'Seongnam FC Allegations' Lee Jae-myung Supplementary Investigation Conclusion... Donation Usage Unclear (Comprehensive)

Investigation Results Submitted to Prosecution After 7 Months
Bribery Charges Applied Under Special Act
Doosan Construction Land Use Changed

Usage Investigated During May Raid
Partial Performance Bonus Payment Confirmed per Guidelines

[Image source=Yonhap News]

[Asia Economy reporters Seongpil Jo and Sehee Jang] The police investigating the 'Seongnam FC sponsorship fund allegations' handed over the results on the 13th to the prosecution, stating that charges against Lee Jae-myung, leader of the Democratic Party of Korea, are recognized. It has been seven months since the prosecution requested supplementary investigation in February. However, it is reported that the police ultimately failed to clear all suspicions regarding the use of the sponsorship funds, which had been the focus of their investigation.

According to a comprehensive report from our coverage, the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency announced that they handed over the investigation conclusion applying the Special Act on the Aggravated Punishment of Specific Crimes for third-party bribery charges against Lee. The police judged that Doosan Construction paid about 5 billion KRW in sponsorship funds to Seongnam FC as a bribe in exchange for changing the use of hospital land it owned in 2015 to business facilities and reducing the area to be donated from 15% to 10%. Earlier, Seongnam City approved the change of use for the hospital site promised through a business agreement in July 2015 during Lee’s tenure as mayor in November of the same year.

Doosan Construction provided a total of 5.3 billion KRW in sponsorship funds to Seongnam FC, starting with 2 billion KRW in 2016, followed by 2.2 billion KRW in 2017, and 1.1 billion KRW in 2018. Prior to this, Doosan Construction had only donated about 300 million KRW to Seongnam FC in 2015. After the approval of the change of use, the annual sponsorship amount increased by up to seven times. Doosan Construction built a new headquarters on the changed site, and from 2019, when Lee left for the position of Gyeonggi Province governor, no separate sponsorship funds were provided.

This investigation result contrasts with the decision by the Bundang Police Station in Gyeonggi Province last September to dismiss charges against Lee due to insufficient evidence. The Bundang Police Station concluded a no-charge decision after investigating for three years and three months since June 2018, following a report by the Bareunmirae Party during the 2018 local elections. Subsequently, the accusers filed an objection to the police investigation results, and the case was transferred to the prosecution. The prosecution requested supplementary investigation, and the police began reinvestigation in February this year.

[Image source=Yonhap News]

The supplementary investigation was initially handled by the Bundang Police Station. At that time, the Bundang Police Station received support from five investigators from the higher authority, the Gyeonggi Southern Provincial Police Agency, focusing on tracking the flow of funds and whether there was quid pro quo in the Seongnam FC sponsorship funds. During this process, it was confirmed that Doosan Construction sent an official letter to Seongnam City in October 2014 stating that they would sponsor Seongnam FC if the hospital site’s use was changed to allow building a new headquarters. In relation to this, the police conducted a surprise raid on Seongnam FC and Doosan Construction headquarters in May, and during the analysis of the secured materials, it is reported that documents proving Lee’s charges were found. Around this time, the case was transferred to the Gyeonggi Southern Provincial Police Agency, which concluded the investigation on this day.

However, the police reportedly failed to clarify the use of the sponsorship funds. The police had been focusing their investigation on the unclear use of sponsorship funds received by Seongnam FC from companies such as Doosan Construction. The investigation stemmed from suspicions that some of the sponsorship funds were laundered and used as election funds for Lee. If the investigation revealed that Lee or his associates withdrew funds, charges of embezzlement could have been applied. These suspicions were also stated in the accusers’ objection letters.

In fact, the police examined the use of funds through materials secured during the May raid and confirmed that part of the sponsorship funds was paid as performance bonuses. However, it is reported that the police judged this was not problematic because the performance bonuses were paid according to Seongnam FC’s policy allowing up to 20% performance bonuses to employees and public officials who contributed to attracting sponsorship funds. Previously, Seongnam FC had refused to disclose to the Seongnam City Council and others who received the performance bonuses and how much was paid.

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