Police said Wednesday they launched an investigation into allegations that some officials in the Korea Freedom Federation, the nation’s largest anti-communist civic organization, misappropriated government subsidies and donations for personal use and other purposes.

A report said Wednesday that around 470 million won ($434,000) of 1.4 billion won pro­vided by the government was not spent as intended in 2011.

For example, 57 million won of a 100 million won budget for a KFF project was used instead for scholarships and promotional videos.

The screening procedure for the recipients of the scholarships was not properly managed and many were said to be children of the group’s workers, according to a whistle-blower from the organization.

The yearly budget for the headquarters is around 10 billion won and more than 10 percent of the budget comes from government coffers.

In 2010, 720 million won donated by the Federation of Korean Industries was not recorded in the KFF’s account books and instead was distributed to personal bank accounts of some executive members or ineligible people, according to the insider.

Police have reportedly secured enough evidence to prove the allegations after tracking down the bank accounts and attaining statements from insiders.

The KFF rejected the allegations, saying the “police have been tipped off with some misleading information about money that had been mistakenly transferred to bank accounts of assistants, but soon sent back to the organization’s bank account.”

The KFF, established in 1954, currently has 1.5 million members.

By Kim Young-won (wone0102@heraldcorp.com)