Photo: Signage for Hwacheondaeyu Asset Management. Credit: the Blue Roof.
Democratic frontrunner Lee Jae-myung 이재명 faced allegations of abusing his authority for a lucrative real estate development project, which boomeranged to conservatives.
The allegations are based on the 2014 development of Daejang-dong 대장동 area in Seongnam, a wealthy suburb to Seoul’s southwest of which Lee was the mayor at the time. The project was a public-private partnership that built 5.9k new homes and supporting facilities. The city of Seongnam made a profit of KRW 550b (USD 466m); a company called Hwacheondaeyu Asset Management 화천대유 자산관리, the partner in the project, made KRW 400b (USD 339m). Lee Jae-myung allegedly abused his mayoral authority to greenlight the development, and received kickbacks through Hwacheondaeyu.
However, the allegation was quickly muddied as further investigation into Hwacheondaeyu showed the company’s numerous connections to conservative politicians. Former Assembly Member Won Yu-cheol 원유철 전 국회의원 drew a salary from the company as an advisor, and the son of Assembly Member Gwak Sang-do 곽상도 worked at the real estate development company for six years immediately after graduating from art school. In addition, a board member of Hwacheondaeyu purchased the house owned by the father of conservative presidential candidate Yun Seok-yeol 윤석열.
Upon leaving the company, Gwak’s son received an outrageously large severance package of KRW 5b (USD 4.2m), strongly suggesting a kickback from the company. Gwak quit the People Power Party 국민의힘 as the news broke. The PPP Chairman Lee Jun-seok 이준석 국민의힘대표 called for Gwak to resign from his legislator position.