Growing Suspicions Over Busan Lobby Scandal

On September 7, Busan prosecutors were focusing their investigation into a possible linkage between influence-peddling and an offer of political funds when they arrested Kim Sang –jin, the head of a Busan-based construction company, as well as the core figure of a lobbying scandal involving presidential aide Jeong Yun-jae.

According to the prosecution, Kim offered 20 million won in political funds to Jeong Yun-jae, then a presidential secretary, in March 2003. He admitted this fact right before he was arrested on August 24, but refused to confirm the fact in a statement.

Consequently, suspicions arose over why he suddenly changed his mind given he had never mentioned the involvement of the presidential aide until he was released on July 26, after he had been arrested on July 16.

Prosecutors believe that Kim felt he was cornered after the arrest of the former chief of the Busan Regional National Tax Service Chung Sang-gon on August 10, and tried to escape the crisis by highlighting his relationship with the presidential aide. With regard to this allegation, Kim insisted in an interview with SBS television that he only offered legitimate political donations and did not offer any bribes.

However, it is hard to buy that Kim’s “political donation” was not at all a bribe given that he had lobbied against a number of high –ranking officials. He offered 100 million won in bribes to Lee Wi-joon, the chief of the Yeonje district office, in June, and also provided another 100 million won bribe to the head of the Busan tax office to avoid an audit.

Prosecutors are now focusing on the fact that Kim received 4.42 billion won worth of loan guarantees from the Kibo Technology Fund (KTF) for the two months following his donation to Jeong.

The prosecutors’ office made it clear that political donation charges will be ruled out from the investigation since the statute of limitations has already passed. But it said the investigation will continue on the possible linkage between the loan guarantee and influence-peddling.

Since the bribe was largely made in cash, the prosecution is having difficulty tracing the money. However, with the detention of Kim, it is now pressing Kim to obtain evidence on those who were lobbied by him.

In an interview with SBS shortly before he was arrested again, Kim insisted that, “I gave more money (the 20 million won in political funds he offered to former aide Jeong) to a third party. I never complained even if he washed his hands after receiving the kickback.”

Some experts say that Kim is highly likely to cooperate with the prosecution over those who received bribe money, except for those he believe he should not mention. In that case, the investigation is likely to be further expanded. Some raised suspicions that Kim has connections in police circles.

Kim was confirmed to have had lunch with high-ranking police officers, including the chief of the Yeonje district office, in May. The Yeonje district police station investigated an assault case involving one of Kim’s executives at the end of last February. The attacked person filed a complaint over the police investigation into the matter, saying it was unfair, and the police were having an internal inquiry into the matter by the time of the meeting with Kim.

Concerning this allegation, the police officers explained that, “Since it was about four months ago, it is difficult to remember who led the meeting. We had never met Kim before, and he didn’t ask for favorable treatment over the case.”

Kim was arrested on July 16 and released on July 27 after a review of the legality of the detention. He voluntarily appeared before the prosecution on September 6.

Prosecutors believe that Kim may have removed evidence and contacted those who had received bribes for the last forty days after he was released.

Right after being released, Kim appeared in his office in Bugok-dong, Geumjeong-gu, Busan. Regarding this, prosecutors say he may have disposed of or hid critical material, like a secret account book.

He disappeared after severing contacts with anyone when his face was disclosed to the media due to the report by Dong-A Ilbo on September 3. Kim’s wife also disappeared with her six-year-old son in mid August from her house in Jinju, Gyeongsangnam-do. Prosecutors believe that Kim has been making contacts with people he gave bribe money to so that they can “fine-tune” their statements to give when questioned.

The allegation is backed by the fact that Kim only recently revealed Lee, the head of the Yeonje district office, received a bag with 100 million won in it from Kim, but gave it back later when he was summoned to the prosecution after an year of keeping it secret.