DP targets Lee aides over bank probe - INSIDE Korea JoongAng Daily

DP targets Lee aides over bank probe - INSIDE Korea JoongAng Daily
DP targets Lee aides over bank probe
May 31, 2011
Pressure on the Lee Myung-bak administration increased significantly yesterday as the main opposition party targeted key Lee aides, including the prime minister, to lay bare their involvement in the massive corruption scandal of troubled savings banks.

Following the arrest of Eun Jin-su, a former commissioner at the Board of Audit and Inspection and a key Lee ally, over his alleged abuse of power to influence the watchdog’s probe into the Busan Savings Bank Group, the Democrats demanded that more top officials be investigated and that President Lee apologize for his aides’ alleged corruption.

“President Lee must apologize for this comprehensive corruption package involving key members of the administration,” said Kim Jin-pyo, Democratic Party floor leader. “A National Assembly investigation must take place as soon as possible in order to lay bare this dark symbiotic relationship involving the Blue House.”

The ruling Grand National and opposition Democratic parties agreed yesterday that a National Assembly investigation will take place in June.

While calling Eun just the tip of the iceberg, the Democrats pressured Prime Minister Kim Hwang-sik, who used to be head of the Board of Audit and Inspection, to speak in detail about what had happened when the watchdog, under his leadership, carried out probes into the savings banks.

Chung Jin-suk, senior presidential secretary for political affairs, and Kwon Jae-jin, senior presidential secretary for civil affairs, were also named as the targets of the banks’ lobbying activities.

The DP also created an in-house investigation committee yesterday and named former floor leader Park Jie-won as its head.

Massive corruption scandals involving Busan Savings Bank and Samhwa Mutual Savings Bank have been investigated by prosecutors. Busan Savings Bank executives have been indicted for financial crimes involving nearly 7.7 trillion won ($7 billion), and Samhwa Mutual Savings Bank executives were prosecuted on charges of making 200 billion won in illegal loans.

The prosecutors are now checking into allegations that the banks had lobbied top government officials and politicians to stop their businesses from being forcibly shut down. The two banks’ operations were suspended earlier this year, but suspicions grew that the decision to shut them down was deliberately slowed down.

DP lawmakers on the National Assembly’s legislative and judiciary committee issued a statement yesterday and pressured Prime Minister Kim to elaborate on his earlier remarks.

“Before the Assembly [in February], Kim testified that he had received pressure from everywhere while investigating problems involving savings banks when he was head of the Board of Audit and Inspection,” the statement said. “The time has come for Kim to say where the pressures came from. He should also make public how the pressure influenced the audit.”

The DP’s spokesman, Lee Yong-sup, also pressured Kim.

“The prime minister was the head of the audit board, and he is the second-highest ranking public servant after the president,” Lee said. “It may be a burden for him, but he must lay bare the truth to end the crisis and lessen people’s sufferings.”

After 14 hours of interrogation, the Supreme Public Prosecutors’ Office made an emergency arrest of Eun early yesterday on charges of receiving bribes from the now-suspended Busan Savings Bank. The prosecutors yesterday applied for a warrant to detain Eun for further questioning.

Lee also said allegations have grown that Park Jong-rok, a Busan Savings Bank legal adviser, had asked Kwon, senior Blue House civil affairs secretary, to protect the bank from shutting down. Park and Kwon both passed the bar exam in 1978.

Prosecutors confirmed that Park, a 59-year-old lawyer and former prosecutor, had contacted Yun Yeo-seong, a key lobbyist for the bank, and telephoned Kwon.

“I received a phone call, but I flatly turned him down,” Kwon said. “How can it be a problem when the civil affairs office actually ordered the probe to proceed under the proper protocol, rather than having intervened in it?”

The DP lawmakers also told reporters that financial authorities were suspected of having forced Busan Savings Bank to take over Samhwa, fueling its financial troubles. They demanded to know what role Chung played in this accusation, claiming that the presidential aide had an inappropriate connection with Shin Sam-gil, Samhwa honorary chairman.

Chung worked as one of the Samhwa’s outside directors and an audit board member for four years from 2004 to 2008. The bank’s operations were suspended in January, and Woori Financial Group took over the ailing Samhwa in March. The Blue House yesterday firmly denied allegations that presidential aides were lobbied to protect the troubled banks.


By Ser Myo-ja [myoja@joongang.co.kr]