DP chief Lee's aide is indicted for taking bribes

A close ally of Democratic Party (DP) Chairman Lee Jae-myung was indicted Friday for allegedly taking bribes in a corruption scandal getting closer to implicating the DP leader.

Jeong Jin-sang, center, a vice chief of staff to Democratic Party Chairman Lee Jae-myung, arrives at the Seoul Central District Court on Nov. 18 to attend his warrant review. [YONHAP]

A close ally of Democratic Party (DP) Chairman Lee Jae-myung was indicted Friday for allegedly taking bribes in a corruption scandal getting closer to implicating the DP leader.

The Seoul Central District Prosecutors Office’s indictment of Jeong Jin-sang, a vice chief of staff to Lee, signals a widening of their investigation into the Daejang-dong development corruption case.

Jeong is accused of taking about 240 million won ($184,000) in seven installments between 2013 and 2020 from real estate developers including Yoo Dong-gyu, the former acting president of the Seongnam Development Corporation, in return for business favors in the project, which launched when Lee was mayor of Seongnam, Gyeonggi.

Jeong served as a senior policy secretary to Lee while he was Seongnam mayor and later Gyeonggi governor.

At the center of the scandal is the question of how Hwacheon Daeyu — a previously obscure asset management company — was able to rake in 57.7 billion won ($48.3 million) in profit from a 1 percent stake, or investment of 49.95 million won, in a 2015 real estate development project in the Daejang-dong area of Seongnam.

The company also collected 300 billion won from sales of apartments in the development, while its Cheonhwa Dongin affiliates reaped in an additional 400 billion won in revenue.

Prosecutors believe Jeong leaked inside information he obtained while working for the Seongnam and Gyeonggi governments to real estate developers.

Jeong is also suspected of aiding and abetting the destruction of evidence by telling Yoo to throw his mobile phone out the window when prosecutors were about to raid Yoo’s residence late last year.

Jeong has been under pre-trial detention since Nov. 18.

Another central question in the Daejang-dong corruption scandal is that of the true ownership of Hwacheon Daeyu and its Cheonhwa Dongin affiliates.

Jeong’s indictment followed a Nov. 20 claim by lawyer Nam Wook, another key figure in the case, that Cheonhwa Dongin No. 1 “belonged to” the Seongnam mayor’s office, then occupied by DP leader Lee, and that he heard this from Kim Man-bae, the owner of Hwacheon Daeyu.

Suspicions regarding the project’s profit structure have centered around the relationship between Lee and Kim, who as a journalist interviewed then-mayor Lee in 2014. Lee and Kim have both denied they have any kind of financial relationship.

While Kim himself has claimed he is the owner of Cheonhwa Dongin No. 1, others such as accountant Jeong Young-hak and Yoo have not only changed their testimonies and said that Lee has a secret stake in the company, but also said that they promised to pass on 42.8 billion won to Lee through his close acquaintances — including Jeong Jin-sang and Kim Yong, another aide to Lee.

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