Lee Jae-myung, Ahead of Daejang-dong Summons, Abruptly Releases 'Seongnam FC Statement'... What Does It Contain?

Lee Jae-myung, leader of the Democratic Party of Korea, posted a statement regarding 'Seongnam FC' on his Facebook on the 17th./Image source=Lee Jae-myung's Facebook

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] On the 17th, Lee Jae-myung, leader of the Democratic Party of Korea, made a sudden public disclosure of the statement he submitted to the prosecution regarding the allegations of 'Seongnam FC sponsorship funds.'

It is highly unusual for a suspect under investigation to disclose their own statement. Amid the prosecution's notification for Lee to appear in connection with the Daejang-dong case and their consideration of requesting an arrest warrant by linking the Seongnam FC case with the Daejang-dong case, Lee appears to have actively engaged in a public relations campaign by systematically refuting the prosecution's logic on the third-party bribery charge.

At around 8 p.m. on the same day, Lee posted on his Facebook a six-page A4 statement titled 'I am disclosing the Seongnam FC statement submitted to the prosecution.'

Previously, when Lee was summoned and investigated at the Suwon District Prosecutors' Office Seongnam Branch on the 10th, he reportedly submitted this pre-prepared statement to the prosecutor and used it to answer most of the questions.

In the statement, Lee divided his rebuttal of the prosecution's third-party bribery charge into seven points: '▲Seongnam FC is an independent corporation established and operated with the Seongnam city budget ▲the funds are advertising fees, not sponsorship money ▲Seongnam city administration is lawful and legitimate ▲Seongnam city administration and Seongnam FC advertising are unrelated ▲it is legitimate and necessary for local government heads to encourage local affiliated companies to advertise and sponsor citizen-funded clubs ▲advertising fees are used for public interest, not private gain ▲the penalties for bribery and third-party bribery are the same.'

First, Lee emphasized that since Seongnam FC is an independent corporation separate from Seongnam city, he, as the mayor of Seongnam at the time, was only nominally the club owner, and that the club's operating profits belong to Seongnam city.

He stated, "Seongnam FC is a citizen club established by Seongnam city and operated with the city budget, that is, the taxes of Seongnam citizens," adding, "If the club's own income from advertising or sponsorship increases, the city's budget burden decreases."

Lee also stressed, "Since Seongnam FC was established and is operated with Seongnam city’s budget, the nominal club owner is the incumbent mayor of Seongnam, but Seongnam FC is an independent corporation managed independently from Seongnam city under the direction of the CEO."

He added, "Since the operating results belong to Seongnam city, not to an individual, privatization of Seongnam FC is impossible."

Lee argued that the money received from various companies was advertising fees, not free sponsorship funds, and that considering Seongnam FC’s performance at the time and examples from other regional professional football clubs, the advertising fees received by Seongnam FC cannot be considered excessive.

Lee said, "The money paid was not free sponsorship but advertising fees received by Seongnam FC for actual advertising under advertising contracts," and "In 2015, when the advertising contracts were made, Seongnam FC had stabilized after acquiring Ilhwa FC, qualified for the Asian Cup by winning the FA Cup, ranked mid-table in the first division of professional football, and had the highest attendance among citizen clubs."

He explained, "The club received 5.8 billion KRW over three years from Doosan, 3.3 billion KRW over three years from Cha Hospital, and 4 billion KRW over two years from Naver (Jubilee Bank public service advertisement) for advertising," adding, "Professional football clubs advertise through player uniforms, stadium billboards, banners, etc., and considering over 40 annual games, broadcasts, media coverage, and advertising practices of other citizen clubs (Doosan Construction’s 5 billion KRW over two years for Daegu FC, STX Shipbuilding’s 20 billion KRW over five years for Gyeongnam FC, Shinhan Bank’s 2 billion KRW annually for Incheon FC, Kangwon Land’s 4 billion KRW annually for Gangwon FC), Seongnam FC’s advertising fees are not excessive."

Lee emphasized that there was no illegality or impropriety regarding the resolution of complaints from companies that the prosecution identified as 'unlawful requests' when applying the third-party bribery charge to him.

Regarding Doosan Construction’s hospital site, Lee said, "It was an eyesore left abandoned for nearly 20 years in a basic construction state," and "Seongnam city resolved the eyesore complaint by receiving a donation of 301 pyeong (about 10% of the site) in exchange for changing the land use and increasing the floor area ratio, and attracting seven Doosan affiliates."

Regarding Naver, he stated, "During the previous mayor’s term, Naver purchased private land through a private contract and built a headquarters, but needed a second building due to business expansion," and "In 2013, Seongnam city sold the remaining city-owned land to Naver through competitive bidding and subsequently approved construction according to the law, allowing related companies to move in."

He emphasized, "In addition to the corporate attraction achievements, changing the sale method to competitive bidding increased the land price by 16 billion KRW, and there was no illegality or impropriety in the sale and construction approval process."

Lee repeatedly stressed that the essential element of 'unlawful request,' which is necessary for establishing the third-party bribery charge, did not exist.

He said, "Advertising contracts are the results of sales activities by club executives and employees unrelated to Seongnam city administration," drawing a clear line by stating, "I was not involved in the club’s advertising sales."

Lee claimed, "I never requested advertising from companies in exchange for administration, nor did I perform administration in exchange for or related to advertising, nor did I receive such requests from companies, nor did I instruct or approve public officials to do so."

Lee emphasized that attracting advertising and sponsorship from local affiliated companies by local government heads is a normal duty, citing examples from other regional professional football clubs.

He said, "Local government heads try to attract advertising, donations, and sponsorships from local companies, organizations, institutions, and philanthropists," adding, "Hong Joon-pyo, governor of Gyeongnam who owns Gyeongnam FC, requested sponsorships from local companies including Nonghyup, the provincial treasury, and received hundreds of millions of KRW from numerous companies, which was publicized; the mayor of Incheon, who owns Incheon FC, also attracted advertising from local companies and publicized it, and such cases are countless."

Lee highlighted that attracting advertising fees reduced the city’s financial burden and that he personally did not gain any profit.

He emphasized, "Advertising fees were fully and transparently used for club operating expenses, and the city’s support burden decreased by the amount of advertising fees," adding, "I have not taken a single won of private profit related to club operation or advertising fees."

Lee also added, "To prevent moral hazard, the club lowered the minimum threshold of the advertising performance bonus system it drafted to below 100%, and changed the chairman of the performance bonus review committee from the club CEO to the city sports director to prevent excessive bonuses."

Finally, Lee reiterated that his actions were for the public interest and pointed out the problem that the Criminal Act prescribes the same penalties for bribery and third-party bribery committed by public officials.

He argued, "Even from a general perspective, it is not right to punish public officials who did not seek private gain but performed public interest acts (beneficial to the state or local government) the same as those who took private benefits."

As Lee pointed out, the Criminal Act prescribes the same statutory penalties for bribery and third-party bribery.

Article 129(Bribery) Paragraph 1 of the Criminal Act states, "When a public official or arbitrator receives, demands, or promises a bribe related to their duties, they shall be punished by imprisonment for not more than five years or disqualification for not more than ten years."

Article 130(Third-Party Bribery) states, "When a public official or arbitrator receives an unlawful request related to their duties and causes a third party to give a bribe or demands or promises such giving, they shall be punished by imprisonment for not more than five years or disqualification for not more than ten years."

Although the title of the legal provision is 'Third-Party Bribery,' when a public official who can be the subject of bribery does not directly receive a bribe but causes a third party to give a bribe, the public official is charged with 'third-party bribery,' and the bribe giver is charged with 'third-party bribery offering.'

If the amount of bribes received by the public official or given to the third party exceeds 100 million KRW, they are subject to aggravated punishment under Article 2 of the Act on the Aggravated Punishment of Specific Crimes (Bribery), receiving life imprisonment or imprisonment for not less than ten years, along with fines of two to five times the bribe amount.

Lee’s unusual disclosure of the statement on this day is interpreted as an unavoidable measure to raise public awareness amid ongoing reports about his indictment and the possibility of an arrest warrant as he appears before the prosecution again as a suspect in the Daejang-dong development preferential treatment and corruption allegations following the 'Seongnam FC' case.

Although Lee cited advertising fee cases from other regional professional football clubs, the core issue is whether the advertising fees or sponsorships were linked to 'unlawful requests.'

The Supreme Court holds that the unlawful request, a requirement for establishing third-party bribery, does not have to be explicit, and even in cases of implicit requests, if there is a 'common understanding or tacit agreement between the parties that the subject matter of the request and the money or goods provided to the third party are compensation for the execution of the duties,' third-party bribery is established.

In other words, in this case, the key point determining the establishment of third-party bribery is whether there was mutual recognition and understanding between the companies such as Doosan Construction that donated sponsorship funds and Lee that the sponsorship was given as compensation for resolving pending issues.

Lee also emphasized that he never personally gained private benefits related to Seongnam FC sponsorship funds and that Seongnam FC is an independent corporation, but originally, third-party bribery does not require the public official to gain benefits, and it is a crime established when there is no economic community relationship between the public official and the third party (if there is an economic community relationship, it constitutes joint principal of simple bribery).

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