Charity, D.C. Style

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You might have thought KimSeung-Youn had everything a business titan could want. He sat atop his family's multibillion-dollar Hanwha Group, one of South Korea's largest conglomerates, running an empire of chemical, finance and energy firms and a chain of resorts. He had his own baseball team, the Hanwha Eagles, and loved to sip soju, a fiery libation, as he and his employees watched them play. But apparently one thing was missing: international prestige. So Kim turned to Republican heavyweight Tom DeLay's former chief of staff, Ed Buckham, in early 2001 to develop what Buckham's lobbying firm described as a "work plan." The goal, according to the first sentence of that five-page proposal, was nothing short of establishing "Chairman Kim as the leading Korean business statesman in U.S.-Korean relations."

To achieve something that ambitious would require three commodities prized in Washington: visibility, access and lots of money. In this case, those ingredients came together in June 2001 in the form of a tax-exempt charity—the Korea-U.S. Exchange Council (KORUSEC), which Buckham's firm formed and Kim funded. But if KORUSEC's goal was to make important people start paying attention to Kim, it may have worked too well. KORUSEC is one of a number of nonprofit organizations that have been caught in the controversy that now surrounds DeLay, who's facing questions about his fund raising and ties to lobbyists. The majority leader and seven other House members accepted lavish trips to South Korea from KORUSEC that may have been improper under House rules because the organization had registered as a "foreign agent." The lawmakers say they were not aware that the group was considered a foreign agent, and the group says it may have registered by mistake and is checking to see if it should be removed from the Justice Department list.

KORUSEC finds itself in the spotlight just as tax-exempt groups are coming under new scrutiny. The Senate Finance Committee last week opened a probe into the charities set up by lobbyist Jack Abramoff, who is already under investigation on separate matters by another committee and the Justice Department. One issue is whether Abramoff improperly used nonprofits to pay for overseas trips to places other than South Korea for DeLay and House Administration Committee chairman Robert Ney.

For some tax-exempt organizations, the question is whether their charitable works are an end in themselves—or a means to one.

KORUSEC's stated goals included working for peace on the Korean peninsula and building stronger ties between U.S. and Korean leaders.

But KORUSEC strengthened Kim's own ties in Washington as well. As chairman of KORUSEC, Kim—virtually its only donor—was host to a procession of congressional delegations through Korea, sat in the House gallery as DeLay's guest of honor at President Bush's 2003 State of the Union address and later that year met with Vice President Dick Cheney in Washington.

KORUSEC has been a financial boon for Buckham's firm. Although the law strictly limits how much a charity may spend on lobbying, KORUSEC's filings with the Internal Revenue Service indicate it pays Buckham's Alexander Strategy Group $5,000 a month in rent for a Georgetown office where repeated calls by TIME were answered only by a machine featuring the voice of a long-departed executive director.

In addition, one of Kim's subsidiaries—Universal Bearings Inc., a manufacturer in Indiana—has paid Buckham's firm $600,000 since 2001 for what its federal filing describes as lobbying "on the strong political, economic and security relationship between the Republic of Korea and the United States."

Republican lobbyists were not the only ones to get KORUSEC's business. Buckham brought in as a "strategic partner" a Democratic firm called the Harbour Group, which charged KORUSEC $150,456 in 2002 and 2003. Lobbyist Joel Johnson—a former Clinton White House official who has since moved from Harbour to the Glover Park Group and taken the KORUSEC account with him—says he was hired "to recruit Democrats to go on trips." He insists, however, that the excursions were serious endeavors with briefings by Korean officials and a trip to the demilitarized zone. As for elevating Kim's image with the delegations, Johnson insists, "It was never the purpose ever stated to me." In the meantime, defining exactly what charity is, and how it should be bestowed, has become Washington's latest investigative mission.