After 1 year and 6 months of investigating the Daejang-dong urban development corruption case, the prosecution indicted Lee Jae-myung, leader of the Democratic Party of Korea, without detention, but challenges remain. The allegation involves a 42.8 billion KRW bribe agreement. It is suspected that Lee promised to provide special favors to private developers in Daejang-dong and, in return, agreed through close aides to receive 42.8 billion KRW worth of shares in Cheonhwa-dongin No. 1. If proven true, Lee would face charges of bribery following misconduct. The revelation that the Daejang-dong project profits ultimately ended up with him could mark the greatest crisis in his political career.
Lee Jae-myung, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly in Yeouido, Seoul on the 13th. Photo by Hyunmin Kim kimhyun81@
The prosecution plans to continue investigating to clarify this and pursue additional indictments, but legal circles largely predict it will not be easy. They must obtain supporting testimony from figures involved in the 42.8 billion KRW agreement, such as Kim Man-bae and Jeong Jin-sang, who have been reluctant to speak. The prosecution is expected to focus its investigative efforts on this allegation. A prosecution official emphasized, "Although many say it is difficult, the investigation team is currently conducting supplementary investigations to more closely understand the details." This suggests that the broad outline of the suspicion has been confirmed and they are now examining the details.
Looking at Jeong Jin-sang’s indictment... "At least 5 discussions on Daejang-dong shares"
The prosecution’s confidence can be somewhat inferred from the indictment of Jeong Jin-sang, former Political Coordination Officer in the Democratic Party leader’s office. Jeong was arrested and indicted last December on charges of receiving bribes from the Daejang-dong group. The prosecution stated in the indictment that Jeong was informed and approved the 42.8 billion KRW bribe agreement involving Lee by Yoo Dong-gyu, former Planning Director of Seongnam Urban Development Corporation, applying charges of bribery following misconduct.
According to Jeong’s indictment, the Daejang-dong group discussed the share ratios and distribution methods at least five times while planning and promoting the Daejang-dong urban development project in December 2014, February to April 2015, June 2015, and from October 2020 to February 2021. The prosecution wrote that multiple discussions took place especially between February and April 2015 before the final share ratio was decided. Kim Man-bae, major shareholder of Hwacheon Daeyu Asset Management, led these discussions, and Yoo conveyed the decisions to Jeong for approval.
The amount of 42.8 billion KRW also emerged during this process. In October 2020, Kim proposed to Yoo that he would give about 70 billion KRW in dividends, excluding taxes and public charges, corresponding to half of his 49% stake (24.5%). However, by February 2021, after deducting common costs that Yoo and Jeong had to bear and additional expenses such as advances Yoo had received, Kim revised the offer to 42.8 billion KRW. Yoo relayed this to Jeong, who accepted Kim’s proposal considering that Lee was preparing for the party’s presidential primary at the time.
Jung Jin-sang, former Chief of Political Coordination Office at the Democratic Party Representative Office Photo by Yonhap News
The shares were discussed multiple times over 7 to 8 years, and the prosecution believes Lee could not have been unaware of this process. Since Jeong, known as Lee’s right-hand man, was clearly informed, the prosecution’s view is that Lee must have been aware of this as well. A prosecution official emphasized, "The intention to share development profits was agreed upon, the distribution method was discussed, and the commitment regarding the 42.8 billion KRW shares was clear." However, whether the shares were used for Lee’s benefit has not yet been confirmed. There are mixed analyses that the prosecution has either not yet secured evidence or has secured it but not disclosed it.
Lee Jae-myung faces trial separately from Jeong Jin-sang... Prosecution pursues 'two-track' approach
The prosecution is expected to relentlessly pursue the 42.8 billion KRW bribe agreement allegation to definitively prove it. This is because it would be a decisive blow that could clarify Lee’s involvement in the Daejang-dong development corruption charges.
Going forward, the prosecution is expected to investigate and try this allegation on a 'two-track' basis. Lee will face trial separately from the Daejang-dong group and Jeong, focusing judicial scrutiny on his charges. The prosecution previously requested the court to consolidate Lee’s case with Jeong’s, but the court rejected this. The Seoul Central District Court assigned Lee’s case to Criminal Division 33 (Presiding Judge Kim Dong-hyun). Jeong and Kim Yong, former deputy director of the Democratic Research Institute, are being tried in Criminal Division 23 (Presiding Judge Jo Byung-gu). Yoo and Kim Man-bae’s cases are handled by Criminal Division 22 (Presiding Judge Lee Jun-cheol).
The court explained that, following consultations among the presiding judges, related cases were not assigned to the same division but were electronically assigned to the specialized anti-corruption criminal divisions. Although there are many overlapping issues and evidence records between the Daejang-dong group’s trial in Division 22 and Lee’s case, the fact that the trial has been ongoing for over a year made consolidation practically difficult.
Attention is also focused on the evidence the prosecution will present in court. The prosecution has repeatedly stated that, besides testimonies from specific individuals related to the 42.8 billion KRW agreement, it has comprehensively analyzed various physical evidence. When indicting Lee, the prosecution revealed that the related investigation records amount to over 500 volumes. It remains to be seen whether the prosecution holds a hidden card among these.
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