At the end of 2022, the main opposition Democratic Party (DP) leader Lee Jae-myung was summoned for questioning by prosecutors in Suwon regarding a controversy in Seongnam, a city in Gyeonggi province. Lee served as the mayor of Seongnam from 2010 to 2018.
The Suwon District Prosecutors’ Office has accused Lee of receiving millions of dollars from major organizations, like Doosan Engineering & Construction Co., in the form of corporate sponsorships to the Seongnam Football Club (FC). In exchange for these donations, prosecutors allege that Lee used his authority as mayor to provide business benefits and favorable treatment to these organizations. Part of the allegations assert that a plot of land in Bundang owned by Doosan was rezoned by Lee in exchange for 5 billion won’s ($4 million) worth of corporate sponsorship payments made to Seongnam FC. Doosan used the land to build a commercial development. Lee has maintained that this zoning change was not tied to any corporate sponsorships to Seongnam FC.
Lee has stressed his innocence and expressed anger at what he regards as an attempt by President Yoon Suk-yeol and his administration to “destroy the opposition party and eliminate political opponents.” In the 2022 presidential election, Lee was the DP candidate running against Yoon, a former prosecutor who was backed by the People Power Party (PPP). Lee was defeated by 0.7 percentage points, the narrowest margin ever seen in a South Korean presidential election. The DP has also accused Yoon of using politically-motivated investigations as a tool to suppress political opponents and consolidate power within the hands of former prosecutors.
In his first-ever appearance at the prosecutor’s office as a criminal suspect, Lee went in for questioning on January 10. Prosecutors were investigating two main questions: whether the payments made to Seongnam FC can be considered legitimate corporate sponsorship, and whether any of the money sent to Seongnam FC ended up in Lee’s pocket. Lee denied these allegations and argued that the corporate sponsorship contracts underwriting the payments were legal and appropriate.
On January 29, Lee was summoned again, this time by the Seoul Central District Prosecutors Office, for questioning regarding a different case involving a property development project conducted during his tenure as Seongnam mayor. At the center of the scandal is Hwacheon Daeyu, a small private asset management company that was able to secure a major 1.5 trillion won ($1.2 billion) private development project in Daejang-dong, a district in Seongnam, only a week after its founding in 2015.
The prosecution alleges that Lee had a hidden financial stake in the project. They accused him of holding the largest number of shares in Hwacheon Daeyu and using the massive profits generated from the project to create an illegal political slush fund.
Lee has denied these allegations and any involvement or collaboration with private developers in this project. According to Lee, the public stake in the same project earned Seongnam nearly 550 billion won ($446 million) – more than the city had ever claimed in a public-private partnership.
Outrage from the DP is mounting after prosecutors summoned Lee for a second round of questioning regarding the Daejang-dong property scandal. The prosecution plans to seek a preliminary warrant for Lee’s arrest by next month at the earliest. As Lee is a lawmaker, the prosecution’s preliminary arrest warrant would need to pass in a plenary session at the National Assembly – which is unlikely, as the DP holds 169 out of 300 seats.
As investigations into Lee have been ongoing since late 2021, even before the presidential election. Democratic Party members and supporters have urged the prosecution to investigate such cases fairly, pointing to its ponderous investigations over Yoon’s wife Kim Keon-hee for allegations of stock manipulation, forgery of her academic and career background, and plagiarism of her thesis. Due to the prosecution’s selective investigations, the DP is considering working on a bill to appoint a special prosecutor to thoroughly investigate allegations against Kim, according to media reports.
While the DP is denouncing the Yoon administration and its alleged weaponization of the country’s prosecution office to repress the opposition, Lee stated that he will appear at the prosecutors’ office again in the coming weeks. “Even though it isn’t right, I will go as this is the price you pay for losing the presidential election,” Lee told reporters. He told the prosecution not to write fiction in a bid to get him arrested.