INVESTIGATION OF KOREAN-AMERICAN RELATIONS

Page 387

Conclusions and Recommendations

The subcommittee findings regarding the Moon Organization may be summarized as follows:

(1) The UC and numerous other religious and secular organizations headed by Sun Myung Moon constitute essentially one international organization. This organization depends heavily upon the interchangeability of its components and upon its ability to move personnel and financial assets freely across international boundaries and between businesses and nonprofit organizations.

(2) The Moon Organization attempts to achieve goals outlined by Sun Myung Moon, who has substantial control over the economic, political, and spiritual activities undertaken by the organization in pursuit of those goals.

(3) Among the goals of the Moon Organization is the establishment of a worldwide government in which the separation of church and state would be abolished and which would be governed by Moon and his followers.

(4) In pursuit of this and other goals, the Moon Organization has attempted, with varying degrees of success, to gain control over or establish business and other secular institutions in the United States and elsewhere, and has engaged in political activities in the United States. Some of these activities were undertaken to benefit the ROK Government or otherwise to influence U.S. foreign policy.

(5) While pursuing its own goals, the Moon Organization promoted the interests of the ROK Government, and at times did so in cooperation with, or at the direction of, ROK agencies and officials. The Moon Organization maintained mutually beneficial ties with a number of Korean officials.

(6) The Moon Organization established the KCFF ostensibly as a non-profit foundation to promote Korean-American relations, but used the KCFF to promote its own political and economic interests and those of the ROK Government.

(7) The Moon Organization extensively used the names of Senators, Congressmen, U.S. Presidents, and other prominent Americans to raise funds and to create political influence for itself and the ROK Government.

(8) A Moon Organization business is an important defense contractor in Korea. It is involved in the production of M-16 rifles, antiaircraft guns, and other weapons.

(9) Moon Organization agents attempted to obtain permission from an American corporation to export M-16’s manufactured in Korea. The M-16’s are manufactured under a coproduction

34-674 O - 78 - 26

388

agreement approved by the U.S. Government, which puts M-16 production under the exclusive control of the Korean Government. Despite this, Moon Organization representatives appeared -- apparently on behalf of the Korean Government -- to negotiate an extension of the agreement.

(10) The Moon Organization attempted to obtain a controlling interest in the Diplomat National Bank by disguising the source of funds used to purchase stock in the names of UC members.

(12) The Moon Organization used church and other tax-exempt components in support of its political and economic activities.

(13) Although many of the goals and activities of the Moon Organization were legitimate and lawful, there was evidence that it had systematically violated U.S. tax, immigration, banking, currency, and Foreign Agents Registration Act laws, as well as State and local laws related to charity fund, and that these violations were related to the organization’s overall goals of gaining temporal power.

Despite the Moon Organization’s cooperative relationship with the ROK Government the UC was far less influential as a religious movement in Korea than elsewhere. A large proportion of the hundreds of Koreans interviewed in the course of the investigation said that they had never heard of Moon or the UC until the early or mid-1970’s, when their activities became widely publicized. In the United States, the UC appears to have had little success in attracting followers from the Korean community. Most Korean-Americans interviewed expressed varying degrees of embarrassment or hostility toward Moon and the UC; few saw them as a positive factor in Korean-American relations.

The subcommittee found that the Moon Organization has had a number of influential allies in the Korean Government, including Kim Jong Pil, Pak Chon Kyu, and others.

Although investigations and publicity in the 1976-78 period appear to have had an effect on the degree of influence Moon’s supporters had with the Korean Government, there were continuing indications that the Moon Organization retained significant support.

Many of the activities of the Moon Organization would not raise questions of impropriety if carried out openly and without violations of laws. The subcommittee does not fault the many Americans, Koreans, and others who identified themselves with Moon Organization-sponsored activities such as the Little Angels, or who shared the Moon Organization’s expressed concerns about communism and South Korean security.

However, the Moon Organization’s ulterior motives behind even its most benign activities tended to negate its positive contributions. For example, the Little Angels, a highly accomplished children’s dance group, undoubtedly improved the image of Koreans around the world and in particular contributed to the Americans’ understanding of Korean culture. The Korean Government’s decision to bar the Little Angels from traveling outside Korea was a loss for Korean-American relations. The demise of the little Angels as a touring group followed growing public awareness of its ties to

389

Moon, who -- after founding and quietly backing the group -- increasingly used it to further his political and economic goals. In his own speeches to followers, Moon made it clear that the Little Angels, the annual science conference, and other seemingly philanthropic projects were in reality geared toward his ambitious and carefully thought plans for winning control and influence over political and other secular institutions.

Moon, like Tongsun Park, showed a keen understanding of the use of imagery in building political influence. Just as Tongsun Park used his close relationship with a few Congressmen to attract others, Moon used the names and pictures of prominent Americans, Japanese, Koreans, and others to create an image of power and respectability for himself and his movement. The multifaceted Moon Organization thereby obtained the help and cooperation of numerous Americans who had no idea they were contributing to Moon’s plan for world theocracy.

Like Tongsun Park and others who conducted pro-ROK influence activities in the United States, Moon and his organization acted from a mixture of motives and objectives. Service to Korea was combined with a desire to advance personal and organizational goals. Like Tongsun Park and others, Moon and his organization attempted to gain influence in Seoul through activities in the United States; to this end, the Moon Organization exaggerated its success in the United States to create influence in Korea and elsewhere. Thus, although the Moon Organization often acted for the ROK Government -- even to the point of accepting money for its services -- control and influence over Korean political institutions was no less a goal there than in the United States. In this respect, the Moon Organization was not an agent of influence for the ROK Government so much as it was a volatile factor in Korean-American relations, capable of distorting the perceptions each country held of the other.

In the United States, for example, Moon has aroused widespread antipathy. To the extent that his organization’s activities here are associated with Korea or the Korean Government, there is potential harm to Korean-American relations. Recent attempts by the ROK Government to dissociate itself from Moon seemed to recognize this problem. However, these attempts at dissociation came only in the context of a public controversy over Moon, investigations into Korean influence activities, and strained relations between the two countries.

The misuse of the names of prominent Americans by the KCFF was of concern to U.S. Government agencies as early as 1966. Much of the executive branch’s early awareness of Korean influence activities in the United Sates -- including those of Tongsun Park -- arose from State Department and congressional inquiries into KCFF publicity and fundraising activities. However, these activities were not then perceived to be linked to Moo. Later, when Moon’s activities generated publicity in the United Sates, there were numerous requests to the executive branch, as well as to the Congress and to State and local authorities, for information about Moon and for investigations of his organization’s activities. The response to these inquiries was fragment. Numerous investigations were launched by agencies such as the NEC, INS, and Depart-

390

ment of Justice which involved one or another component of the Moon Organization. The subcommittee’s investigation led it to conclude that these investigations were justified and should continue. However, the subcommittee believes that these investigations will be inconclusive and redundant unless they are coordinated with each other and treated as an investigation of essentially one organization. The subcommittee concludes that the following objective could be met by combining investigative activities related to the Moon Organization into an interagency task force:

(1) Consideration could be given as to whether apparently unrelated immigration, FARA, currency, banking, and other violations were in furtherance of a common scheme or plan.

(2) All existing information bearing upon the same subjects could be brought together and analyzed; earlier investigations which failed to do this allowed improper influence activities to continue until they caused a major public scandal affecting Korean-American relations.

(3) Maximum resources could be employed toward tracing cash and obtaining evidence from outside the United States.

(4) Tax money could be saved by combining related investigations and eliminating duplication of effort.

Executive Branch Task Force

(1) The Department of Justice, the SEC, the IRS, and other executive branch agencies currently investigation allegations relating to Sun Myung Moon, Pak Bo Hi, the UC, the KCFF, and other individuals and organizations comprising the Moon Organization (as described in this report) should coordinate their efforts and form an interagency task force.

(2) In addition to continuing present investigations, the task force should address itself to the following issues:

(a) Whether there have been systemic and planned violations of U.S. immigration laws and regulations in connection with the importation of large numbers of foreign nationals for purposes of fundraising, political activities, and employment in the Moon Organization business enterprises.

(b) Whether there have been systematic and planned violations of U.S. currency and foreign exchange laws in connection with the movement of millions of dollars of cash and other financial assets into and out of the United States without complying with appropriate reporting requirements.

(c) Whether U.S. tax laws have been violated through large cash transfers to individuals which were characterized as loans.

(d) Whether tax-exempt organizations such as the Unification Church, Freedom Leadership Foundation, Korean Cultural and Freedom Foundation, and International Cultural Foundation, have engaged in political, business, and other activities inconsistent with their tax-exempt status; and whether these organizations are so closely affiliated with each other and with non-tax-exempt business and organizations so as to render them ineligible for tax-exempt status.

(e) Whether there have been systemic violations of the Foreign Agents Registration Act by the Moon Organization.

391

(f) Whether there have been violations of currency, immigration, banking and tax laws in connection with Moon Organization investments in the Diplomat National Bank and other businesses in the United States.

(g) Whether there have been instances of charity fraud, violations of currency and immigration laws, and abuse of tax-exempt status in connection with the Moon Organization’s control over the Korean Cultural and Freedom Foundation.

(h) Whether there have been attempts to violate, or violations of, the Arms Export Control Act in connection with the manufacture, sale, or attempted sale of M-16 rifles or other armaments by agents of the Moon Organization.

(3) The task force should use the resources of the following agencies:
Department of Justice (including the FBI, Anti-Trust Division, and INS);
Department of Treasure;
Securities and Exchange Commission;
Federal Reserve Board;
Internal Revenue Service; and
Department of State.

(4) The Department of State should assist the task force in attempting to obtain witnesses, financial data, and other cooperation from foreign governments, particularly Japan and South Korea.

(5) The task force should seen information from appropriate State and local governments and should make information available to State and local governments for use in appropriate proceedings involving enforcement of their laws.

The subcommittee also recommends that appropriate committees of the Congress review certain information pertaining to the Moon Organization. Current U.S. tax laws and regulations made it impractical for the subcommittee to examine the tax returns of such Moon Organization components as the Unification Church International, which was denied tax-exempt status by the IRS. However, there is reason to believe that taxable Moon Organization components derive tax advantages from transfers to tax-exempt components. Since both taxable and tax-exempt organizations are used interchangeably in the Moon Organization, such tax advantages would enable the Moon Organization to pyramid economic power and achieve a substantial advantage over competing organizations. The subcommittee therefore suggests a review by the House Ways and Means Committee and the Senate Finance Committee -- which have access to tax returns -- to determine whether transfers of funds within the Moon Organization raise issues which point to the need for legislation to prevent the abuse of tax-exempt status. More specifically, the subcommittee recommends that the House Ways and Means Committee and the Senate Finance Committee review the applications for tax-exempt status (where applicable) and the tax returns of Moon Organization entities, including: Unification Church; Freedom Leadership Foundation; Unification Church International; International Cultural Foundation; Korean Cultural and Freedom Foundation; Tong-Il Enterprises; One-Way Productions; International Oceanic Enterprises; and News World Communications.

392

and determine whether:

(a) Income from abroad is properly reported.

(b) Deductions are taken by businesses for charitable contributions to tax-exempt organizations, the actual control of which is in the hands of the same persons and organizations in control of the businesses.

(c) New legislation or regulations are needed to prevent tax avoidance and pyramiding of economic power by means of recycling funds through an international organization, part of which is tax-exempt.

The subcommittee has also referred its findings to the Armed Services and Intelligence Committees of the House and Senate, and to the Munitions Control Board of the State Department, with the suggestion that more precise information be obtained without the Moon Organization’s role as a Korean defense contractor. During the investigation, the subcommittee found it very difficult to obtain reliable information about the extent to which Moon industries were involved in weapons production and sales. The Moon Organization has self-proclaimed goals of controlling political and secular institutions and a strident ideology which envisions the formation of a “Unification Crusade Army.” Moon’s speeches forsee an apocalyptic confrontation involving the united States, Russia, China, Japan, and North and South Korea, in which the Moon Organization would play a key role, Under these circumstances, the subcommittee believes it is in the interest of the United States to know what control Moon and his followers have over instruments of war and to what extent they are in a position to influence Korean defense policies.

Of particular concern is the Moon Organization’s involvement in the production and sale of M-16 rifles and other weapons provided to Korea under U.S. aid programs and subject to the Arms Export Control Act. In late 1977, Moon Organization representatives tried to renegotiate a coproduction agreement between Colt Industries and the ROK Government. The circumstances suggested they were secret envoys of the Korean Government which, under the coproduction agreement, has exclusive control over M-16 production. Although the ROK Government said it wanted to produce 300,000 extra M-16’s because of the need to equip its own forces, Moon Organization tried to get Colt’s agreement to export guns to third countries.

The subcommittee therefore recommends:

That the House International Relations Committee, the House Armed Services Committee, and the corresponding committee of the Senate ascertain whether businesses operated by the Moon Organization are engaging in the production or same of armaments supplied to the ROK Government through U.S. military aid programs, including coproduction agreements. Information about the role played by Moon Organization industries in Korean defense production should be sought from the Appropriate U.S. defense and intelligence agencies.