Two Sides of the Coin
On Monday, November 27, 1961, Lee Ki-jo arrived for work at Cheongsan headquarters and took Sung Dae-ik's report.
While he had been in the United States, the company had run without a hitch. The businesses he had built kept growing sturdily even through the recession that had set in after 1959. However deep the slump, people still bought what they needed. What struck him most was how steadily the bicycles of Kia Industries—the firm he had acquired—continued to sell. A new line made of chromoly steel was winning praise in the market and flying off the shelves.
But when Dae-ik finished the report and turned to the rumors drifting through Myeongdong, Ki-jo's mood soured. It felt as if the dark side of the military government was slowly beginning to show itself.
"They say the government will soon announce measures to revive the stock market."
Dae-ik went on.
"Madam Baek said the same. A man named Yun Eung-sang has been moving in ways that don't sit right."
"Yun Eung-sang?"
"Yes, sir. He used to sell electricity up in Sokcho, in Gangwon Province—bought a generator off the U.S. Army and peddled the power. He wound the business up, came to Myeongdong in 1955, and founded Hanil Securities."
Dae-ik had come in with remarkably precise information. Yun Eung-sang was the man who, together with Kim Jong-pil, would touch off the securities scandal and do grave damage to Korea's stock market.
"They say he's a master at manipulation. Made a fortune, lost it, made it again. Madam Baek said his trading methods were far too bold. Reckless, even."
Ki-jo nodded. He was not at ease.
If Chairman Park moved the general election forward, as Kennedy had demanded, the man with fire under his feet would be Kim Jong-pil. To prepare for the vote he would try to raise funds for founding the Democratic Republican Party even faster than before. In the history Ki-jo remembered, he had used Yun Eung-sang to run a market operation, driving speculative shares up and then crashing them, scraping together a huge sum and carrying it off as seed money for the party. This time, too, there seemed no way around the scandal.
In the afternoon Lee Man-ik of Cheongsan Construction came to see him. He had just returned from touring the Mapo apartment complex, a project the revolutionary government had broken ground on with great ambition on October 16, 1961.
"Have you adjusted to the time difference, sir?"
Ki-jo said that he had, and listened.
"The apartments the Korea Housing Corporation is putting up in Dohwa-dong are quite advanced. A fellow named Jang Dong-un is building them—he commanded an engineer battalion under Second Army headquarters. Cheongsan Construction would do well to study the work."
For the time, it was a colossal complex: thirteen six-story buildings, more than fifteen hundred units.
"Three sizes—nine, twelve, and fifteen pyeong, roughly 320, 430, and 530 square feet—and every one of them a rental."
The design was advanced in its own right. Central heating, elevators, flush toilets that were still a luxury, and, in the fifteen-pyeong units, a bathroom inside the apartment itself. They were building something this refined and yet, in a fine stroke of thinking, selling not a single unit, leasing them all on twenty-year terms. It was one of the projects pushed forward in the early days of the revolutionary government by soldiers who still had clean intentions.
"They meant to go to ten stories at first, but the USOM people rejected it and they cut the buildings down to six. Asked what business a country with an income of eighty dollars a head had with elevators. It's being built with counterpart funds, so the Americans stick their noses in something fierce."
A former chief of engineers, Man-ik had come back—true to his military habits—with a detailed grasp of how things stood inside the revolutionary government. When he finished with the Mapo apartments, a faintly worried look crossed his face.
"Chairman, there's something I've heard. It has a bit of a bad smell to it."
"What is it?"
"They're building a hotel for the U.S. military out in Gwangjang-ri—Gwangjang-dong—and they're demanding that the engineer chiefs of each service detach supplies, equipment, and troops."
"Hm. A recreation facility for the Americans?"
"Yes, sir. They're calling it Walker Hill, after General Walker, who was killed in the Korean War. They're putting in pachinko machines as well, so the GIs will spend here the money they would otherwise spend in Japan."
The news Man-ik brought was the overture to the Walker Hill affair Kim Jong-pil would set in motion. That, too, was a scheme to raise funds for founding the party. In the name of building Walker Hill, Kim Jong-pil would take government money and siphon it away. Raised by the labor of prisoners and soldiers, the place would cost almost nothing in wages, and materials brought from Japan would come in duty-free, so the construction cost could be cut to a quarter—yet the books would show every won as spent.
Ki-jo saw this, too, as something that could not be avoided. It was the two sides of a coin. In exchange for meeting the demand for an early election and a faster road to democracy, Kim Jong-pil's corruption would not vanish. If anything, it would grow worse.
The one small mercy was that he was not lining his own pockets. In the early days of the revolution, Kim Jong-pil had been the very image of a son of the revolution. Heedless of fire or flood, he had thrown himself into founding the party for the success of Chairman Park, the man he himself had raised up. Those who remembered him from those years judged that he had truly worked like a man trying to save the country for the revolution's sake. Ki-jo allowed that there was that side to it. He also thought Kim Jong-pil might have been looking past Chairman Park, toward the presidency that would come after.
When Man-ik had gone, Ki-jo sat alone in the chairman's office and lit a cigarette.
Set beside the great wave that would strike the following year, the securities scandal and the Walker Hill affair were mere ripples. What truly worried him was the currency reform of 1962. It would be the greatest blunder of a military government still clumsy in economic matters.
The reform had begun with a man named Yu Won-sik—the same man who had sat across from Ki-jo eating noodles the day Kim Jong-pil moved into the house next door. Yu had come to Chairman Park with an unverified claim, that the overseas Chinese held a third of the Republic's hidden funds, some hundred billion won in all, and urged a reform of the currency. Soldiers who knew little of economics, and who were convinced the rich had money locked away somewhere, agreed to a plan that would bring that money into the open and tie it up in the banks. They had expected a novel idea to yield some good. The result was an utter failure. They had, in effect, detonated a bomb that came within a hair of wiping out the country's small and medium enterprises.
The vast hidden funds of the overseas Chinese, which Yu Won-sik had offered as the reason a reform was necessary, did not exist. Or rather, they existed, but in amounts so paltry that even Chairman Park was taken aback.
Ki-jo dreaded the economic calamity that the chairman and his soldiers, still unseasoned in such matters, were about to set off. Park and his staff were short on experience in more ways than one. If the political timetable were advanced in a situation like this, their hunger for results could drive the work forward in a slapdash rush. Chairman Park's impatience was already formidable. He was a man who knew, of himself, that he was a leader short on legitimacy, and who meant to fill what he lacked with economic achievement. Ki-jo hoped that, as on the visit to America, some small shift might set him on the right road.
After the American visit, a great many things changed, and quickly.
On November 30, at Ki-jo's request, Lee Hu-rak was granted a special pardon. The very next day, December 1, USOM announced that it would form an international steel loan consortium, KISA. The moment the promise made to Farley—that Lee Hu-rak would be freed—was kept, USOM moved at once to push the consortium forward.
Ki-jo was startled that this new history, already diverging from the one he remembered, was unfolding faster than he had expected. The change he had set in motion in America was producing other results, like falling dominoes. The treatment he received changed as well. USOM issued him an official pass, and Director Killen, the USOM chief he had met during the American visit, went so far as to summon him for a private meeting. The head of USOM held a rank above that of a Korean cabinet minister. Killen told him that KISA would operate only through the end of 1962, just as Ki-jo had wanted, and added that two American firms, U.S. Steel and Koppers, were sounding out a place in the consortium.
When the meeting ended, Ki-jo went to see Frank. As he stepped into the office, Frank broke into a wide grin.
"So. What exactly did you get up to in America before you came back?"
"Well. All I did was interpret for Chairman Park. And only for two days, on a temporary basis."
Frank kept wanting to laugh at that. Those two days had thrown the CIA's Korea station into an uproar. A senior officer had flown in from Japan to learn what sort of man Lee Ki-jo was, how much influence he held over the revolutionary government, and what business he was running in Korea now. Frank had spent an entire day dictating, from beginning to end, how he had come to know him and everything they had done together since. Fortunately, Ki-jo had done nothing against American interests, and the matter passed without trouble. If anything, the assessment of him had gone up a grade.
We had better raise this man, Lee Ki-jo, another grade. Promote him from key collaborator to a civilian channel into the military government, and treat him accordingly.
The officer left that instruction with Frank and flew back to Japan. Unable to tell Ki-jo the thing as it had happened, Frank asked something else.
"Has Mr. Hausman asked to see you?"
"As it happens, he told me to come in to Yongsan."
"Well. You've become quite the sought-after man. Congratulations."
Frank figured Hausman had been interviewed by the CIA officer as well.
"They didn't happen to mention giving you an office in the Supreme Council building, did they?"
"Not at all."
"I only asked because the military government has been sweeping young talents like you into the Economic Planning Board."
Frank tossed off the idle joke and laughed.
"Would they really call in a man without even a diploma?"
Ki-jo talked with him a while longer, then left USOM and headed for Yongsan to meet Hausman.
Hausman's office sat directly beside that of the commander of the Eighth United States Army. Its location declared his standing. Eighth Army commanders were rotated often, but Hausman had held his post for years, and the office would not move until the day he left Korea.
When Ki-jo entered, Hausman put the same question to him.
"You, my friend. What kind of mischief did you get up to in America?"
Ki-jo had to give the same answer again.
"The interpreter fell ill, so..."
Hausman, in high spirits, offered a joke.
"Came back from America quite the big man, didn't you. Next time we play golf, bring Chairman Park along."
In those days the Americans did their socializing on the golf course and at the poker table, while Korean officers did theirs at kisaeng houses. Hausman wanted to draw Chairman Park into a golf circle. Ki-jo knew Park would begin learning the game the following year. He would take it up at the urging of those around him, but he would keep the lessons a strict secret. Under the revolutionary government, golf was treated as a social vice. For the time being, there would be no golf between Chairman Park and the Americans.
Faced with Hausman's unreasonable request, Ki-jo named someone else.
"What about including Director Lee Hu-rak?"
"Ah, right. You said he was out. Was he picked as spokesman for the Supreme Council?"
"That's right."
"Well, he's too useful a man to throw away. Let's the three of us get together for a round first."
Ki-jo wanted to meet Lee Hu-rak and talk about Shin Kyuk-ho. Moving the man who hoped to build a steel mill and a refinery in Korea with money earned in Japan was the best path open to him now. And Lee Hu-rak might be the one to lay the bridge that would let him reach Shin.