Speculation Investigation Targeting High-Ranking Officials... Likely to Take More Time

Over 60 Members of the National Assembly and Senior Officials
Turning Point for the Special Investigation Headquarters' Success
Key Focus on Proving Use of Insider Information
Extensive Work Including Witness Interviews

Hong Nam-ki, Acting Prime Minister, is presiding over the 'Meeting on Cooperation for Investigation of Real Estate Speculation Suspicions' at the Government Complex in Jongno-gu, Seoul, on the 19th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Lee Gwan-joo] The government joint special investigation headquarters (Special Investigation Headquarters, SIH), which has been accelerating investigations into real estate speculation allegations mainly involving local government officials and employees of the Korea Land and Housing Corporation (LH), is now targeting ‘high-ranking officials’ such as senior government officials and members of the National Assembly. However, it is expected to take some time to determine whether these individuals directly used ‘inside information.’

According to the SIH on the 21st, more than 60 current and former senior government officials, members of the National Assembly, local government heads, and local council members are currently under investigation for real estate speculation allegations. Among them, four are ‘high-ranking officials’ of grade 3 or higher, including a former Administrator of the Administrative City Construction Agency (Happy City Agency) at the vice-ministerial level, 11 local government heads, and 10 members of the National Assembly and their families.

The figure making the most progress in the investigation is former Happy City Agency Administrator Mr. A, who is suspected of speculation. The Serious Crime Investigation Division of the National Police Agency is directly conducting the investigation, analyzing materials secured through search and seizure, and conducting witness interviews. Among local government heads, regarding the speculation allegations against Jeong Hyun-bok, former mayor of Gwangyang, Jeonnam Province, a search and seizure of Gwangyang City Hall and his residence was conducted on the 13th, and related materials are being analyzed. In cases involving members of the National Assembly, all complainants have been interviewed, and full-scale investigations have begun.

The core of the investigation into high-ranking officials, as with other real estate speculation allegations, lies in determining whether speculation was conducted using inside information. Only if the use of inside information by public officials is confirmed can they be punished under the ‘Act on the Prevention of Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights Commission,’ which prohibits public officials from using confidential work information.

So far, the six current and former public officials and LH employees detained by the SIH were all found to have used inside information to some extent, which allowed the court to issue pre-trial detention warrants. For example, the first detained official, a Pocheon city employee, worked in the railway project department, and a former Gyeonggi Provincial Government official detained on suspicion of speculation near the Yongin semiconductor cluster site had served as the head of the Investment Promotion Division. This indicates that their involvement in specific duties made it easier to confirm the connection to speculation.

In contrast, investigations into high-ranking officials are expected to take more time. Many members of the National Assembly, local council members, and senior public officials do not directly handle specific development areas. If the use of inside information is suspected, it is necessary to verify through which channels and from whom the information was obtained. This requires securing materials through search and seizure and conducting extensive witness interviews. In fact, although a search and seizure related to Mr. A was conducted on the 26th of last month, nearly four weeks later, he has not yet been summoned for questioning. A SIH official said, “There is a lot of material to analyze,” and “We are coordinating the schedule with the person involved.”

This investigation into high-ranking officials is expected to be a critical turning point determining the success or failure of the SIH’s efforts. For the police, who have emphasized investigations without sanctuary, it is time to ensure thorough investigations into high-ranking officials to demonstrate investigative capability and resolve all speculation allegations. A SIH official said, “There are many ongoing investigations related to local council members,” and “Regardless of whether suspects are detained, we will continue to apply for seizure and confiscation to recover criminal proceeds.”