DP chief Lee Jae-myung indicted for masterminding illegal payments to North Korea

Politics

Published: 12 Jun. 2024, 16:29

DP chief Lee Jae-myung indicted for masterminding illegal payments to North Korea

Democratic Party (DP) leader Lee Jae-myung, left, and DP floor leader Park Chan-dae attend a meeting of the party's Supreme Council at the National Assembly in Yeouido, western Seoul, on Wednesday. [YONHAP]

Prosecutors on Wednesday filed an indictment against Democratic Party (DP) leader Lee Jae-myung, accusing him of being the mastermind and primary beneficiary of illegal payments by a South Korean underwear maker to North Korea.

In their indictment, prosecutors charged Lee, who served as Gyeonggi governor from 2018 to 2021, with third-party bribery and violating the Foreign Exchange Transactions Act by asking Ssangbangwool Group to pay a total of $8 million to North Korea via Lee Hwa-young, Gyeonggi’s vice governor at the time, between 2019 and 2020.

Under Article 130 of the criminal code, a public official can be charged with being party to bribery despite not directly receiving a bribe if they “cause, demand or promise” a bribe to another party after “accepting an unjust solicitation in connection with their duties.”

Lee Hwa-young has already been convicted of bribery and colluding with Ssangbangwool in delivering illegal payments to the North, thus also violating laws governing foreign exchange transactions and political funding.

The Suwon District Court handed him a nine-and-a-half-year prison sentence on Friday, which he said he intends to appeal.

According to the Suwon District Prosecutors’ Office, which is handling the case, $5 million was earmarked for Gyeonggi’s agricultural assistance project in the North, but the rest was intended to curry favor with Pyongyang to pave the way for a potential visit by Lee Jae-myung.

In its ruling on Friday, the Suwon District Court accepted the prosecution’s arguments that approximately $3 million that was delivered to the North constituted illegal overseas payments.

Overseas foreign currency payments that exceed $10,000 must be reported to customs under the Foreign Exchange Transactions Act.

While questions remain as to why Lee Jae-myung would seek to arrange a visit to Pyongyang, he was notably not included in former President Moon Jae-in’s delegation to Pyongyang in September 2018, which was comprised of other DP bigwigs.

Kim Seong-tae, the former chairman of Ssangbangwool Group, has also been indicted by prosecutors on suspicion of embezzling from five of Ssangbangwool’s unlisted subsidiaries and violating the foreign exchange transactions law by handing money to the North.

The money was allegedly carried in suitcases by Ssangbangwool employees to China, where prosecutors claim it was delivered to North Korean agents in meetings where Kim and Lee Hwa-young were present.

The prosecution believes Lee Hwa-young accepted illegal payments from Ssangbangwool Group on Lee Jae-myung’s behalf in return for guaranteeing the company’s involvement in potential inter-Korean enterprises by the Gyeonggi provincial government.

The former deputy governor initially denied Lee Jae-myung’s involvement in the case but later admitted to keeping him informed about Ssangbangwool’s payments to the North.

Ahn Bu-soo, who formerly served as chairman of the Asia-Pacific Exchange Association, was sentenced to three years and six months' imprisonment in May last year for acting as another middleman between the Gyeonggi provincial government, Ssangbangwool Group and North Korean officials.

In its judgment against Ahn, the Suwon District Court accepted the prosecution’s argument that the money delivered to North Korean agents was used to lobby the regime to win future projects, including the potential opening of a famous Pyongyang restaurant, Okryukwan, in Gyeonggi.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]