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[Editorial] Stop beating around bush

Defendant in Daejang-dong scandal trial effectively shifts blame to Lee

The trial began Monday for the five defendants implicated in the Daejang-dong land development scandal.

The scandal involves four of the defendants getting astronomical rates of return on their investments in a project to develop land for housing in Daejang-dong, Seongnam, Gyeonggi Province in the 2010s.

A lawyer for Kim Man-bae, one of the defendants, reportedly argued in the first hearing that (Kim) followed policies taken by then Seongnam Mayor Lee Jae-myung for a stable execution of the project. Lee is the presidential candidate of the ruling Democratic Party of Korea.

Kim’s lawyer said that “seven poisonous clauses” constitute the basic structure of the project and that they merely reflect the guidelines and plans established by the Seongnam government based on its policy direction at that time.

Kim’s lawyer hit back at the breach of trust charge filed against Kim for causing damage to the corporation. This can be taken as an argument that if Lee could not be indicted for breach of trust, Kim could not, either, because he followed Lee’s direction. Kim’s lawyer effectively shifted responsibility to the Seongnam city government and Lee.

The DP’s election committee disputed the reports of the hearing. It argued that policies taken by Lee mean official policies by the Seongnam municipal government. But this is merely wordplay. Lee said from his own mouth that he designed the Daejang-dong project directly. So, Seongnam’s position does not differ from Lee’s. The fact that it is the city’s official position does not necessarily mean that its mayor can be relieved of responsibility. Lee approved about 10 different documents on the project.

The prosecution says that the defendants colluded with Yoo Dong-gyu, then chief of Seongnam Development Corp.’s planning headquarters, to insert “seven poisonous clauses” in the guidelines on the request for bids. The clauses allow private partners of the public-private project to take earnings in excess of the corporation’s predetermined fixed profits, while barring the corporation from sharing excess earnings.

As a consequence, the corporation, a public entity fully owned by the Seongnam municipal government, suffered a loss of at least 65.1 billion won according to the prosecution‘s estimation, while private partners who are defendants could reap enormous profits amounting to hundreds of billion won from developing land for housing and selling new apartments on the land.

Officials of the corporation’s development headquarters are said to have demanded several times that the request for bids must have clauses that allow the corporation to share excess profits with private partners. But the demands were rejected.

Earlier, Kim had said that he merely followed “his” policies on the project, without disclosing his name. Many people assume that the person whom he said followed and he also addressed with an honorific may be the Seongnam mayor at that time. And the argument by Kim’s lawyer strengthens credibility of that assumption.

But the prosecution has been passive in digging into suspicions involving those above the defendants. It seems that it is intent on wrapping up the case with the five suspects indicted.

The prosecution is still in talk with Chung Jin-sang, one of Lee’s closest aides and currently deputy chief of staff in the Democratic Party election campaign committee, over when he can answer summons for questioning. It summoned him twice in December but he disobeyed. He was expected to be summoned last Saturday, but it fell through, too.

Chung was charged with abuse of authority and coercion. In 2015 as chief policy adviser to Seongnam Mayor Lee, Chung was allegedly involved in pressing Hwang Moo-seong, then chief executive of the corporation, to resign. After Hwang quit, Yoo became acting chief executive then the project proceeded under the scheme of the seven clauses. Chung is also suspected of trying to destroy evidence. He is said to have talked with Yoo over mobile phone on eight occasions before Yoo’s residence was searched in September last year.

The prosecution must stop beating around the bush and start probing those above the defendants.

By Korea Herald (khnews@heraldcorp.com)
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