By Kim Young-jin

President Lee Myung-bak failed to attend a government meeting Wednesday, sparking speculation that he was troubled over the arrest of his brother on bribery charges early in the day.

While aides said the absence was for technical reasons, many observers believe he was reeling from the arrest of his elder brother Lee Sang-deuk, a former six-term lawmaker who had played a key advisory role.

Already rocked by a series of corruption scandals involving figures close to him, as well as an unpopular attempt to sign a military intelligence pact with Japan, watchers said the bribery accusation was pushing the administration into lame-duck no-man’s land. Lee’s term ends in February 2013.

The elder Lee was taken to Seoul Detention Center after the Seoul Central District court issued an arrest warrant late Tuesday. The 77-year-old is accused of helping troubled savings banks ㅡ Solomon and Mirae ㅡ ­ avoid audits in exchange for bribes totaling over $500,000 between 2007 and 2011.

Later, President Lee called off his attendance at an event in Seoul to mark Population Day where he was slated to raise awareness on the nation’s low birthrate. Officials said Lee would spend the day reviewing reports.

Known to be a major behind-the-scenes player during Lee’s election and tenure, Lee Sang-deuk is the first brother of a sitting South Korean president to be arrested.

An ugly incident occurred after the elder Lee’s arrest warrant was issued, with some people who lost money when the banks were suspended throwing eggs at him and pulling at his necktie.

Attention now swings to how Cheong Wa Dae will handle the scandal, with many wondering whether the President is mulling apologizing for the affair after his brother is put on trial.

Political watchers said with time running out in Lee’s single, five-year term the botched deal with Tokyo over intelligence sharing showed the extent of his waning power. Last week, Kim Tae-hyo, a top foreign policy hand, resigned to take responsibility for pushing the deal during a Cabinet meeting.