South Korea's cabinet Wednesday approved a bill setting up a fraud inquiry into president-elect Lee Myung-Bak, one week after the conservative opposition candidate won a landslide election victory.
The special prosecutor who will lead the investigation is due to report just days before the February 25 inauguration, casting a cloud over Lee's transition. Lee will be the country's first president-elect to face a criminal investigation.
Incumbent President Roh Moo-Hyun, who chaired the cabinet, did not veto the bill despite calls from the opposition to do so. He will early next month name an independent counsel to probe whether Lee was involved in a 2001 stock manipulation case.
The prosecutor should launch an inquiry around January 10 and complete an initial investigation by February 17. Officials of Lee's Grand National Party (GNP) had called on Roh to veto the bill, saying its candidate's crushing victory showed most voters do not support it.
The GNP candidate beat his pro-government liberal opponent by the widest margin in the country's democratic history. State prosecutors early this month had cleared Lee of links to the case involving his former business partner and a firm called BBK.
But rivals then publicised apparent new video evidence of Lee's past connection to the suspect firm, prompting his parliamentary opponents to vote on December 17 for a new inquiry. "Following the disclosure of the BBK video, the people's suspicions should be dispelled, due to the conflict between Lee's campaign remarks and what he actually said in the video," Roh was quoted by his spokesman as telling the cabinet meeting.
Roh also said there are no legal grounds to veto the bill because it was ratified by a majority of legislators and because Lee himself had vowed to accept it on the eve of election day. Lee, a former construction executive and ex-mayor of Seoul, has said he is confident he will again be cleared.
If so, he has said, those behind the special counsel bill should be held responsible-a reference to the pro-government United New Democratic Party. In the meantime Lee, 66, is setting up his transition team. This week he chose the head of a Seoul women's university to head it. Aides had said he wanted an academic rather than a politician to head the team to highlight his desire for a non-partisan and pragmatic government when he takes over.
At his first post-election press conference, Lee had promised pragmatic policies aimed at revitalising the economy and persuading North Korea to denuclearise and improve its rights record.
"The people opted for pragmatism over ideology," he said. Lee said companies had been discouraged by "anti-market and anti-business" sentiment under the outgoing Roh government. "When I am sworn in, the investment environment for businesses will completely change."
The special prosecutor will investigate whether Lee and his then-partner were involved in stock price manipulation through BBK or other firms; whether Lee embezzled any proceeds of share manipulation; and whether separate allegations related to property dealings are correct.
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