



By Lee Kyung-min



The prosecution secured key incriminating statements from a close aide to former President Lee Myung-bak, boosting the momentum of its months-long investigation into DAS, a company through which many believe Lee managed at least tens of billions of won in slush funds, Tuesday. The Seoul Central District Prosecutors' Office said Cheonggye Foundation secretary general Lee Byeong-mo's admission of managing personal assets, including land in Dogok-dong, southern Seoul, that former President Lee allegedly kept under borrowed names, is a key piece of evidence that could clarify who actually owned DAS. The aide said a considerable portion of over 26.3 billion won ($24.5 million) in proceeds secured after selling the land was funneled into DAS, substantiating the prosecutors' supposition that Lee, the alleged owner of DAS, used company funds to manage tens of billions of won in slush funds. Part of the illicit funds was used as seed money for DAS with investment consulting firm BBK, the owner of which fled to the U.S. with 38 billion won in embezzled company funds after defrauding 100 billion won out of 5,500 investors in 2001.



Meanwhile, prosecutors are likely to charge Lee Myung-bak with bribery, following a written statement from former Samsung Group Vice Chairman Lee Hak-soo who recently confessed the firm under his leadership paid $3.7 million (4.5 billion won) as a retainer to a U.S. firm, Akin Gump, of which Samsung was a major client. The legal fees that helped Lee Myung-bak recover 14 billion won in what could have been a failed investment were in return for a presidential pardon for group chairman Lee Kun-hee on Dec. 31, 2009, granted four months after he was sentenced to three years in prison, suspended for five years for embezzlement and for managing a slush fund, the former vice chair said.

While the pardon was given so the then-International Olympic Committee chairman could play a vital role in hosting the 2018 PyeongChang Winter Olympics, it raised a lot of criticism as he was the only one granted a pardon at the time.



DAS recovered its 14 billion won two years after hiring the U.S. law firm, unlike most investors that filed a civil suit against BBK and its head Kim Kyung-jun. Given DAS was the only firm Kim paid back through his Swiss bank account, prosecutors earlier believed Lee's recovery was a result of abusing the presidential office by mobilizing multiple government agencies including the National Tax Service and the Ministry of Foreign Affairs. Further investigation, though, uncovered the involvement of Samsung.



Lee is likely to face bribery charges, the burden of proof of which is much easier for the prosecution than it is for third-party bribery. Lee can be convicted of bribery if the prosecution proves he received something in exchange for exerting influence in his official capacity. Third-party bribery, however, requires there be an "illicit favor sought" in return for receiving bribes, based on which Samsung Vice Chairman Lee Jae-yong was released on appeal. Early this month, the Seoul High Court overturned a lower court ruling that sentenced him to five years in prison by saying there was no "illicit favor sought" by the younger Lee from former President Park Geun-hye in return for financial support for Chung Yoo-ra, the daughter of Choi Soon-sil, the central figure in the influence-peddling scandal. Choi was sentenced to 20 years in prison last week. Park, who faces most of the charges Choi faced, could be sentenced as early as late March if she is convicted.

