Appointment of president’s former lawyer as financial regulator stirs favoritism debate

Allowing the perception that the president’s legal team is monopolizing top positions undermines the fairness and common sense he has emphasized.

New Financial Supervisory Service Gov. Lee Chan-jin walks to the podium to deliver his inaugural address during the inauguration ceremony at the FSS headquarters in Yeouido, western Seoul, on Aug. 14. [YONHAP]

Lee Chan-jin, who took office as governor of the Financial Supervisory Service (FSS) on Aug. 14, previously served as President Lee Jae Myung’s defense attorney in his public election law violation case and in the trial over allegations that underwear maker SBW Group sent funds to North Korea. A classmate of the president from the 18th class of the Judicial Research and Training Institute, they have been close friends for decades, assisting the president in various legal disputes since he served as Seongnam mayor.

In 2019, it emerged that Lee Chan-jin had lent 5 billion won ($3.6 million) to the president, then governor of Gyeonggi, prompting political controversy over how the funds were used. Their relationship is known to be close enough that there are few secrets between them. While a president’s personal ties should not be an obstacle if the nominee has relevant expertise, questions remain about whether Lee Chan-jin is qualified for the position.

The new FSS chief has held senior roles in progressive groups such as the People’s Solidarity for Participatory Democracy and Lawyers for a Democratic Society, but has no direct experience in financial institutions or financial supervision. The government argues that his tenure as a member of the National Pension Fund Management Committee and his work on capital market accounting-related litigation show sufficient expertise. Yet doubts persist about whether that background is enough to handle core FSS responsibilities, including investigating unfair trading and overseeing accounting compliance in capital markets.

The opposition has criticized the appointment as political payback. Lee Chan-jin is the seventh member of the president’s defense team to be appointed to a key government post. Others include Law Revision Office Chief Cho Won-cheol, National Intelligence Service Planning and Coordination Office Director Kim Hee-su, Justice Ministry Policy Adviser Cho Sang-ho, Presidential Office Senior Secretary for Civil Affairs Lee Tae-hyung, Legal Affairs Secretary Lee Jang-hyung and Public Service Discipline Secretary Jeon Chi-hyung.

Some observers suggest the president may intend to use the FSS as an investigative arm, similar to former President Yoon Suk Yeol’s appointment of prosecutor-turned FSS chief Lee Bok-hyun. During his tenure, Lee Bok-hyun, also a financial outsider, drew strong backlash from the Democratic Party (DP) over remarks and directives seen as targeting the party. This fuels concerns that the new governor could focus on politically charged matters.

Lee Chan-jin should act with caution to avoid unnecessary political controversy. The president should also recognize public unease over the steady elevation of his former defense lawyers into senior government roles. During last year’s general election, several attorneys who had represented him made significant gains in the DP's nomination race, sparking accusations of “nomination in exchange for legal fees.” Appointing close associates is understandable, but allowing the perception that the president’s legal team is monopolizing top positions undermines the fairness and common sense he has emphasized.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.