By Lee Kyung-min
Former President Lee Myung-bak was indicted Monday on a wide range of corruption charges. The Seoul Central District Prosecutors' Office indicted him on 14 charges including bribery, abuse of power, embezzlement, breach of trust, tax evasion and violations of the election and presidential records laws.
“We concluded former President Lee was involved in various crimes. We will do our utmost to have Lee subject to a sentence corresponding to the charges against him,” a prosecutor leading the investigation said during a televised press briefing.
Bribery in the amount of 11 billion won ($10.5 million) is the gravest charge Lee faces, a claim he flatly denies. Taking 100 million won or more in bribes is punishable by a minimum prison term of 10 years. The Supreme Court sentencing guidelines stipulate imposing a minimum of an 11-year sentence on those who receive 500 million won or more. Lee only admitted to receiving $100,000 from the National Intelligence Service through an aide.
The former president is suspected of receiving around 700 million won in bribes from the National Intelligence Service (NIS) via his closest aides, many of whom have confessed to their roles in delivering the money to him. Prosecutors are also looking into whether Lee received 1 billion won the NIS gave to his former presidential secretary for general affairs.
He is also suspected of having received 2.26 billion won from former Woori Financial CEO Lee Pal-sung in return for helping him get the top post by exerting undue influence on the financial institution. At the time, the government was its largest shareholder. Prosecutors claim to have substantiated this charge by questioning the ex-president's son-in-law, Samsung Electronics senior executive Lee Sang-joo, who admitted to delivering 800 million won to Lee Sang-deuk, an elder brother of the ex-president, after he received it from a close aide of Lee Pal-sung. The son-in-law is also suspected of having received an additional 1.4 billion won from Lee Pal-sung, a claim he denies.
Prosecutors suspect Samsung Group of paying $5.85 million (6.8 billion won) as a retainer to U.S. law firm Akin Gump, of which it was a major client, following the questioning of former Samsung Card Vice President Choi Do-seok. Choi managed the firm's financial matters alongside former Samsung Group Vice Chairman Lee Hak-soo, who confessed the firm under his leadership paid legal fees that helped Lee Myung-bak recover 14 billion won in what could have been a failed investment. This was in return for a presidential pardon for group Chairman Lee Kun-hee in 2009.
Prosecutors said Lee embezzled 34.9 billion won including funds from DAS, a car parts manufacturer through which he allegedly operated a 33.9 billion won slush fund between 1991 and 2007. They added he allegedly evaded 3.1 billion won in DAS corporate tax through accounting fraud and used 430 million won in DAS funds to pay his election campaign officials between 1991 and 2000.
Lee's close aide, Lee Byeong-mo who managed his personal assets confessed Lee owned land in Dogok-dong, southern Seoul, under a “borrowed” name. The aide said the land sale proceeds were funneled into DAS, substantiating the prosecution's supposition that the ex-president was the owner of the firm, a claim he flatly denied. Prosecutors also believe a computer hard drive confiscated from Lee Byeong-mo's car could be “smoking gun” evidence proving Lee Myung-bak was the owner of DAS.
Prosecutors are also seeking charges of abuse of power following efforts undertaken by Cheong Wa Dae to discuss plans to hand over DAS shares to his son Lee Si-hyung following the death of Kim Jae-jeong, Lee Myung-bak's brother-in-law who held a nearly 49 percent stake in DAS. This, the prosecution believes, is clear evidence in proving abuse of power as Cheong Wa Dae officials would have no reason to review such a strategy unless Lee Myung-bak had directed them.
This is further corroborated by 40 boxes of over 3,400 documents confiscated in January from the basement of the Yeongpo Building in Seocho, southern Seoul, in a search based on the statement of two key former presidential secretaries who have already been indicted. The boxes with words “DAS” and “BH,” short for Blue House, the presidential office, contained documents that prosecutors said show Lee Myung-bak also lent 12.3 billion won _ interest-free _ in DAS and affiliates' funds to a company owned by his son, one of many business favors granted to the junior Lee by his father, which could constitute embezzlement and breach of trust.
Lee and former first lady Kim Yoon-ok are suspected of spending 570 million won using a DAS corporate credit card between the mid-1990s and late 2007, shortly before Lee won the presidency, which prosecutors believe could provide further evidence the former president was the owner of DAS. Kim used the card in local department stores and overseas duty free shops. Lee used 50 million won in DAS funds to purchase a vehicle for his personal use.
Lee allegedly received 500 million won from Daebo Group, in return for helping the firm land construction work. He is also suspected of receiving 200 million won from the head of ABC-Sangsa, the operator of a famous bakery in Gangnam, in exchange for giving him a senior position at the Seoul office of the National Unification Advisory Council, a presidential advisory body that wields great regional business influence. Lee, the prosecution added, allegedly took 400 million won in bribes from Kim So-nam, a former lawmaker of the Grand National Party, the predecessor of the main opposition Liberty Korea Party, in return for fielding her in the 2008 general election. He received 300 million won from a monk at the request of one of his former presidential secretaries, with details remaining unclear over what favors were granted to the religious figure in return.
The controversy concerning DAS nearly cost him the presidential election in 2007 because it was among the few entities that recovered its initial investment in full during his term, which prosecutors believe was the result of mobilizing Cheong Wa Dae and foreign ministry resources. This helped Lee avoid the fate of 5,500 investors who lost an aggregate 100 billion won in 2001 in a stock price manipulation scandal. Lee, beset by the then-snowballing fraud suspicion in the lead-up to the 2007 election, made a campaign pledge that he would give his entire assets to social charities after taking office, which turned out to be empty words following the establishment of Cheonggye Foundation, a nonprofit organization Lee set up in 2009 to avoid paying hundreds of billions on won in taxes. After taking office, Lee even said his administration was the “cleanest and most morally upright one in the history of the country.”
Four earlier investigations conducted both by the prosecution and a special counsel-led team cleared Lee of allegations involving DAS, a conclusion that fanned public distrust in the country's justice system. The controversy surrounding DAS re-emerged in 2013 after the junior Lee, who became a senior executive at the firm only four years after beginning his career there primarily due to his father, attempted to further consolidate his grip on the firm by interfering in company management including financial issues.