"Thought It Would Be Clean"... Lee Jong-ho, Minister of Science and ICT Nominee, Faces Harsh Background Check

On the 3rd, faced intense questioning over various suspicions at the National Assembly confirmation hearing

Minister of Science and ICT nominee Jongho Lee is attending the confirmation hearing held at the National Assembly on the 3rd, responding to questions from lawmakers. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Kim Bong-su] "I thought there would be a future for the science and technology sector if candidate Lee Jong-ho became minister. But now, it seems there is no future." (Lee Yong-bin, Democratic Party of Korea lawmaker)

At the parliamentary confirmation hearing for Lee Jong-ho, nominee for Minister of Science and ICT, held on the 3rd, intense scrutiny was focused on various allegations including personal issues recently raised by the media. Ruling party lawmakers, including those from the Democratic Party of Korea, pointed out controversies surrounding Lee’s morality related to semiconductor technology patents, overseas business trips accompanied by his spouse and children, and allegations of gift tax evasion. Lee defended himself by explaining there were no issues or apologizing for mistakes.

First, independent lawmaker Yang Jeong-suk raised concerns about how Lee came to own the semiconductor technology patent (Bulk FinFET) that generated astronomical profits. Yang said, "It was developed with billions of won in national R&D funds and involved co-authors and students, yet only he has received about 8 billion won so far," and questioned, "Will you allow an individual to accumulate huge wealth from technology developed with national funds citing regulatory gaps even after becoming minister?" In response to a question from People Power Party lawmaker Jeong Hee-yong, Lee explained, "Regarding patent ownership, we made considerable efforts to ensure there were no legal issues at the time," adding, "Both the U.S. courts and the Korean Intellectual Property Tribunal thoroughly reviewed it and found no problems."

Lee’s alleged gift tax evasion also became a key issue. In November-December 2012, he purchased an apartment jointly with his spouse, gifting 540 million won in his wife’s share and 600 million won in deposits, totaling 1.14 billion won, but did not pay gift tax for nearly 10 years. However, three days after his ministerial nomination, on the 13th of last month, he filed a report and paid 219 million won in gift tax (including penalties) the next day. Democratic Party lawmaker Yoon Young-chan questioned whether this was intentional evasion. Yoon pointed out, "Did you deliberately adjust the shares to 60:40 instead of 50:50 between spouses to keep the gift tax below the 600 million won exemption limit?" and added, "You blame the legal and tax professionals, but common sense tells everyone otherwise." Fellow party member Woo Sang-ho also criticized, "Honestly, just admit you followed the advice of legal or tax experts to save taxes," and said, "You are wealthy, so you probably didn’t do it just to save a little tax, but lying is a bigger problem."

Lee strongly denied this, saying, "When purchasing the house, I entrusted the legal affairs to a notary to consider my spouse and just followed their instructions," and "Except for this case, I have paid all taxes immediately upon receiving the bills."

Lee’s overseas business trips accompanied by family members were also criticized. Lawmaker Yoon referred to the April last year confirmation hearing of current Minister of Science and ICT Lim Hye-sook, where People Power Party lawmaker Park Seong-joong criticized family accompaniment on overseas trips and said, "It casts doubt on the minister’s qualifications," then asked Lee, "What do you think about this?" Woo also questioned, "Internationally, spouses may accompany, but why bring children?" and "Didn’t you stay in the same hotel room?" Lee avoided the issue by saying, "There were no additional accommodation costs, but I didn’t pay close attention. I will be more mindful in the future."

Concerns about conflicts of interest regarding investment in an acquaintance’s company were also raised. Lee is known to have invested 1 million dollars (about 1.2 billion won) in 'GCT Semiconductor,' a U.S.-based semiconductor company founded by a junior colleague. Democratic Party lawmaker Lee Yong-bin argued, "Since the investment can be converted into stocks after April 5, 2024, if Lee resigns as minister before then and receives stocks, he could gain enormous profits," and claimed, "There is a high risk of conflict of interest for a minister responsible for the semiconductor sector." However, Lee denied this, stating, "Measures have been taken to permanently prevent conversion into stocks."

Meanwhile, the National Assembly Science and ICT Committee adjourned shortly after 12 p.m. The committee plans to resume the session this afternoon to conduct witness examinations regarding the controversies over Lee’s semiconductor patents and other issues.