Noose tightens around Lee Jae-myung as key ally spills

A close ally of Democratic Party (DP) leader Lee Jae-myung told investigators that Lee was aware that the former chairman of an underwear company had made payments to North Korea on his behalf, according to state prosecution officials.

Lee Hwa-young, former deputy governor of Gyeonggi, attends his arrest warrant review at the Suwon District Court on Sept. 28. [YONHAP]

A close ally of Democratic Party (DP) leader Lee Jae-myung told investigators that Lee was aware that the former chairman of an underwear company had made payments to North Korea on his behalf, according to state prosecution officials.

Lee Hwa-young, who served as Lee Jae-myung’s deputy during his helm as Gyeonggi governor, recently said under investigation that he verbally told Lee that the chairman of the Ssangbangwool (SBW) group had paid North Korean officials in return for arranging Lee’s visit to the North.

The former deputy governor had previously denied acting as a liaison between Lee Jae-myung and Kim Seong-tae, the former chairman of the SBW group, who told prosecutors earlier that he gave $8 million in total to North Korean officials he met in China.

Kim said $3 million was payment for Pyongyang’s agreement to allow Lee Jae-myung to visit the North, and that he confirmed the deal in a phone call with Lee that was arranged by Lee Hwa-young during a January 2019 meeting with North Korean officials in China, where both the SBW group chairman and the deputy governor were present.

Kim has already been indicted on charges of embezzling 63.5 billion won ($50 million) from his company and violating international sanctions as well as the Foreign Exchange Transactions Act by making the payments to the North.

According to prosecution officials, Kim told investigators that he wanted to “get on Lee Jae-myung’s good side” by delivering payments to North Korea on his behalf and that Lee Hwa-young told him that the Gyeonggi government would assist him with money from the province’s inter-Korean exchange and cooperation fund.

Lee Hwa-young’s recent confession tightens the prosecution’s noose around the DP chairman.

According to a senior prosecutor who spoke on condition of anonymity to the JoongAng Ilbo, Lee can be charged with committing bribery if he was aware that an individual made an illegal payment on his behalf, even if he never met the person in question.

Lee Hwa-young’s testimony contradicts Lee Jae-myung’s earlier claims that he never spoke to Kim and that he wasn’t aware that payments had been made on his behalf to the North.

Kim was extradited from Thailand to South Korea on Jan. 17, having been on the run since the end of May last year.

Speaking on condition of anonymity to the JoongAng Ilbo, prosecutors said that SBW employees told them the former chairman gave North Korean leader Kim Jong-un a saddle made by luxury brand Hermès in late 2019 to clinch business deals with the North.

SBW executives were said to have handed over the gift to North Korean officials in China in November 2019, along with millions of dollars embezzled from the company’s coffers that were smuggled out of South Korea in their luggage.

The gift and cash was allegedly handed to officials from Pyongyang’s state-controlled Asia-Pacific Peace Committee, which is in charge of inter-Korean exchanges.

In his comments to reporters after a DP supreme council meeting in Andong, North Gyeongsang on Thursday, Lee Jae-myung appeared to blame prosecutorial bias for the latest allegations regarding his awareness of the payments to the North.

“I thought prosecutors are supposed to be running an investigation, not engaging in politics,” he quipped.

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