Mayor’s friend, Lee Bong-woo, arrested in Busan-gate probe

In an ongoing probe into the Busan-gate scandal, in which indicted CEO of Cheongan Construction Lee Young-bok is suspected to have lobbied public officials with embezzled funds, prosecutors on Wednesday arrested another official with ties to the Busan city government - a friend of former Busan Mayor Hur Nam-sik.

The arrested man, Lee Woo-bong, CEO of BN Chemical based in Busan, is accused of receiving tens of millions of won from Lee Young-bok.

His ties to the former Busan mayor date back to their high school days, as the two attended the same school.

“I gave tens of millions of won to a confidant of Hur just before the local election began in 2010,” Lee, the indicted developer, reportedly told prosecutors. “As far as I know, that money flowed into Hur’s campaign.”

Prosecutors suspect Lee Woo-bong received the money from Lee Young-bok for helping him lobby public officials in the Busan city government.

Authorities raided Lee Woo-bong’s house and office on Wednesday and are investigating whether the money flowed from Lee Woo-bong to Hur, and what role Lee played in Lee Young-bok’s lavish construction project.

Lee Young-bok was indicted for allegedly embezzling 70.5 billion won ($58.3 million) in construction funds and violating the Housing Act.

Though he was suspected of lobbying public officials, prosecutors at the time of his indictment failed to secure evidence of this.

The fact that the Busan city government violated regulations that forbid buildings near the coast to be built higher than 60 meters (196 feet) for Lee’s Haeundae Beach development, and that it changed the purpose of the land from a tourism space to a residential one just for Lee’s development, stirred suspicion that he may have lobbied officials in the city government.

The government also skipped a mandatory environmental test on Lee’s development.

Hur was the mayor of Busan from 2004 to 2014. Lee’s lavish ongoing construction project began in 2007 when the Busan Metropolitan Corporation, run by the Busan city government, selected Lee as the private developer to take charge of the project.

Lee Woo-bong was a campaign manager for Hur in 2010, for the local election in June that year.

Prosecutors on Wednesday also summoned Saenuri Party Rep. Bae Duk-kwang to appear before prosecutors today to answer to allegations that he received bribes from Lee Young-bok. Last week, a confidant of Busan Mayor Suh Byung-soo was also arrested for his alleged acceptance of bribes from Lee Young-bok.

BY ESTHER CHUNG, LEE EUN-JI [chung.juhee@joongang.co.kr]