By Lee Kyung-min
The prosecution searched the homes of key officials at the scandal-ridden company DAS, through which former President Lee Myung-bak allegedly managed a 12 billion won (11 million) slush fund. This “investment” was returned in full unlike those of 5,500 others who lost a combined 100 billion won in a stock manipulation scandal in 2001.
This was part of a widening investigation into Lee over allegations that after taking office in 2013 he abused his presidency and mobilized multiple government agencies to have the money returned in what could have been a failed investment a few years ago. He may be questioned as early as next month or in March after the 2018 PyeongChang Winter Olympics.
Investigators searched the homes of four high-ranking DAS officials including Shin Hak-su, who served as a presidential secretary for general affairs as well as a civil affairs official under the Lee administration, to confiscate documents containing financial records and details on decision-making processes, as well as personal belongings. Shin, who began working as the company auditor in 2015, was a key aide to Lee ever since he was a lawmaker. He also helped him with the election campaign when he ran for the Seoul city mayor post.
Shin, as a presidential secretary, is alleged to have played a key role as a messenger between Cheong Wa Dae and an unidentified number of figures involved in helping DAS get the investment returned. He also delivered Lee’s orders to his older brother, Lee Sang-eun, the ostensible owner of DAS, on major decisions concerning the company’s financial status.
This allegation was substantiated by a former chauffeur who worked for Lee Sang-eun for 18 years. The man said in an interview with multiple media outlets that it took only three months for him to realize that Lee Myung-bak was the de facto owner of the company, information all company workers knew. Up until 2008, he said, DAS’s accounting books were all hand-written, which he and others knew was a convenient way for Lee Myung-bak to use an unlimited amount of company funds. DAS even paid even for cars he bought with company cash.
DAS invested 19 billion won through an investment consulting company BBK, managed by Kim Kyung-jun, in 1999. Following a stock-rigging scam two years later, Kim left the country with 38 billion won in embezzled BBK funds.
Most investors lost their money, but only those close to Lee had money returned including DAS which received 5 billion won, about a quarter of its initial investment. Amid a civil suit against BBK, filed by many victims seeking compensation, Kim only gave DAS the remaining 14 billion won, which included 12 billion won in what is suspected to be the slush fund, returning the full amount of the investment. The prosecution suspects the foreign ministry was involved, given Kim transferred the money from his Swiss bank account.
Meanwhile, in a hand-written confession recently submitted by former DAS head Kim Sung-woo to prosecutors, he retracted earlier statements made during prosecution investigations in 2007 and 2008. At that time, Kim said DAS was unrelated to the former president.