Korea is apparently miffed that Johns Hopkins rejected its demand to sack the head of the institute, and a trail of e-mails leads straight to Cheong Wa Dae.

That could also mean trouble for the website 38 North, which is run by the institute and often provides invaluable intelligence on North Korea's nuclear program.

The state-run Korea Institute for International Economic Policy has decided to halt support for the U.S.-Korea Institute at Johns Hopkins University amid suspicions of meddling by Cheong Wa Dae.

According to an internal memo, KIEP held a board meeting on March 29 and decided to halt funding for the U.S. institute and informed its chairman, Robert Gallucci, the chief U.S. negotiator during the 1994 North Korean nuclear crisis, that funding would end in May.

On Oct. 30 last year, KIEP senior vice president Kim Joon-dong sent an e-mail to staff in the U.S. saying, "We plan to brief trade secretary Lee Tae-ho and Hong Il-pyo, a senior administrative officer at the BH [an apparent abbreviation for the Blue House or Cheong Wa Dae] regarding USKI and KIEP on Nov. 2."



He added Hong "views current situation as extremely serious and requested objective evaluation and bold measures."

KIEP has been funding the institute to the tune of some W2 billion a year since 2006 (US$1=W1,070). But after an inspection of KIEP by the National Research Council for Economics, Humanities and Social Sciences in September last year, it was told to "boost the transparency of budget allocation and selection of visiting scholars" and replace USKI's head.

Asked if USKI was pressured by the South Korean government to replace its right-leaning chief, Ku Jae-hee, Gallucci said, "Of course" and added that the demand constituted "inappropriate intervention" in the freedom of scholarly pursuit.

One source in Washington said, "There are rumors that the incumbent administration will halt funding for USKI and create a new think tank on Korean studies. A Korean-American professor who supports the ruling party is being mentioned as the candidate to head it."

Cheong Wa Dae, however, said the National Assembly is behind moves to rectify problems in how USKI is run and denied any involvement.

A Cheong Wa Dae official said, "USKI is deemed as lacking transparency in its financial records and spending" and a report prepared by USKI was "unsatisfactory."