Prosecution Plans to Summon MOCIE Minister Lee

The prosecution’s investigations show a possibility that Korea National Railroad (KNR, currently Korea Railroad)’s investment in Russian oil fields might have been led by the government as a whole, rather than by a few KNR officials or politicians.

Upon this suspicion, the prosecution is currently expanding the range of its investigations to Cheong Wa Dae and other government ministries.

It was reported on May 12 that the Seoul District Prosecutor’s Office Special Investigation Department III (chief prosecutor: Hong Man-pyo) collected evidence that Kim Se-ho, the former deputy minister of construction and transportation and then director of KNR who was taken into custody on May 11, had pushed ahead with the investment project excessively in an effort to meet the schedule for President Roh Moo-hyun’s visit to Russia in September 2004.

“Relevant persons testified that Kim had pushed for the project to coincide with the schedule for the presidential visit to Russia,” said a prosecution official, “and verifying their testimonies will be our next task.”

The prosecution is focusing on whether the reasoning behind the former deputy construction minister’s linking the investment project to President Roh’s visit to Russia was based on his own independent judgment or on directions from Cheong Wa Dae or the ruling party.

In the arrest warrant issued for Kim on May 11, prosecutors explained that he had personally met with Lee Hee-bum, the minister of commerce, industry and energy (MOCIE) who had been preparing to accompany President Roh on his visit to Russia, in mid-September of last year. In this meeting, he is alleged to have asked Lee’s help for the investment project. Prosecutors are planning to serve a subpoena on Lee sooner or later for further investigations.

In particular, the prosecution reportedly secured some evidence that Kim Kyung-sik, an administrator at Cheong Wa Dae, had made a report on the investment project in Russian oil fields to some higher-ranking officials. He had been informed of the oil deal on August 31 of last year from Wang Young-yong, then head of the KNR project development division, who had been under orders from former Deputy Minister Kim and who is now under arrest.

According to a prosecution official, however, Kim Kyung-sik is said to be denying such an allegation.

The prosecution is also investigating whether politicians and government officials exerted any influence on Woori Bank’s decision to lend $6.5 million to the Korean Railroad Transport Promotion Foundation last September.

Jin-Young Hwang woogija@donga.com buddy@donga.com