Wife’s extra-legal deal tests Ahn’s image
By Lee Tae-hoon
Ahn Cheol-soo, the independent presidential candidate, expressed his regret Thursday over his wife’s tax evasion in a real estate transaction in 2001.
“Though there can be many reasons, it was a wrong thing to do. I apologize to the people,” he said in his campaign office in Gongpyeong-dong, downtown Seoul, after announcing that Korea University professor Jang Ha-sung had joined his camp.
“I will live under stricter standards and criteria,” Ahn said.
During the news briefing, Ahn spent the majority of his time introducing Jang and the high-profile scholar’s decision to join his camp as an advisor on economic policies.
In contrast, he declined to answer journalists’ questions after issuing a brief apology.
The software mogul-turned-professor was prompt to offer an apology, but showed little sincerity when acknowledging the ethical breach by his wife Kim Mi-kyung, who works as a Seoul National University professor.
A day earlier, Kim admitted to underreporting the actual purchase price of her apartment to a district tax office in November 2011 in response to its disclosure by the media.
Kim said she falsely reported that she purchased an apartment in Munjeong-dong, Seoul for 250 million won ($223,470).
The market price for the apartment was around 480 million won, according to an official of the Real Estate 114, a real estate consultation firm.
Tax experts say she would have paid 11 million won less in the acquisition and registration taxes, which were set at between 0.02 and 0.03 percent of the asset price.
If she had filed the price at 470 million won to the district office, she should have paid 23.5 million in local taxes, 12.5 million won more than the 11 million won she paid.
The so-called “down contract” was pervasive in the country then as there was no legal penalty against those lowering the price of assets to evade taxes.
A law revision was made in 2004 to prevent the widespread tax evasion practice. Nevertheless, the latest revelation of his wife’s tax dodging will likely tarnish the 50-year-old Ahn’s reputation of being clean and upright.
“It will deal a blow to Ahn’s bid though these kinds of tax evasion cases were prevalent back then,” said Shin Yul, a political science professor at Myongji University in Seoul.
Yoon Hee-woong, the chief researcher of Korea Society Opinion Institute, forecast a sharp drop in Ahn’s popularity if more irregularities are discovered in the future.
Under the law, tax dodgers can face a maximum prison term of three years or a fine of up to three times the amount of tax evaded, but “down contractors” were not subject to it.
Ahn said tax dodgers should receive a severe punishment so that no one dares to evade taxes in an interview for the best-selling book, “Thoughts of Ahn Cheol-soo,” released in July.
“The cleaner one’s image is, the more vulnerable they are when these incidents occur,” said Shin.
Earlier in the day, Rep. Shim Jae-chul of the ruling Saenuri Party questioned Ahn’s qualifications as the next president, claiming that the founder of the software firm AhnLab embodies the wrong set of values toward fulfilling the “sacred civic duty of military service.”
The four-term lawmaker asserted that Ahn described his 39 months of military duty as a “big vacuum in his life,” and an “enormously torturous moment” in one of his books published in 1995.
“How can the commander-in-chief of the nation’s forces who views military service as a vacuum and torture, demand sacrifices from soldiers if a war were to break out?” he said.
Shim argued that Ahn’s description of military service was an insult to the country’s servicemen.
A spokesman for Rep. Moon Jae-in, the presidential contender of the main opposition Democratic United Party, only commented obliquely on the tax evasion issue.
“We are perplexed to hear that an unexpected problem has occurred in such a strong presidential contender,” said Rep. Jin Sung-joon.
Novice politician Ahn is also being accused of purchasing an apartment in a redevelopment area in Sadang-dong, southern Seoul, in 1988 before the apartments were reconstructed.
Residents who did not want to move out clashed with developers over the redevelopment plan.
Critics also suspect Ahn was engaged in a real estate speculation buying a one-third stake in another redevelopment area in Yeoksam-dong, southern Seoul.