'President's son evaded gift taxes'
By Na Jeong-ju
Lee Si-hyun
President Lee Myung-bak’s son is expected to face a probe for evading paying gift taxes of up to 400 million won in connection with an aborted purchase of a property the first family were to have used as a retirement residence.
At a news conference that concluded a one-month investigation yesterday, Special Counsel Lee Kwang-bum said that President Lee and his wife Kim Yoon-ok were not indicted.
However, Lee referred President Lee’s only son Si-hyung to the National Tax Service. The former head of the Presidential Security Service (PSS) and two incumbent officials were indicted for their involvement in the scandal.
Lee Si-hyung bought the land in Naegok-dong, southern Seoul, together with the PSS for 5.4 billion won ($4.9 million) in May last year — the PSS spent 4.28 billion won of taxpayers’ money and the rest was paid by the son.
The junior Lee told investigators that he “borrowed” some 600 million won from his mother and almost the same amount from his uncle, Lee Sang-eun.
The counsel team asked Si-hyung to submit the original copy of a promissory note that he claimed to have written before borrowing the money from his uncle, a request that he refused to comply with. There have been allegations that the money that he claimed came from his uncle might be a part of a secret fund belonging to President Lee.
“According to Lee Si-hyung, he received the money in cash directly from his uncle at the latter’s house on May 24 in 2011. However, we think that he may have lied about it,” the counsel told reporters.
“He failed to prove that he actually met his uncle on that day. We couldn’t prove that he lied about the source of the money, either. Lee Si-hyung has been cleared of suspicion of violating the real estate laws by using a false name in the real estate transaction,” the counsel said.
First lady Kim, who handed in a written statement over her alleged role in the scandal, has also been cleared of all suspicion, the team said. The counsel team concluded that there was insufficient proof she was involved in the purchasing process.
Lee Sang-eun owns a mid-sized automobile parts maker DAS, and Lee Si-hyung is an executive of this firm. There have been rumors that President Lee is the actual owner of the firm.
On Monday, the President rejected a request from the counsel to extend the investigation period by two weeks. Cheong Wa Dae also blocked the counsel’s attempt to raid the PSS to secure evidence, triggering public criticism that it’s trying to conceal the truth.
The special counsel concluded that the property contract caused a loss to the country’s treasury because the PSS shouldered some of the expenses for the junior Lee. That amounted to some 972 million won ($895,000), the counsel said.
The counsel indicted former PSS chief Kim In-jong and a PSS official Kim Tae-hwan on charges of breach of trust. Another PSS official, whose name wasn’t disclosed, was also charged with doctoring records regarding the property transaction and providing false data to the counsel team.
Cheong Wa Dae cancelled the retirement residence project after the scandal broke. The prosecution investigated the scandal early this year, but concluded that there were no irregularities committed concerning the property deal, prompting criticism from opposition parties.
Political parties agreed on an investigation by an independent counsel in September, which Lee’s aides criticized as an attempt to boost their political interests ahead of the Dec. 19 presidential vote.