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PPP's Kwak acquitted on Daejang-dong bribery charges

Published: 08 Feb. 2023, 18:22 Updated: 08 Feb. 2023, 18:32

〈Kwak Sang-do, former People Power Party lawmaker, answers questions after the Seoul Central District Court acquitted a bribery allegation against him on Wednesday. [YONHAP]

Former People Power Party lawmaker Kwak Sang-do was acquitted on bribery charges related to the Daejang-dong development project, which involves Democratic Party (DP) Chair Lee Jae-myung.

It is the first court ruling on the apartment complex development project scandal, which emerged in late 2021 just ahead of the presidential election in which the DP chair was a candidate.

The Seoul Central District Court on Wednesday rejected allegations that the 5 billion won ($4 million) given by Daejang-dong developer Hwacheon Daeyu to Kwak’s son in March 2021 as a severance and performance bonus was bribery of the former lawmaker.

The court acknowledged that the 5 billion won paid to Kwan Byung-chae, the son, was excessive and beyond the normal payment range. It added that considering that the son is married and independent of his father, it is difficult to prove without a reasonable doubt that the payment made to the son is the same as giving it to the lawmaker himself in exchange for favors.

The former lawmaker was fined 8 million won for accepting 50 million won from Nam Wook, a lawyer central to the Daejang-dong case, while running for a National Assembly seat in April 2016 as an illegal political contribution. Nam, who is also on trial for the Daejang-dong scandal, was fined 4 million won.

Kwak, a lawyer and a civil affairs secretary to former President Park Geun-hye, has argued that the money was actually a fee he received from Nam for consulting services.

The court said the violation that Kwak committed for the political contribution was not light as he received a substantial amount in cash.

The prosecutors have asked the court for 15 years in prison as they saw the payment that was made to Kwak’s son as a bribe.

"I expected to be acquitted of some of the charges," Kwak said after the ruling, adding that he will appeal the ruling related to political contributions.

"If a person becomes a candidate, can't that person ask for the money that is owed?" Kim said rhetorically.

The prosecutors accused Kwak of using his influence to prevent the breakup of a consortium between Hana Bank and Hwacheon Daeyu at the behest of the owner of Hwacheon Daeyu and former journalist Kim Man-bae in February 2015.

Through the consortium, Hwacheon Daeyu, which only had 50 million won in capital and no track record, was able to land the 1.5-trillion won Daejang-dong development project from Seongnam city just a week after it was founded.

It has been reported that Kim Man-bae in a conversation recorded between him and another central figure of the Daejang-dong development scandal, accountant Chung Young-hak, complained on the demand by the former lawmaker Kwak to give him money through his son.

After the development scandal emerged, including allegations against Kwak, the lawmaker gave up his National Assembly seat in November.

Kwak is the first and only person among the so-called “5-billion-won club” to be indicted and tried.

There are seven reportedly in the club that received 5 billion won from Hwacheon Daeyu, including Kwon Soon-il, a former Supreme Court justice, and Park Young-soo, special counsel, who played a key role in imprisoning President Park.

The ruling comes just three days ahead of Lee’s second questioning by the prosecutors about the Daejang-dong case.

Hwacheon Daeyu, a company created by former MoneyToday journalist Kim Man-bae and seven Cheonhwa Dongin companies, pocketed 400 billion won despite having invested only around 350 million won in the development project.

Seongnam Development Corporation, which is owned by the city government, only pocketed 183 billion won despite its 25 billion won investment.

The prosecutors are also widening their investigations into other allegations against the DP chair. On Tuesday, the prosecutors raided 40 locations, including Seongnam City Hall, over another development project.

The investigation is related to the Baekhyeon-dong apartment development project in 2015, which also involved a person that worked at Lee’s campaign office when he was running for mayor.

Lee is accused of making major regulatory changes that favored private developers.

He is also currently being investigated about violating the Public Official Election Act regarding comments made about the Baekhyeon-dong development.

The DP leader was indicted in September last year on his claim made during the presidential race that he was forced by the Land Ministry to change the development codes to favor the private developers in the Baekhyeong-dong apartment complex development.

“I was threatened by the Ministry of Land, Infrastructure and Transport over dereliction of duty,” Lee said in 2021 to the National Assembly.

The Land Ministry denies the claim and said it told Seongnam city that the decisions on the changes are to be made by city government.

Other allegations against Lee include a corporate sponsorship of Seongnam football club and illegal money delivered to North Korea via a private company for an invitation to North Korea for political purposes.

The DP has accused the prosecutor of investigating the entire life of the DP chair.

“The intention to tie up DP Chair Lee Jae-myung in every which way by creating allegations is blatant,” said Park Seong-jun, a DP lawmaker, through a statement released on Tuesday.

BY LEE HO-JEONG [[email protected]]