Unresolved Doubts in Daejang-dong Special Investigation... Emergence of 'Gangster Involvement Theory'

Dispute Over Removal of Excess Profit Recovery Clause
People Power Party Attacks with 'Breach of Trust' Charge
Lee Jae-myung: "Recover Half of Development Profits"

Conflict Over 'Close Associate' Responsibility
Lee Announces Legal Action Over '2 Billion to Gangsters' Allegation

[Asia Economy Reporters Hyunju Lee and Chae-eun Koo] The National Assembly Public Administration and Security Committee’s audit, attended by Lee Jae-myung, the Democratic Party presidential candidate in his capacity as Governor of Gyeonggi Province, turned out to be a session where Lee mostly defended himself without any decisive blow from the opposition party. Political commentators even said that "Candidate Lee enjoyed a promotional effect worth 10 billion won." Criticism was also raised against the People Power Party for their ‘lack of preparation,’ despite the need for thorough verification and sharp questioning. It has been pointed out that they essentially squandered a ‘golden opportunity’ that could have had a decisive impact on Lee’s presidential campaign. Nevertheless, some analyses suggest that Lee’s explanations were insufficient to dispel all suspicions. Professor Choi Chang-ryeol of Yongin University said in a phone interview on the 19th, "While Lee’s somewhat arrogant attitude at the audit might have been well received by his supporters, it was likely insufficient to attract the moderate voters."

◆Deletion of the Excess Profit Recovery Clause…Is It Embezzlement or Not? = The biggest issue at the previous day’s audit was whether Lee was guilty of ‘embezzlement.’ The opposition’s attack point was that Seongnam Urban Development Corporation deleted the excess profit recovery clause midway, causing a loss that could be applied as embezzlement in the course of duty. People Power Party lawmaker Park Soo-young presented visual materials stating it was a ‘clear embezzlement, at least dereliction of duty,’ and questioned, "Did you receive a report on the Daejang-dong excess profit securing plan at that time or not?" However, Lee’s side defended by stating that the Daejang-dong development was attempted in the order of ‘private → public → public-private development,’ recovering half of the development profits. Whether the 550.3 billion won recovered amount can offset the application of embezzlement charges is expected to be a key issue at the Land, Infrastructure and Transport Committee audit scheduled for tomorrow (the 20th). Above all, the embezzlement issue hinges on whether former Seongnam Development Urban Corporation Planning Director Yoo Dong-gyu received preferential treatment in return during the process of deleting the ‘excess profit recovery’ clause, which is linked to the prosecution’s investigation. Professor Shin Yul of Myongji University commented, "The opposition lacked information, and Lee’s side defended only based on circumstantial evidence, so nothing has been clearly revealed."

Lee Jae-myung, the Democratic Party presidential candidate and governor of Gyeonggi Province, is responding to the final question during the National Assembly's Public Administration and Security Committee's audit of Gyeonggi Province at the Gyeonggi Provincial Government Office in Suwon, Gyeonggi Province, on the afternoon of the 18th. 2021.10.18 [Photo by Gyeonggi Joint Press Corps] [Image source=Yonhap News]

◆Yoo Dong-gyu and Associates, Political Responsibility Also at Issue = The opposition emphasizes the ‘close relationship’ between former Director Yoo, who oversaw the entire Daejang-dong project, and candidate Lee, stressing Lee’s responsibility. People Power Party lawmaker Kim Hyung-dong asked, "It is said that Yoo Dong-gyu had a two-hour phone call before throwing away his cellphone on September 4th. Did you talk to him?" Lee replied, "I have never done that." The opposition continued counterattacks, claiming that there is a close-knit group called ‘Left Jin-sang (Jeong Jin-sang, former Gyeonggi Province Policy Director) and Right Dong-gyu’ at the Gyeonggi Provincial Government, but failed to clearly reveal what is close to the truth.

Lee’s side avoided attacks with a vague stance acknowledging moral responsibility while distancing somewhat from former Director Yoo. At the audit, Lee stepped back by saying, "I emphasized integrity, so this is shameful," and "I feel truly sorry for Mr. Yoo and personally feel betrayed." However, regarding the opposition’s attacks emphasizing the link with former Director Yoo, Lee’s camp is responding by pointing to the close relationship between opposition presidential candidate former Prosecutor General Yoon Seok-youl and Prosecutor Son Jun-sung.

◆Interest in How Far the ‘Gangster Involvement Allegation’ Will Expand = The allegation of gangster involvement against candidate Lee was officially raised for the first time at this audit. People Power Party lawmaker Kim Yong-pan revealed that Lee received 2 billion won from Park Cheol-min, a former gangster, and Lee warned of legal action, saying, "If I had taken that money, I wouldn’t be here." Although the authenticity of the cash bundle photo presented as evidence by lawmaker Kim remains controversial, separately, Park’s lawyer Jang Young-ha plans to file a complaint against Lee. Since suspicions related to the Daejang-dong development allegations have not all been resolved, the ruling and opposition parties are expected to clash again on the same topic at the Land, Infrastructure and Transport Committee audit scheduled for the 20th. Candidate Lee plans to highlight that the past organized obstruction by the opposition party was the reason why 100% of the massive development profits from private companies could not be recovered, and intends to announce plans to supplement the bill, including a ‘counterattack.’ It is also expected that Democratic Party lawmaker Park Sang-hyuk, a member of the Land Committee, will mention that he is preparing to propose a bill related to the ‘Development Profit National Recovery System.’