thursday, Defense Secretary Donald Rumsfeld raised the possibility of shifting U.S. forces away from the DMZ and removing some of the 37,000 U.S. troops stationed in the South, many of them in forward positions. The subject is likely to be high on President-elect Roh's agenda after he takes office on February 25. Secretary of State Colin Powell (news - web sites) said he believed a diplomatic solution was possible in North Korea despite U.S. insistence on a regional approach rather than bilateral talks repeatedly demanded by Pyongyang. Kim Dae-jung, who won the Nobel Peace Prize for his Sunshine Policy, has had a tough twilight in office. Late last year, two of his three sons were found guilty of bribery and other charges. One was jailed and the other received a suspended sentence.