The LH Scandal Becomes the Biggest Variable in April Elections... Shaking 'Real Estate Issues and Prosecutorial Reform'

Concerns Over Impact on Presidential Election Phase
Ruling Party Emphasizes Strengthening Anti-Corruption System
Burden Linked to Prosecution Reform
Some Advocate Resolution Through Prosecution

[Asia Economy reporters Naju Seok and Oh Ju-yeon] Allegations of land speculation involving the Korea Land and Housing Corporation (LH) have shaken public sentiment and emerged as the biggest variable in the 4.7 by-elections. Each political party preparing for the elections is focusing all efforts on responding to this issue. Since it is a ‘real estate problem’ considered the current administration’s greatest vulnerability, it is likely to influence not only the by-elections but also the presidential election phase, which is just a year away.

[Image source=Yonhap News]

For now, the ruling party, the Democratic Party of Korea, views this issue as an individual deviation within a specific public institution and is adopting a strategy focused on ‘strengthening the corruption prevention and supervision system.’ Kim Tae-nyeon, acting leader of the Democratic Party, stated at the Supreme Council meeting that day, "We will establish a strict and fundamental solution so that public officials cannot even think of speculation." The strategy involves legislative activities aimed at both punishment and prevention.

Originally, next month’s by-elections were expected to be a contest between the ruling party’s argument for government stability and the opposition’s call for regime judgment. The ruling party had been advancing plans to bolster the government stability argument through COVID-19 vaccine rollouts and the fourth round of disaster relief payments. Moreover, there was hope that controversies such as the National Intelligence Service’s political and civilian surveillance during the Lee Myung-bak administration and the construction of the Gadeokdo New Airport could shake public sentiment not only in Seoul but also in the Busan region. On the other hand, the opposition planned to point out the ruling party’s unilateral dominance and weaknesses in real estate policies and COVID-19 quarantine measures.

Ultimately, the LH land speculation controversy, which emerged as an unexpected variable, struck at the heart of the current administration, which had emphasized fairness, becoming a major setback for the ruling party. The anger of ordinary citizens, such as those struggling to buy homes amid soaring jeonse (long-term lease) prices, and the 2030 generation who, despite borrowing to the limit (Yeongkkeul), were frustrated by financial constraints, continued to grow. On the 10th, Democratic Party lawmaker Lee Sang-min appeared on the radio and said, "It is absolutely unacceptable to exploit public information related to real estate development for personal gain," adding, "(This incident) is undoubtedly a major setback for the ruling party responsible for the government."

This incident may also act as a factor shaking the core national agenda of the current administration, which includes reforming power institutions beyond just real estate. Seeming to be aware of this, former People Power Party lawmaker Yoo Seung-min stated on social media, "This incident is not a mere individual deviation but a result of a structure where public corruption is inevitable," and argued, "The solution is to leave it to market competition."

Regarding prosecution reform, since this issue arose immediately after the adjustment of investigative authority between the prosecution and police, there are signs that a frame blaming the current administration’s prosecution reform direction may form. Especially since former Prosecutor General Yoon Seok-youl resigned in protest over the investigative authority adjustment, the government and ruling party have no choice but to focus all efforts on preventing the issue from spreading.

Since allegations of land speculation in the public service sector may spread beyond public institutions to local governments and central ministries, the political sphere is on high alert about the issue’s prolongation and its impact on the presidential election phase.

Within the ruling party, recognizing the gravity of the situation, there are voices emphasizing early resolution through prosecution involvement. Democratic Party lawmaker Jeong Il-young, who has advocated for prosecution participation in the investigation, said in a phone interview, "Although the remaining time is short, I believe it would be less burdensome to conclude this before the by-elections rather than dragging it out afterward."

This content was produced with the assistance of AI translation services.