A day of raids as prosecutors close on Lee confidant

A close friend of President Lee Myung-bak was dragged into the influence-peddling scandal involving Busan businessman Park Yeon-cha yesterday when prosecutors raided the home and offices of Chun Shin-il, chairman of Sejoong Namo Tour.

Some 20 prosecutors and investigators searched Chun’s home in Seongbuk-dong, northern Seoul, and his downtown office yesterday morning.

The offices of Sejoong Namo Tour’s affiliate Sesung Air Service were also searched. Computer hard disks, data on stock trading, accounting books plus Chun’s personal financial records and e-mails were seized, prosecutors said.

Later in the day, raids were carried out in 15 homes and offices. Prosecutors sought the financial records of around a dozen people connected to Chun through financial dealings.

The Supreme Public Prosecutors’ Office has been investigating an allegation that Park, chairman of Taekwang Industrial, attempted to influence a tax probe on his companies last year. The National Tax Service has looked into Park’s businesses. The prosecution indicted Park on charges of tax evasion and bribery at the end of last year.

Chun, a Korea University alumnus and a close friend of President Lee, maintains a close relationship with Park.

Chun is accused of lobbying the country’s tax officials to ease an investigation on Park’s company. Prosecutors suspect the head of Sejoong Namo Tour received money from Park, but he has denied the allegations. Nonetheless, Chun has been barred from leaving the country since March.

Meanwhile, a prosecution source said the raid on the Seoul Regional Tax office on Wednesday secured information that the tax office omitted when it submitted the case to the prosecution last November.

According to the source, the new information has revealed that Park gave about 900 million won ($712,800) to Chun one month before the presidential election in 2007.

“We need to investigate whether the money was a legitimate business transaction or used as illegal political funds or for lobbying activities,” the source from the prosecution’s central investigation unit said.

The source added that the tax agency had not handed over all records pertaining to financial matters between Park and Chun. The central investigation unit has questioned Cho Hong-hee, a senior tax official heading the tax probe on Park’s companies, and three other tax officials about the omissions.

The source also claims that prosecutors have obtained enough circumstantial evidence from a business log kept by a senior tax official to prove Park tried to influence the tax probe on more than one occasion, the source said.

The data obtained through the raid suggests Park provided hundreds of million of won to former President Roh Moo-hyun. “This is new evidence that was not revealed through our earlier investigation,” the official said.

In addition to the money dealings between Park and Chun, prosecutors are also looking into an allegation that Chun attended a strategy session in July last year aimed at saving Park’s businesses.

In addition to Chun and Park, Kim Jung-bok, an in-law of Park who is the former head of the Jungbu Regional Tax Office, and Lee Jong-chan, former Blue House civil affairs secretary, were suspected of attending.

However, Chun denies the allegation, saying he has never met Lee and Park together. He admitted to meeting with Kim and Park, but denies they discussed the tax investigation.

The close friend of President Lee has also been accused of providing huge sums of unlawful political funds to Lee on the eve of the presidential election.

The major opposition Democratic Party is urging the prosecution to look further into the allegation that Chun sold stocks to raise 30.6 billion won in 2007, of which 3 billion won went to the Grand National Party on behalf of Lee to cover his party membership fee. Chun said he gave some favors to Lee in lending him the money. Calling it a legitimate loan, Chun said Lee even paid interest.

Hong Man-pyo, a senior prosecutor in charge of the Park case, said all allegations involving Chun will be investigated, but not the suspicions linked to the presidential election funds.

“This investigation began from Park, so we will look at what’s linked to him,” Hong said.

The Blue House made no official comment on the prosecution’s investigation of the president’s friend as of press time yesterday.

“We believe prosecutors will have a fair and thorough investigation,” a senior Blue House official said.

By Ser Myo-ja, Kim Seung-hyun [myoja@joongang.co.kr]