Prosecutors: "Lee Jae-myung Feared Breaking Political Promise, Demanded Sponsorship for Seongnam FC"

Lee Jae-myung, leader of the Democratic Party of Korea, attended the opening ceremony of the Party Member Zone held at the central party office in Yeouido, Seoul, on the 5th. After the event, he delivered a greeting at the open supreme council meeting. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kim Hyung-min] The prosecution, which is reinvestigating the 'Seongnam FC sponsorship fund allegations,' is understood to be investigating on the grounds that Lee Jae-myung, then mayor of Seongnam and current leader of the Democratic Party of Korea, selected companies with pending civil complaints to make sponsorship donations, considering his political gain.

According to the legal community on the 5th, the prosecution believes that immediately after Lee acquired Seongnam Ilhwa, the predecessor of Seongnam FC, and faced difficulties in securing operating funds for the club, he individually contacted companies with urgent civil complaints such as building permits, rather than relying on voluntary sponsorships from companies. This is stated in the indictment of the case involving former Doosan Construction CEO Mr. A and former Seongnam City Strategic Promotion Team leader Mr. B, charged with violations of the Act on the Aggravated Punishment of Specific Crimes (bribery).

According to the indictment, after acquiring Seongnam Ilhwa in December 2013 while serving as mayor, Lee planned to secure annual operating funds of 15 billion KRW through 7 billion KRW from the city budget, 5 billion KRW from corporate funds, and 3 billion KRW from public fundraising. However, only 800 million KRW was secured from two rounds of citizen fundraising in 2014. Concerned about failing to fulfill political promises related to the football club acquisition, Lee sought ways to obtain sponsorship funds for Seongnam FC by contacting companies with pending issues requiring approval for various projects or construction permits.

In particular, the indictment details the process by which Seongnam FC received sponsorship funds from Doosan Construction and Lee’s related instructions. According to the prosecution’s investigation, since 2010, Doosan Construction, facing liquidity crises and needing to raise funds through asset sales, was unable to sell the medical facility site in Jeongja-dong, Bundang-gu, due to repeated rejections of its application for land use changes, leaving the site idle for a long time.

In November 2014, upon learning that receiving operating funds in cash as compensation for land use changes was illegal, Lee personally wrote in a report instructing to "review and report on a plan to recover part of the profits from the land use change" and ordered the responsible officials to secure maximum benefits from Doosan Construction in exchange for the land use changes, according to the indictment.

Subsequently, city officials demanded a 15% donation ratio as compensation for the land use change and floor area ratio increase of the Jeongja-dong site from Doosan Construction. When Doosan Construction refused, the city proposed "setting the donation ratio at 10%, exempting the remaining 5%, and providing the equivalent amount of 5 billion KRW to Seongnam FC." Eventually, the city and Doosan Construction signed an agreement based on this arrangement.

Additionally, the prosecution viewed that Lee established a "revenue increase performance bonus operation plan" to allow performance bonuses to be paid to Seongnam FC employees and personally wrote a handwritten note changing the chairperson of the bonus review committee from the Seongnam FC CEO to a Seongnam City director, instructing that this change be implemented.