95th Congress, 2d Session: Committee Print INVESTIGATION OF KOREAN-AMERICAN RELATIONS
Report of the Subcommittee on International Organizations of the Committee on InternationalRelations U.S. House of Representatives
October 31, 1978
Printed for the use of the Committee on International Relations U.S. GOVERNMENT PRINTING OFFICE, WASHINGTON,1978: 34-674-O
For sale by the Superintendent of Documents,U.S. Government Printing Office, Washington,D.C. 20402 Stock Number 052-070-04729-1 Page 387
Conclusions and RecommendationsThe subcommittee findings regarding the Moon Organization may be summarizedas follows: (1) The UC and numerous other religious and secular organizations headedby Sun Myung Moon
constitute essentially one international organization. This organizationdepends heavily upon the
interchangeability of its components and upon its ability to move personneland financial assets freely
across international boundaries and between businesses and nonprofitorganizations. (2) The Moon Organization attempts to achieve goals outlined by SunMyung Moon, who has
substantial control over the economic, political, and spiritual activitiesundertaken by the organization
in pursuit of those goals. (3) Among the goals of the Moon Organization is the establishment ofa worldwide government in
which the separation of church and state would be abolished and whichwould be governed by
Moon and his followers. (4) In pursuit of this and other goals, the Moon Organization has attempted,with varying degrees of
success, to gain control over or establish business and other secularinstitutions in the United States
and elsewhere, and has engaged in political activities in the UnitedStates. Some of these activities
were undertaken to benefit the ROK Government or otherwise to influenceU.S. foreign policy. (5) While pursuing its own goals, the Moon Organization promoted theinterests of the ROK
Government, and at times did so in cooperation with, or at the directionof, ROK agencies and
officials. The Moon Organization maintained mutually beneficial tieswith a number of Korean
officials. (6) The Moon Organization established the KCFF ostensibly as a non-profitfoundation to promote
Korean-American relations, but used the KCFF to promote its own politicaland economic interests
and those of the ROK Government. (7) The Moon Organization extensively used the names of Senators, Congressmen,U.S. Presidents,
and other prominent Americans to raise funds and to create politicalinfluence for itself and the ROK
Government. (8) A Moon Organization business is an important defense contractorin Korea. It is involved in the
production of M-16 rifles, antiaircraft guns, and other weapons. (9) Moon Organization agents attempted to obtain permission from anAmerican corporation to
export M-16’s manufactured in Korea. The M-16’s are manufactured undera coproduction 34-674 O - 78
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agreement approved by the U.S. Government, which puts M-16 productionunder the exclusive
control of the Korean Government. Despite this, Moon Organization representativesappeared --
apparently on behalf of the Korean Government -- to negotiate an extensionof the agreement. (10) The Moon Organization attempted to obtain a controlling interestin the Diplomat National
Bank by disguising the source of funds used to purchase stock in thenames of UC members. (12) The Moon Organization used church and other tax-exempt componentsin support of its
political and economic activities. (13) Although many of the goals and activities of the Moon Organizationwere legitimate and lawful,
there was evidence that it had systematically violated U.S. tax, immigration,banking, currency, and
Foreign Agents Registration Act laws, as well as State and local lawsrelated to charity fund, and
that these violations were related to the organization’s overall goalsof gaining temporal power. Despite the Moon Organization’s cooperative relationship with the ROKGovernment the UC was
far less influential as a religious movement in Korea than elsewhere.A large proportion of the
hundreds of Koreans interviewed in the course of the investigationsaid that they had never heard of
Moon or the UC until the early or mid-1970’s, when their activitiesbecame widely publicized. In the
United States, the UC appears to have had little success in attractingfollowers from the Korean
community. Most Korean-Americans interviewed expressed varying degreesof embarrassment or
hostility toward Moon and the UC; few saw them as a positive factorin Korean-American relations. The subcommittee found that the Moon Organization has had a number ofinfluential allies in the
Korean Government, including Kim Jong Pil, Pak Chon Kyu, and others. Although investigations and publicity in the 1976-78 period appear tohave had an effect on the
degree of influence Moon’s supporters had with the Korean Government,there were continuing
indications that the Moon Organization retained significant support. Many of the activities of the Moon Organization would not raise questionsof impropriety if carried
out openly and without violations of laws. The subcommittee does notfault the many Americans,
Koreans, and others who identified themselves with Moon Organization-sponsoredactivities such as
the Little Angels, or who shared the Moon Organization’s expressedconcerns about communism
and South Korean security. However, the Moon Organization’s ulterior motives behind even its mostbenign activities tended to
negate its positive contributions. For example, the Little Angels,a highly accomplished children’s
dance group, undoubtedly improved the image of Koreans around the worldand in particular
contributed to the Americans’ understanding of Korean culture. TheKorean Government’s decision
to bar the Little Angels from traveling outside Korea was a loss forKorean-American relations. The
demise of the little Angels as a touring group followed growing publicawareness of its ties to Page 389 Moon, who -- after founding and quietly backing the group -- increasinglyused it to further his
political and economic goals. In his own speeches to followers, Moonmade it clear that the Little
Angels, the annual science conference, and other seemingly philanthropicprojects were in reality
geared toward his ambitious and carefully thought plans for winningcontrol and influence over
political and other secular institutions. Moon, like Tongsun Park, showed a keen understanding of the use of imageryin building political
influence. Just as Tongsun Park used his close relationship with afew Congressmen to attract others,
Moon used the names and pictures of prominent Americans, Japanese,Koreans, and others to
create an image of power and respectability for himself and his movement.The multifaceted Moon
Organization thereby obtained the help and cooperation of numerousAmericans who had no idea
they were contributing to Moon’s plan for world theocracy. Like Tongsun Park and others who conducted pro-ROK influence activitiesin the United States,
Moon and his organization acted from a mixture of motives and objectives.Service to Korea was
combined with a desire to advance personal and organizational goals.Like Tongsun Park and
others, Moon and his organization attempted to gain influence in Seoulthrough activities in the United
States; to this end, the Moon Organization exaggerated its successin the United States to create
influence in Korea and elsewhere. Thus, although the Moon Organizationoften acted for the ROK
Government -- even to the point of accepting money for its services-- control and influence over
Korean political institutions was no less a goal there than in theUnited States. In this respect, the
Moon Organization was not an agent of influence for the ROK Governmentso much as it was a
volatile factor in Korean-American relations, capable of distortingthe perceptions each country held
of the other. In the United States, for example, Moon has aroused widespread antipathy.To the extent that his
organization’s activities here are associated with Korea or the KoreanGovernment, there is potential
harm to Korean-American relations. Recent attempts by the ROK Governmentto dissociate itself
from Moon seemed to recognize this problem. However, these attemptsat dissociation came only in
the context of a public controversy over Moon, investigations intoKorean influence activities, and
strained relations between the two countries. The misuse of the names of prominent Americans by the KCFF was of concernto U.S. Government
agencies as early as 1966. Much of the executive branch’s early awarenessof Korean influence
activities in the United Sates -- including those of Tongsun Park --arose from State Department and
congressional inquiries into KCFF publicity and fundraising activities.However, these activities were
not then perceived to be linked to Moo. Later, when Moon’s activitiesgenerated publicity in the
United Sates, there were numerous requests to the executive branch,as well as to the Congress and
to State and local authorities, for information about Moon and forinvestigations of his organization’s
activities. The response to these inquiries was fragment. Numerousinvestigations were launched by
agencies such as the NEC, INS, and Depart- Page 390 ment of Justice which involved one or another component of the MoonOrganization. The
subcommittee’s investigation led it to conclude that these investigationswere justified and should
continue. However, the subcommittee believes that these investigationswill be inconclusive and
redundant unless they are coordinated with each other and treated asan investigation of essentially
one organization. The subcommittee concludes that the following objectivecould be met by
combining investigative activities related to the Moon Organizationinto an interagency task force: (1) Consideration could be given as to whether apparently unrelatedimmigration, FARA, currency,
banking, and other violations were in furtherance of a common schemeor plan. (2) All existing information bearing upon the same subjects could bebrought together and analyzed;
earlier investigations which failed to do this allowed improper influenceactivities to continue until they
caused a major public scandal affecting Korean-American relations. (3) Maximum resources could be employed toward tracing cash and obtainingevidence from
outside the United States. (4) Tax money could be saved by combining related investigations andeliminating duplication of
effort. Executive Branch Task Force (1) The Department of Justice, the SEC, the IRS, and other executivebranch agencies currently
investigation allegations relating to Sun Myung Moon, Pak Bo Hi, theUC, the KCFF, and other
individuals and organizations comprising the Moon Organization (asdescribed in this report) should
coordinate their efforts and form an interagency task force. (2) In addition to continuing present investigations, the task forceshould address itself to the
following issues: (a) Whether there have been systemic and plannedviolations of U.S. immigration laws
and regulations in connection with the importationof large numbers of foreign nationals
for purposes of fundraising, political activities,and employment in the Moon
Organization business enterprises. (b) Whether there have been systematic andplanned violations of U.S. currency and
foreign exchange laws in connection with themovement of millions of dollars of cash
and other financial assets into and out ofthe United States without complying with
appropriate reporting requirements. (c) Whether U.S. tax laws have been violatedthrough large cash transfers to individuals
which were characterized as loans. (d) Whether tax-exempt organizations such asthe Unification Church, Freedom
Leadership Foundation, Korean Cultural andFreedom Foundation, and International
Cultural Foundation, have engaged in political,business, and other activities inconsistent
with their tax-exempt status; and whetherthese organizations are so closely affiliated
with each other and with non-tax-exempt businessand organizations so as to render
them ineligible for tax-exempt status. (e) Whether there have been systemic violationsof the Foreign Agents Registration Act
by the Moon Organization. Page 391 (f) Whether there have been violations of currency,immigration, banking and tax laws
in connection with Moon Organization investmentsin the Diplomat National Bank and
other businesses in the United States. (g) Whether there have been instances of charityfraud, violations of currency and
immigration laws, and abuse of tax-exemptstatus in connection with the Moon
Organization’s control over the Korean Culturaland Freedom Foundation. (h) Whether there have been attempts to violate,or violations of, the Arms Export
Control Act in connection with the manufacture,sale, or attempted sale of M-16 rifles
or other armaments by agents of the Moon Organization. (3) The task force should use the resources of the following agencies:
Department of Justice (including the FBI, Anti-Trust Division, andINS);
Department of Treasure;
Securities and Exchange Commission;
Federal Reserve Board;
Internal Revenue Service; and
Department of State. (4) The Department of State should assist the task force in attemptingto obtain witnesses, financial
data, and other cooperation from foreign governments, particularlyJapan and South Korea. (5) The task force should seen information from appropriate State andlocal governments and should
make information available to State and local governments for use inappropriate proceedings
involving enforcement of their laws. The subcommittee also recommends that appropriate committees of theCongress review certain
information pertaining to the Moon Organization. Current U.S. tax lawsand regulations made it
impractical for the subcommittee to examine the tax returns of suchMoon Organization components
as the Unification Church International, which was denied tax-exemptstatus by the IRS. However,
there is reason to believe that taxable Moon Organization componentsderive tax advantages from
transfers to tax-exempt components. Since both taxable and tax-exemptorganizations are used
interchangeably in the Moon Organization, such tax advantages wouldenable the Moon
Organization to pyramid economic power and achieve a substantial advantageover competing
organizations. The subcommittee therefore suggests a review by theHouse Ways and Means
Committee and the Senate Finance Committee -- which have access totax returns -- to determine
whether transfers of funds within the Moon Organization raise issueswhich point to the need for
legislation to prevent the abuse of tax-exempt status. More specifically,the subcommittee
recommends that the House Ways and Means Committee and the Senate FinanceCommittee
review the applications for tax-exempt status (where applicable) andthe tax returns of Moon
Organization entities, including: Unification Church; Freedom LeadershipFoundation; Unification
Church International; International Cultural Foundation; Korean Culturaland Freedom Foundation;
Tong-Il Enterprises; One-Way Productions; International Oceanic Enterprises;and News World
Communications. Page 392 and determine whether: (a) Income from abroad is properly reported. (b) Deductions are taken by businesses forcharitable contributions to tax-exempt
organizations, the actual control of whichis in the hands of the same persons and
organizations in control of the businesses. (c) New legislation or regulations are neededto prevent tax avoidance and pyramiding
of economic power by means of recycling fundsthrough an international organization,
part of which is tax-exempt. The subcommittee has also referred its findings to the Armed Servicesand Intelligence Committees
of the House and Senate, and to the Munitions Control Board of theState Department, with the
suggestion that more precise information be obtained without the MoonOrganization’s role as a
Korean defense contractor. During the investigation, the subcommitteefound it very difficult to
obtain reliable information about the extent to which Moon industrieswere involved in weapons
production and sales. The Moon Organization has self-proclaimed goalsof controlling political and
secular institutions and a strident ideology which envisions the formationof a “Unification Crusade
Army.” Moon’s speeches forsee an apocalyptic confrontation involvingthe united States, Russia,
China, Japan, and North and South Korea, in which the Moon Organizationwould play a key role,
Under these circumstances, the subcommittee believes it is in the interestof the United States to
know what control Moon and his followers have over instruments of warand to what extent they are
in a position to influence Korean defense policies. Of particular concern is the Moon Organization’s involvement in theproduction and sale of M-16
rifles and other weapons provided to Korea under U.S. aid programsand subject to the Arms
Export Control Act. In late 1977, Moon Organization representativestried to renegotiate a
coproduction agreement between Colt Industries and the ROK Government.The circumstances
suggested they were secret envoys of the Korean Government which, underthe coproduction
agreement, has exclusive control over M-16 production. Although theROK Government said it
wanted to produce 300,000 extra M-16’s because of the need to equipits own forces, Moon
Organization tried to get Colt’s agreement to export guns to thirdcountries. The subcommittee therefore recommends: That the House International Relations Committee, the House Armed ServicesCommittee, and the
corresponding committee of the Senate ascertain whether businessesoperated by the Moon
Organization are engaging in the production or same of armaments suppliedto the ROK
Government through U.S. military aid programs, including coproductionagreements. Information
about the role played by Moon Organization industries in Korean defenseproduction should be
sought from the Appropriate U.S. defense and intelligence agencies.
The document Report of the Subcommittee on International Organizationsof the Committee
on International Relations is a publication of the United States Governmentand is thus part of the
Public Domain.
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