BAI Excludes Rep. Lee Kwang-jae

Carrying out a probe into speculation over Korea Rail’s (formerly known as Korea National Railroad) oil investment business in Sakhalin, Russia, the Board of Audit and Inspection (BAI) requested the Public Prosecutor’s Office investigate six people related with the scandal on April 12. Those who are to be subject to investigation include four former senior KNR officials; Kim Se-ho, Vice Construction and Transportation minister; Shin Gwang-soon, vice head of the Korea National Railroad; Wang Young-yong, head of the KNR project development division; and Park Sang-jo, head of project development division at the Korea Railroad Research Institute.

Two businessmen -- Jeon Dae-wol, president of the real estate agency High-End Group, and Huh Moon-suk, chief representative of Korea Crude Oil (KCO) -- were also referred to the investigation.

The BAI said in an interim report on the “Inspection on KNR Oil Investigation Sakhalin” released that day that the KNR brought about loss at a national level by arbitrarily deciding to participate in the business without researching the legality or profitability of the project or a legitimate decision-making process within the organization.

The audit authority, however, did not refer Uri Party Rep. Lee Kwang-jae, who is suspected of being involved in the case. The BAI explained on April 11 that it failed to find any evidence that Rep. Lee was involved, although it conducted a three-hour investigation by calling him in to an unidentified place in Seoul.

Yoo Young-jin, the special investigation department chief of the BAI, said, “The KNR should go through deliberation by a policy deliberation committee within the organization if it is to engage in a new project. But it confirmed it would participate in the oil project with the approval of the vice head, ignoring due process.”

Yoo pointed out, “We decided to consider strong censure, such as dismissal, for Vice Minister Kim, who was then head of the KNR, and president Shin, who was then the vice head,” adding, “We will continue our inspection of lax management of the project development division at the Korea Railroad Research Institute and 17 KNR subsidiaries, and issues over the Woori Bank’s loan deliberation.”

Meanwhile, four senior deputy floor leaders in the opposition camp, including the Grand National Party, the Democratic Labor Party, the Millennium Democratic Party and the United Liberal Democrats, agreed in a meeting held in the morning that day to jointly submit a “special prosecutor bill for the oil project” intended to investigate into the speculation to the National Assembly on April 13.

As the ruling Uri Party’s position is “special prosecution is possible only if the current investigation turns out to be insufficient,” heated debate is predicted between the ruling and opposition camps over the submission and passage of the bill.