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86
had been partially funded by the first loan. (600)
The loans were initially approved on December 16, the day after the bank
opened, without a meeting of the loan committee, which was a violation of the
bank's own rules. Then, on December 31, the board of directors approved them
at a meeting. The minutes of the meeting stated that "Mr. Barr's vote would be
'nay' to the Korean Cultural and Freedom Foundation loan if Reverend Sun Moon
was associated with the group.
" 601
In February 1976, as a result of a routine audit, the U.S. Comptroller of the
Currency notified the bank that the loans to Pak and the KCFF had to be
considered as one loan, according to banking laws. Since the combined total
exceeded the bank's lending limit, the loans had to be curtailed by $25,000.
602
383
Pak paid off the loans in late 1976--after public controversy had begun over
his and Moon's role in the stock purchases--but only after borrowing the
$400,000 from Union First. The collateral for that loan was put up by the
International Cultural Foundation in Japan, part of the Moon Organization. Later,
when it became apparent that KCFF would not be able to repay the Union First
loan, the ICF treated the $400,000 collateral as a "donation" to the KCFF.
In the spring of 1976, media reports had begun to appear concerning
Diplomat National Bank stock purchases by Moon and church members. As a
result, the bank decided to encourage Moon and his followers to sell their stock.
Charles Kim conveyed this request to Pak, who was upset.
603
Moon agreed to
sell his stock, Pak to contact church members who owned stock to persuade
them to sell. Pak, however, told Kim he wanted to dictate the order of the
members' sales so as to minimize adverse publicity.
604
Thereafter, 12 owners
tendered their shares back to the bank for resale.
Only six members' shares were eventually resold. The reason was that the
addresses of record at the bank for a number of them were invalid by the time of
the resale (hence the shares are still held by the bank in their names) and
because the bank experienced difficulty in reselling the shares. A seventh church
member's shares were partially resold.
The bank issued cashiers checks to those members whose shares were
resold. These were negotiated in ways which made the funds difficult to trace.
For example, Duk Moon Aum, a long-time church member in Korea and the
architect for the Little Angels performing arts center in Seoul, had purchased
$50,000 of the stock with money provided by Pak. After talking with Pak and Kim,
Aum agreed to sell his stock. The next day he went to the DNB and received a
$50,000 cashiers check from the bank, which he promptly converted to cash (the
bank did not report this cash transaction to the Treasury, in violation of banking
laws and regulations.)
605
On the same day, a Korean businessman named Choi
Che Yung bought the shares Aum had sold to the bank. Choi used money he got
from Yang Doo Won, a high-ranking KCIA official in Seoul.
Choi denied consulting with Yang before buying the stock; Kim said he did not
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