Jamsil Island was very, very wide. When the decision was made to carry out public water reclamation works to connect the island to land to its south, it would have made sense to have the Seoul Metropolitan government carry out works instead of tendering the job to private firms. Seoul Metropolitan submitted its application for a permit to carry out public water reclamation works on Jamsil Island to the Ministry of Construction on January 1, 1969. The Ministry of Construction rejected this application under the following pretext: "There is a concern that should the width of the river be narrowed, such a change to the surface water profile may weaken its resistance to floods. A further review will be undertaken following a report on the results of a hydraulic water experiment on the lower Han River basin in the Seoul Region."
Seoul Metropolitan submitted several more permit applications. They received no response to any of them. Then on August 26th, a reply to their permit application submitted on July 23, 1970, finally arrived. "As concerns the works at hand, a private contractor would be preferred to having Seoul Metropolitan directly carry out works." No reason was provided to the question of 'why exactly a private contractor was preferred' in the first place. However, behind the Construction Ministry's response lay a contentious back and forth regarding the collection of so-called political funds.
During Park Chung Hee's time - which is to say throughout the 3rd and 4th republics - political funds were regularly solicited. Korea's economic scale was much smaller then than it is today. I also happen to know first hand that significant excesses were committed during the political fund collections - all of which had their own long term repercussions. There was a striking feature in the way Park Chung Hee pooled political funds: he never once received anything from any business directly.
There were several channels, though. The first was to have the Deputy Prime Minister cum Economic Planning Board Minister collect the funds. The Chaebol and large corporations we see in Korea today were basically all formed during the 3rd and 4th Republics. Capital infusion and special interest rates, along with favorable tax schemes, were the three means by which the Chaebol developed under. All of these measures were under the direct control of the Deputy Prime Minister cum Economic Planning Minister. To give an example of customary practice, when large sums of capital were provided, a percentage of the funds would then be set aside to be sent up as political funds.
The second channel was to have the Chairman of the then ruling Republican Party's Finance Committee gather the funds. I'm not sure how things operate today, but during the 3rd and 4th Republics, nearly all of the large construction works let to market by the Central Government, government-owned enterprises, and the Seoul Metropolitan Government were awarded either through privately negotiated contracts or nominated competitive tenders. To say that there was no such thing as a normal competitive tender isn't an exaggeration. These nominations were at the sole discretion of the Republican Party's Finance Committee Chairman. So in practice, when a new project was ready to come to market, a percentage of political funds would be sent up. Then the size and scale of the works awarded to the various contractors would be distributed based on the amount of funds provided. The Finance Committee Chairman would take a portion of the political funds received and send them up to the Blue House with remaining funds used to cover Party operating expenses. Over the years, Kim Youngtae, Kim Seong-goen, Kim Jin-min and other notable figures would serve as the Finance Committee Chairman, occupying a more important role than either the Leader of the Floor or Secretary General. Kim Youngtae was a private citizen who was a central figure in the May 16 Coup d'tat, Kim Seong-nam was the founder of Ssangyong Group, and Kim Jin-min was the founder of Dongbu Group. Hence, it's no surprise that they were the Chief Financial Operators of their party and held outsized influence.
Annual 'Rice Cake Bonuses' (떡값) at Chuseok or the end of the year were the third channel. These 'bonuses' were facilitated by the Chief Presidential Secretary or Chief of Security.
Outside of these channels there were times when the Head of the Korean Central Intelligence Agency or Seoul Mayor would collect and send up funds. Of course, there was obvious competition behind the collecting and passing up of political funds in an effort to be seen as more loyal to the president. Demarcated lines were drawn between those in the ruling elite and those who they typically used their influence on to collect the political funds. The Economic Planning Minister would typically recieve funds from corporations, and the Republican Party Finance Committee Chairman would bring in funds from contractors. Large corporations at that time would typically have a full-time position manned by an individual responsible for sending up these political funds, which held a rank equivalent to that of the CEO. This person was the VP of Liquor (술 상무).
Then one day, in the second half of 1969, the Deputy Prime Minister cum Economic Planning Minister Kim Hak-legal contacted the managing directors (chairman or CEO level) of five major contractors. The managing directors of Hyundai Construction, Daelim Industries, Geukdong Construction, Sambu Civil Works, and Donga Construction. They were told to come to the office of the Economic Planning Minsters the next day at a certain time. Kim Hak-leol requested a rather large political contribution from each of the five individuals (Hyundai's Chung Joo-Young; Lee Jae-June from Daelim; Kim Yong-San of Geukdong; Cho Jung-Gu of Sambu, and Donga's Choi June-Moon).
On September 14, 1969 in the 3rd annex of the National Assembly, the constitutional revision allowing a third consecutive term for Park Chung Hee was passed, with the approving public referendum taking place shortly thereafter on October 17. In accordance with the constitutional revision, both the presidential as well as National Assembly elections were held on April 5, 1971. During this period between 1969 and 1971, there must have been quite a need for political funds, since that would explain the Deputy Prime Minister Kim's unusual request for politcal funds to this group of contractors who were outside of his normal corporate targets.
The contractors were all opposed to the Deputy Prime Ministers request. "We are already sending up political funds to the Republican Party Finance Committee Chairman every time we are awarded new projects. It just isn't reasonable for the Economic Planning Minister to now request that we send up political funds to him too." Hearing their objection, the Deputy Prime Minister proposed that in exchange for their politcal funds, they would receive the rights to the Jamsil public water reclamation works project. If they were to block the waterway to the south side of Jamsil island, connect it with the land adjacent to it, and build up a dike along its northern border, a massive section of reclaimed land would be formed. They would then have the right to that enormous amount of virgin land. The five manging directors all immediately accepted the proposal and promised to send up the political funds that the Deputy Prime Ministers had requested.
~ An original translation
from Volume III of Son Jung-mok's
'The Story of Seoul's City Planning'
Son Jung-mok: Former Director of Seoul City Planning Bureau, Internal Affairs Ministry, and Deputy Director of the National Assembly Budget Office for Planning and Management
