Questions remain over residence relocation

The arrests of former presidential Chief of Staff Kim Dae-ki and former presidential secretary for general affairs Yoon Jae-soon on May 22 have placed the relocation of former President Yoon Suk Yeol’s official residence back under the spotlight.

Investigators allege that about 2.8 billion won ($2 million) from the Ministry of the Interior and Safety was diverted to cover construction costs for the residence project. The funds were allegedly used to pay 21gram, the contractor that carried out renovation work at the compound.

The project began in March 2022, shortly after Yoon won the presidential election. Converting the foreign minister’s official residence in Hannam-dong into a presidential compound required extensive remodeling and structural reinforcement. Given the security requirements of a presidential residence, the work should have been awarded through established procedures to a contractor capable of handling such a project. That was why the Government Complex Management Office initially planned to hire a general construction company.

The controversy began when the presidential transition team intervened and replaced the original contractor with 21gram.

At the time, 21gram was a small interior-design company that reported operating profit of just 150 million won in 2021. It held a license for interior construction work but was not qualified to carry out major structural renovations or expansion projects. Its selection immediately raised questions because of its ties to former first lady Kim Keon Hee. The company’s chief executive was Kim’s graduate school classmate and had supported exhibitions organized by her company, Covana Contents.

Kim Oh-jin, the former first vice minister of land, infrastructure and transport who was involved in the relocation project, later told investigators that Rep. Yoon Han-hong, a close ally of the former president, had referred to 21gram as “the company chosen by the first lady.” The handling of the project drew further scrutiny as costs escalated.

The government initially budgeted about 1.4 billion won for the work, but 21gram later submitted an estimate exceeding 4.1 billion won without detailed design drawings. The presidential office signed the contract and later approved payment without conducting a formal completion inspection.

Interior Ministry officials reportedly objected to the arrangement. Some were said to have protested so strongly that they stated they would rather face personnel action than approve the budget transfer. Nevertheless, the objections were brushed aside, and investigators allege the funding shortfall was covered with ministry reserve funds rather than through the ordinary budget process.

The Board of Audit and Inspection under the Yoon administration later concluded that procedural flaws existed but found no evidence of preferential treatment. The finding did little to settle questions surrounding the project.

Former presidential Chief of Staff Chung Jin-suk defended Kim Keon Hee during a parliamentary hearing, arguing that it was inappropriate to conclude she had recommended the contractor. Former President Yoon later vetoed a special counsel bill that included provisions to investigate the relocation, further fueling public suspicion.

The investigation now underway is expected to determine whether public funds were improperly redirected, whether personal ties influenced the contractor selection process and whether senior officials were involved in decisions that bypassed normal procedures.

Those findings will matter beyond the fate of the individuals under investigation. The relocation of the presidential residence was one of the first major decisions of the Yoon administration. How the contractor was chosen, how project costs nearly tripled and why standard safeguards failed remain questions that warrant clear answers.