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MB met with lawyer tied to DAS in 2009, sources say

Feb 22,2018
Former President Lee Myung-bak met multiple times in 2009 with a lawyer from a U.S. law firm that soon after represented a company linked to various corruption scandals, prosecution sources have told the JoongAng Ilbo.

The newspaper’s exclusive report said on Wednesday that, after taking office in 2008, Lee had multiple meetings early the next year at the Blue House with Kim Suk-han, a former partner of Akin Gump Strauss Hauer and Feld LLP.

Shortly after the meetings, Akin Gump, a U.S. international law firm and one of the most profitable lobbying firms in the United States, represented an auto-component manufacturer named DAS, which at the time was pursuing a lawsuit in a U.S. court. DAS is currently owned by the former president’s older brother, but some suspect that Lee is its actual owner.

The prosecution is currently investigating an allegation that the Lee Blue House pressured Samsung Group to pay DAS’s hefty legal bill with Akin Gump. The former vice chairman of Samsung, Lee Hak-soo, recently told the prosecution during questioning that the conglomerate did in fact pay a total of $3.7 million to Akin Gump on DAS’s behalf, in exchange for then President Lee’s special pardon of Samsung Chairman Lee Kun-hee.

DAS’s trouble began in 2000 when it invested 19 billion won ($17.7 million) in a venture by Lee’s former business partner, Kim Kyung-joon. Kim’s venture lost its license for financial fraud in 2001, but DAS got back only 5 billion won that year, and filed a suit in 2003 to collect the rest. But after years of little progress, DAS hired Akin Gump in 2009 and subsequently received the remaining 14 billion won in February 2011 through Kim’s personal bank account in Switzerland.

The prosecution secured evidence that during their Blue House meetings, then President Lee and Kim Suk-han discussed the deal regarding Samsung paying DAS’s legal fees. Until now, the former president had denied that he had anything to do with DAS’s lawsuit in the United States.

The Seoul Central District Prosecutors’ Office recently obtained a statement about the meetings from Kim Baek-jun, long-time aide to Lee who served as general affairs secretary in the Blue House. He reportedly told the prosecution that there were at least two meetings between Lee and Kim.

The prosecution suspects that the former president was directly involved in hiring Akin Gump for DAS. Prosecution sources said Lee contacted Samsung first in early 2009 and discussed the issue of hiring a better law firm.

Akin Gump has represented Samsung Electronics in the United States since 1998, and Samsung was informed of the president’s wish, sources said. Kim Suk-han had multiple meetings at the Blue House, sources also said, but no Samsung official joined.

After DAS hired Akin Gump in March 2009, Kim Baek-jun was put in charge of the retainer agreement.

The prosecution also discovered that Lee, Samsung and Akin Gump had a secret deal, sources said. Based on the agreement between Lee and Samsung, Samsung created a false agreement with Akin Gump to pay its consultancy fees. DAS was then to receive any leftover fees Samsung paid to Akin Gump, based on a verbal agreement.

Samsung formed a two-year contract with Akin Gump from 2009 to 2011 and paid its monthly consultancy fee. The prosecution believes that the contract totals $3.7 million.

The prosecution believes that Akin Gump was used by Samsung to pay DAS’s legal fees and give additional cash to Lee. It was not clear how much the lawsuit actually cost.

Based on the conclusion that the former president is the actual owner of DAS, the prosecution plans to summon him in early March for an investigation into a bribery charge.

The JoongAng Ilbo contacted Kim Suk-han multiple times to confirm whether the secret meetings at the Blue House took place, but he was not available for comment.

BY YOON HO-JIN, PARK SA-RA [ser.myoja@joongang.co.kr]