Murky allegations eat into Lee's presidency

By Kim Tong-hyung

Since arriving at Cheong Wa Dae in 2008, President Lee Myung-bak repeatedly claimed that his administration was ``ethically prefect’’ and stressed his camp didn’t receive ``a single penny’’ from businesses during the elections.

His backers even suggested ever so elegantly that Lee’s successful corporate career, which included a stint as CEO of Hyundai Engineering and Construction, made him safe from temptations about under-the-table deals because he was already one of the country’s richest individuals.

Fast forward to 2012, and Lee’s lame duck government looks anything but clean-cut. So appearances can be deceptive.

It seems that virtually every major government attempt pushed under Lee, from the massive restoration project of the four major rivers to the licensing of new television networks and the purging of the secondary banking sector, has been linked to allegations of corruption.

Entangled in a complicated web of bribe taking, sweetheart deals, political payoffs, cronyism and nepotism are politicians, businessmen and presidential family members who had been holding Lee’s inner-circle together, painting a twisted and all too familiar picture of a political force approaching its expiration date.

The list of disgraced high-profile figures is headed by former Korea Communications Commission (KCC) Chairman Choi See-joong, arrested for taking bribes over a massive shopping mall project in southern Seoul.

For most of the Lee administration, the 75-year-old former Dong-A Ilbo journalist had been one of the most powerful and influential men in Korea.

He ruled the KCC, Korea’s regulator for broadcasting and telecommunications, with unquestioned authority and assertiveness. He was known as the Cheong Wa Dae “mentor” who had the ear of President Lee on any and every issue from the appointment of policymakers to the designing of political strategies.

Choi is now nothing of the above, and Lee seems intent on downplaying his relationship with him.

According to prosecutors, Choi is suspected of receiving around 600 million won (about $512,000) from businessman and longtime friend Lee Dong-ryeol in 2005 in exchange for peddling influence over construction rights involving the Pi City project in Yangjae-dong. President Lee was Seoul mayor at the time.

Investigators believe former Knowledge Economy Vice Minister Park Young-joon, whose close relationship with Lee earned him the nickname “King Vice Minister,” had a role in the bribery scheme as well.

Choi was also a central figure in the Lee government’s plans to deregulate the media marketplace and introduce new television channels. Despite concerns over diversity and discourse, Choi pushed to eliminate the country’s traditional cross-ownership ban on newspapers and television channels. This allowed the country’s big conservative newspapers like Chosun, Dong-A, JoongAng and Maeil Business, who also happened to be Lee’s biggest supporters, to advance into the television business.

The licensing process that was supposed to take two years, dragged on to “Year 4,” it became obvious that the KCC’s drive for a so-called “media big bang” was motivated less by the intention to jolt growth in the television market than to control the behavior of competing media outlets.

The KCC has yet to deliver a white paper on the licensing process, backtracking on its promise of four years ago, and continues to refuse to reveal the list of shareholders and financial investors that helped the newspapers launch their television stations.

There are several reasons to think that the policymakers at the KCC bent the rules for the new television channels and pressed telecommunications operators like KT to invest in them.

There is also a possibility that the country’s out-of-control savings bank fiasco could blow up in the face of President Lee. A total of 20 savings banks have been suspended by financial authorities since last year in an attempt to purge the toxic secondary banking sector.

The clean-up process and the investigations into the troubled lenders have unveiled a wealth of evidence for corruption in addition to bad management.

Former Hana Financial Chairman Kim Seung-yu, a close confident of Lee, could be the match that lights the fuse. He faces allegations of murky connections with arrested savings bank CEOs like Mirae Savings Bank head Kim Chan-kyung, who prosecutors suspect bribed the then-Hana boss in exchange for investment last year.

Lee’s brother, Sang-deuk, former lawmaker of the ruling Saenuri Party, was forced to give up his candidacy in the recent parliamentary elections after one of his aides was arrested for taking kickbacks.