Prosecutors Indict Lee Jae-myung Without Detention Over 'Daejang-dong and Seongnam FC' Allegations... "Local Government Power Manipulation" (Comprehensive Report 2)

On the 22nd, the prosecution indicted Lee Jae-myung, leader of the Democratic Party of Korea, in connection with the 'Wirye and Daejang-dong development corruption' and 'Seongnam FC illegal sponsorship' cases. This comes one year and six months after the investigation into the Daejang-dong corruption began in September 2021.

Lee Jae-myung, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly in Yeouido, Seoul on the 13th. Photo by Hyunmin Kim kimhyun81@

Charged with 5 counts... 42.8 billion won bribery agreement excluded

The Seoul Central District Prosecutors' Office Anti-Corruption Investigation Division 1 (Chief Prosecutor Eom Hee-jun) and Division 3 (Chief Prosecutor Kang Baek-shin) indicted Lee without detention on five charges. Regarding the Daejang-dong development corruption case, they applied charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and violation of the Act on the Prevention of Conflict of Interest of Public Officials. For the Wirye New Town development preferential treatment case, they applied charges of violation of the Anti-Corruption Act, and for the Seongnam FC illegal sponsorship case, charges of third-party bribery under the Act on the Aggravated Punishment of Specific Crimes and violation of the Act on the Regulation of Concealment of Criminal Proceeds were applied.

A prosecution official stated, "Lee allowed a private contractor, who colluded with him politically, to monopolize the enormous development profits that should have belonged to the citizens of Seongnam." He added, "Lee was confirmed as the final person responsible who not only received reports and approved the entire project but also directly designed and executed it."

He also emphasized, "As explained when requesting the arrest warrant, since this is a case of local government power manipulation, the investigation was not targeting Lee as the leader of the main opposition party, but rather investigating illegal collusion and misconduct during his tenure as mayor of Seongnam."

However, the prosecution decided not to include the charges related to the suspicion of a 42.8 billion won bribery agreement (receiving bribes after wrongful acts) in the indictment and will continue investigating. This suspicion involves Lee allegedly providing preferential treatment to private contractors in Daejang-dong and promising to receive 42.8 billion won worth of shares in Cheonhwa Dongin No. 1 through his close associates. Also excluded from this indictment is the charge of violating the Political Funds Act for receiving 847 million won in presidential primary funds from Nam Wook via Kim Yong, former deputy director of the Democratic Research Institute.

Regarding the failure to secure testimonies from Kim and other related persons, a prosecution official said, "We do not rely on the testimony of specific individuals for investigations," adding, "We are carefully reviewing objective materials about the situation and process at the time and will decide on further actions based on supplementary investigations."

This indictment of Lee is the second since the inauguration of the Yoon Suk-yeol administration. Lee is currently on trial after being indicted last September for false statements during the 20th presidential election campaign, including denying knowledge of the late Kim Moon-gi, head of the Seongnam Development Corporation's Development Division 1.

Additional indictment of Jeong Jin-sang... Seongnam branch indicts corporate officials who made sponsorships

The prosecution also additionally indicted Jeong Jin-sang, former Political Coordination Officer in the party leader’s office and Lee’s closest aide, in connection with the Seongnam FC illegal sponsorship case. The prosecution judged that Jeong played a leading role in the breach of trust while serving as Seongnam City Policy Secretary from 2010 to 2018. Jeong is currently on trial after being indicted without detention on charges including receiving bribes of 42.8 billion won promised by the Daejang-dong group (receiving bribes after wrongful acts) and accepting 240 million won in bribes. On the same day, the Suwon District Prosecutors’ Office Seongnam branch indicted corporate officials from Doosan Construction, Naver, and others who made quid pro quo sponsorship payments to Seongnam FC, as well as Seongnam city officials, on charges of bribery.

Prosecution
Photo by Yonhap News

Lee has been under prosecution investigation for allegedly designing and promoting the Daejang-dong urban development project in a way favorable to private contractors, funneling 788.6 billion won in profits to the Daejang-dong group including Kim Man-bae, major shareholder of Hwacheon Daeyu Asset Management, and causing 489.5 billion won in losses to Seongnam City. In the Wirye New Town development project, he is accused of providing inside information to private contractors, resulting in unfair gains of 21.1 billion won. Additionally, as the owner of Seongnam FC, he is accused of providing conveniences such as building permits and land use changes to four companies including Doosan Construction and Naver, and in return securing 13.35 billion won in sponsorship funds for Seongnam FC. This case was investigated by the Suwon District Prosecutors’ Office Seongnam branch and then transferred to the Seoul Central District Prosecutors’ Office. Previously, the prosecution requested an arrest warrant for Lee last month regarding the Wirye and Daejang-dong development corruption and Seongnam FC illegal sponsorship cases, but it was automatically dismissed after the National Assembly rejected the consent for arrest.

Lee Jae-myung investigation 'ongoing'... hurdles remain including North Korea remittances

While the prosecution’s indictment without detention of Lee marks a pause in the one year and six months of investigations into the Daejang-dong development and related allegations, investigations surrounding Lee are expected to continue for the time being.

The prosecution indicted Lee on the charges listed in the arrest warrant requested last month, but investigations remain into key suspicions related to the Daejang-dong project, including the 42.8 billion won bribery agreement, illegal presidential election funds, and Baekhyeon-dong development corruption.

Investigations related to Lee are also ongoing at the Suwon District Prosecutors’ Office and Seongnam branch. The Suwon District Prosecutors’ Office Criminal Division 6 (Chief Prosecutor Kim Young-nam) is investigating Lee’s involvement in North Korea-related projects with Gyeonggi Province and Ssangbangwool.

The Suwon investigation team believes that Ssangbangwool remitted 8 million dollars for the North Korea project Lee was promoting, with 5 million dollars (approximately 6.5 billion won) used as inter-Korean cooperation expenses for Gyeonggi Province and 3 million dollars (approximately 3.9 billion won) covering Lee’s travel expenses to North Korea. The investigation team is considering applying third-party bribery charges against Lee related to the North Korea remittances and is reportedly contemplating summoning Lee for questioning.

The Seongnam branch Criminal Division 3 (Chief Prosecutor Yoo Min-jong) is investigating the 'Jeongja-dong hotel development preferential treatment suspicion.' The core of the suspicion is that while constructing a tourist hotel on Seongnam city-owned land in Jeongja-dong, various preferential treatments such as land use changes were granted by Seongnam City.

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