A director of the Diplomat National Bank resigned Friday night after failing in an effort to oust board chairman and chief executive officer Charles C. Kim.
The director, lawyer Anthony G. Chase, issued a statement yesterday saying he had notified acting Comptroller of the Currency Robert Bloom of his resignation from the board of the Asian-oriented bank and of "the surrounding circumstances."
The circumstances - sharply disputed by Chase and bank counsel Alan S. Novins in extensive separate interviews - center on the source of $20,000 in cash that was part of the $100,000 that Kim invested in the initial stock of Diplomat National. He was the organizer of the bank, which opened in December, 1975.
Chase, in his statement, said that he pledged to Bloom "my full and continuing cooperation in any federal investigation into the affairs of the bank." Bloom was at his home in Falls Church yesterday, but did not return a reporter's phone call.
Chase, a former official of the comptroller's office and of the Small Business Administration, joined the board last November, succeeding columnist Jack Anderson.
Since then, "I became increasingly concerned about several aspects of the conduct of Dr. Kim, including the source of funds used to acquire capital stock in the bank and certain other, and possible related aspects of the bank's management," Chase said in the statement.
"When it became impossible to receive satisfactory, consistent and timely responses to inquiries about these matters. I reached a conclusion that my obligation as a director of the bank required me to suggest the removal of Dr. Kim," the statement said. "I continue to believe that the bank can serve an important function in the Washington financial community."
Kim could not be reached. His attorney, Seymoure Glanzer, told a reporter he would be unavailable to discuss any aspects of the matter until today.
Possible South Korean involvements lie at the heart of the cirumstances disputed by Chase Novins, who confirmed that the Securities and Exchange Commission is making an investigation of an undisclosed nature.
For example, a reporter was told, the Unification Church of Korean evangelist Sun Myung Moon has accounted for up to one-third of Diplomat National's approximately $6 million in non-interest-paying demand deposits.
Novins declined to discuss this on the grounds that it "not appropriate" for him - as the bank's counsel - to comment on its relationships with any customer. He added that federal agencies have full, documented information on such matters.
Novins gave this account of the $100,000 stock subscription, based on inquiries of Kim and relevant documents.
Kin derived more than $70,000 from the sale of a suburban Virginia car-wash three years ago. He put most of the proceeds in a savings account, but kept a substantial amount in cash. To buy the stock, he wrote a check for $45,000, which was drawn from the account; put up $20,000 of his cash, and made up the $35,000 balance with a loan from the Union Trust Co.
Chase's much different version is this: he had become curious about how Kim could have raised the money, but could not get a satisfactory explanation. Finally, at a board meeting on Feb. 25, Kim asked that the machine used to record the proceeding be turned off and requested confidentiality. No one took notes.
According to Chase, Kim then disclosed that during a trip to the Far East, his wife's brothers had given him at least $20,000 in currency that he had put into a briefcase, brought into the United States, and finally used to buy part of the stick. Kim refused to answer questions about the transaction, Chase said.
The brother-in-law was Yound Sam Kim, who was the leader of South Korea's major opposition political party for three years. His term ended last May.
Novins, who provided the brother-in-law's name, said that Kim had told him he had brought a sum exceeding $5,000 into the United States, but the attorney declined to identify the source, Novins, who agreed that the tap recorder had been turned off at Kim's request, said, "I don't believe that Kim said the [the brother-in-law] gave him the money." In any event, he emphasized, this money did not figure in the stock purchase.
A federal law requires that a person bringing more than $5,000 in currency into the country must file a report with the Treasury Department. Kim did not make such a report, saying he had been unaware of the law.
Novins told the board he had advised Kim of his belief that he should make a report. He said in the interview that he had done this not because the money had been invested in the bank - it hadn't, he emphasized - but because of a potential for embarrassment.
Kim, Novins explained, was the chairman of a bank that had been the subject of news reports alleging that the substantial portion of its initial stock was controlled by South Korean businessman Tongsun Park and associates of Moon.
According to Novins, once he had brought the matter out before the bank's directors, it was up to Kim and his personal lawyer, Glanzer, to decide what to do.
Also according to Novins, Chase agreed with this analysis and said that he himself, also with innocent intent, had brought currency in amounts exceeding $5,000 into the country.
Chase vehemently denied that he ever had, or could have, carried such sums into the country. And, he said, Novins had agreed that Novins would file the report with the Treasury Department about the money Kim had brought in. When Novins did not file the report, Chase said, Chase sent Novins a letter offering to file the report.
The controversies boiled over at board meetings last Thursday and Friday, when Chase, an unpaid director sought to have Kim replaced as chairman by Dr. William Chin-Lee, an internist who once ran as the Republican candidate for District of Columbia delegate to Congress. The physician, who could not be reached yesterday, was to designate Chase as head of the executive committee, a post once held by columnist Anderson.