updated 6/21/2004 3:16:18 PM ET 2004-06-21T19:16:18

Stung during the 1990s Democratic fund-raising controversy, John Kerry is returning a $2,000 check from the son of South Korea’s disgraced ex-president after learning the donor was charged with tax evasion.

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Kerry’s presidential campaign also acknowledges that some of its fund-raisers met with a South Korean government official who was trying to organize a Korean-American political group. That official has been sent home amid questions he was involving himself in American politics.

The Kerry campaign said it did not know about the $2,000 donation from Chun Jae-yong or his background until informed by The Associated Press. “We are sending the check back,” spokesman Michael Meehan said.

Chun Jae-yong was arrested in February by South Korean authorities on charges of evading taxes on $14 million in inheritance money. His father, former president Chun Dooh-hwan, was convicted in 1997 on bribery charges.

Chun Jae-yong was a business partner with Rick Yi, one of Kerry’s major fund-raisers in the Asian-American community. Yi acknowledged soliciting the donation from Chun last summer before learning of his legal problems.

Yi has raised $500,000
“I didn’t think anything wrong of it,” said Yi, who has raised more than $500,000 for Kerry and Democratic causes and is listed as one of the campaign’s fund-raising vice chairmen. “If I had known who he was at the time I probably would not have taken the money.”

Yi, a former military attache in the Clinton White House, said he and Chun were business partners for about six months last year in a Duluth, Ga., company called OR Solutions Inc. When making his donation Aug. 11, Chun listed himself as the company’s president and chief operating officer.

The same day, Yi also made a $2,000 contribution to Kerry, listing himself as chairman and chief executive of OR Solutions. Yi said Chun had asked him to help set up the company and that he ended his affiliation late last fall.

Yi said Chun showed him a Social Security card before making the donation to prove he was a legal U.S. resident allowed to donate to political campaigns. By law, the maximum individual donation is $2,000.

Yi also confirmed that while on Kerry fund-raising trips to California, he met at least three times with Chung Byung-man, the South Korean government’s vice consul in Los Angeles and that they discussed forming a political group to organize influential Korean-Americans that would be called The Korean-American Leadership Council.

“It generically was being called a political action committee for the Korean-American community,” Yi told The Associated Press. “He (Chung) asked me to spearhead this council. I rejected his proposal. I don’t have time.”

Strained relations
South Korean-U.S. relations have been strained over the North Korean nuclear weapons program and the Bush administration’s decision to reduce the number of U.S. troops in South Korea.

Yi said his conversations with Chung never centered on fund raising and that many of the people the counsel was suggesting for the group were Republicans. He said, however, he found it odd that a South Korean diplomat was trying to organize an American political group.

“I asked him that, ’Is this appropriate for a diplomat to do?’ He said he was only starting this up because there was no Korean-Americans to do it. Once two or three candidates were identified, he would hand it over.”

Yi said he and Chung never discussed using the group to help Kerry and that he never solicited donations for the candidate in Chung’s presence. But he acknowledged that Chung introduced him to some in California as one of Kerry’s main fund-raisers.

“I don’t doubt somewhere down the line, Chung said, ’This is Rick Yi, he is one of the persons helping John Kerry.’ That is normal in their culture, but that never led to Chung or I asking for money.”

Yi wasn’t the only Kerry fund-raiser approached by Chung.

California lawyer David K. Lee said he was asked to dinner by one of Yi’s fund-raising deputies and was surprised when Chung showed up. He said Chung talked to him and others present about creating a group modeled after the Group 100, which has become a strong political voice for Chinese-Americans.

“Whatever agenda that he had, whether it was political or personal or governmental, I really don’t know,” Lee said. “I just thought the most basic assumption for me was that he was doing something good for the community.”

Back to South Korea
The South Korean government said Friday that Chung returned home on May 16 as part of a regular rotation.

The Los Angeles consulate has heard “speculation” that Chung was supporting the Democratic Party and Kerry but hasn’t investigated and doesn’t believe Chung violated a prohibition against foreign involvement in politics or any U.S. law, spokesman Min Ryu said.

Lee said there is heightened sensitivity in the Asian-American community after the 1996 fund-raising scandal involving it and the Clinton White House.

“I think the people who are experienced in this field know the repercussions and the impact that that had on the Chinese-American community and overall on the Asian-American community and they don’t want to repeat that mistake,” Lee said.

Bruce Lee, a top Democratic National Committee fund-raiser who helped organize a major Asian-American fund-raising event Friday night for Kerry, said he, too, began to hear concerns in the community, looked into them and concluded nothing wrong had occurred.

Bruce Lee dismissed the allegations as rumors among rival camps of fund-raisers. “I treated it as gossip. And I didn’t think much more of it,” he said.

Vetting increased
The Democratic Party markedly increased its vetting of fund-raisers and donors in the late 1990s after the fund-raising scandal centered mostly on Asian-Americans. More than a dozen Democratic fund-raisers or donors were convicted of federal crimes, and President Clinton and his wife, Hillary, acknowledged they used White House coffees and overnight stays in the Lincoln bedroom as rewards to lure large donations.

Kerry has been raising record amounts of money for his presidential campaign as he tries to level the playing field with President Bush, who has collected an unprecedented $218 million for his re-election. Kerry’s campaign checks the backgrounds of all fund-raisers and requires non-citizens to show proof they are legal residents allowed to donate.

The Massachusetts senator has been forced on several occasions to answer questions or return donations following news reports that he accepted money from donors with unsavory backgrounds.

For instance, Kerry received $10,000 in donations in the 1990s through Democratic fund-raiser Johnny Chung after his Senate office arranged a tour for Chung at the Securities and Exchange Commission.

Chung later pleaded guilty to making illegal donations, including some to Kerry.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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