Prosecutors Raid 20 Locations Including Doosan Construction Over ‘Seongnam FC Illegal Sponsorship Fund Allegations’

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The police investigating the 'Seongnam FC sponsorship fund allegations' involving Lee Jae-myung, leader of the Democratic Party of Korea, conducted a search and seizure at the Seongnam FC office in Bundang-gu, Seongnam-si, Gyeonggi-do on the afternoon of May 17. They are seen moving the seized items.
[Image source=Yonhap News]

[Asia Economy Reporter Heo Kyung-jun] The prosecution has launched a full-scale investigation by conducting extensive raids related to the allegations of illegal sponsorship funds involving Seongnam FC.

The Criminal Division 3 of the Suwon District Prosecutors' Office Seongnam Branch (Chief Prosecutor Yoo Min-jong) is conducting raids on 20 locations, including Doosan Construction and Seongnam FC, which are related to the illegal sponsorship fund allegations involving Seongnam FC on the 16th.

Earlier, the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency notified the prosecution on the 13th that there is sufficient evidence to recognize the charge of third-party bribery under the Special Act against Lee Jae-myung, leader of the Democratic Party of Korea. This investigation result contrasts with the Bundang Police Station’s decision last September not to indict Lee due to insufficient evidence. Following the complainant’s objection and the prosecution’s request for supplementary investigation, the police resumed the investigation in February and overturned the previous result after seven months.

On the 14th, Yoon Hee-geun, Commissioner of the National Police Agency, appeared before the National Assembly and stated regarding the investigation into Lee related to the Seongnam FC sponsorship allegations that “additional evidence was discovered during the supplementary investigation process,” confirming the charge of third-party bribery.

At the plenary session of the National Assembly’s Public Administration and Security Committee, in response to a related question from Democratic Party lawmaker Lee Hae-sik, Commissioner Yoon said, “During the supplementary investigation, testimonies from persons involved in the case were reversed, and objective evidence consistent with the testimonies was additionally discovered through raids.” He added, “I understand that the Gyeonggi Southern Provincial Police Agency made this judgment considering relevant legal principles and precedents.”

The ‘Seongnam FC allegations’ originated in 2018 when the Bareunmirae Party filed a criminal complaint, claiming that Lee, while serving as mayor of Seongnam and as the club owner of Seongnam FC, secured large sponsorship funds from companies in exchange for resolving their business issues.

In fact, after the Seongnam Ilhwa football team was transformed into the citizen football club Seongnam FC and Lee became the club owner, six companies located in Seongnam?Doosan Construction (4.2 billion KRW), Naver (3.9 billion KRW), NongHyup (3.6 billion KRW), Bundang CHA Hospital (3.3 billion KRW), Hyundai Department Store (500 million KRW), and Alphadom City (550 million KRW)?provided a total of 16.05 billion KRW to Seongnam FC from 2015 to 2017 under the names of sponsorship and advertising fees.

In June 2018, the Bareunmirae Party filed a criminal complaint against Lee with the prosecution (Seongnam Branch) on charges of third-party bribery. The allegation was that, similar to how several large corporations provided large sponsorship funds to the Mir Foundation and K-Sports Foundation during former President Park Geun-hye’s administration, these companies owning major facilities in Seongnam might have indirectly supported Seongnam FC as a means to expect resolution of their issues through Lee or as a quid pro quo for resolving specific civil complaints such as building permits or land use changes.

There were even suspicions raised that some of the Seongnam FC sponsorship funds were deposited into related sports organizations in Seongnam and then withdrawn in cash.

After the Bareunmirae Party’s complaint, the police (Bundang Police Station), which took over the case, delayed for three years and three months before deciding last September not to indict due to insufficient evidence. Subsequently, after the complainant’s objection, the Seongnam Branch took over the case but did not decide on whether to reinvestigate for several months.

As the controversy grew, then Prosecutor General Kim Oh-soo ordered former Suwon District Prosecutors’ Office Chief Shin Sung-sik to conduct a fact-finding investigation. However, suspicions of a ‘poor fact-finding investigation’ arose as no statements were taken from investigation team members even two weeks after the allegations surfaced.