Probe Roils South Korea Election

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Junji Kurokawa / AP

Presidential candidate Lee Myung Bak at a campaign rally in Seoul, Tuesday, Dec. 18, 2007.

South Korean election campaigns are famous for dramatic events in the eleventh hour, and this presidential election is proving to be no different. On Monday, just two days before the Dec. 19 polls, Korea's parliament, the National Assembly, approved a plan to open an investigation into allegations of fraud against presidential front-runner Lee Myung Bak. The Assembly greenlighted the probe after a video surfaced over the weekend of a lecture Lee gave in 2000, in which he claimed that he set up Korean investment firm BBK, a connection he had previously denied. Kim Kyung Joon, the head of the company and Lee's business partner in a previous venture, was indicted on Dec. 5 on charges of rigging share prices and embezzling tens of millions of dollars from the company, although Seoul prosecutors announced last week that they could find no evidence of Lee's involvement.

It's a sharp blow for a candidate who the latest polls say is set for an easy victory. Lee's camp responded by saying their candidate had "exaggerated" his involvement with the company in the video, and reiterated that Lee did not found BBK. But despite renewed questions over his possible involvement in the stock scandal, most observers believe a Lee victory is still all but certain. With outgoing President Roh Moo Hyun deeply unpopular because of his perceived failures to create more job opportunities or to combat rising housing prices, Korea's electorate seems more eager for a leader who can revive the economy than one with a pristine track record.

Indeed many Koreans admire Lee, a can-do former Seoul mayor and rags-to-riches industry tycoon with a personal fortune estimated at $38 million (making him the wealthiest among the presidential candidates). Lee grew up in a poor family in the east coast town of Pohang, became a senior executive at the conglomerate Hyundai at age 36 and played a role in the nation's rapid economic development in the 1970s and '80s. As mayor of Seoul from 2002 to 2006, Lee won praise for his management of the city, putting an end to recurring subway strikes and creating a new green space in the center of town by uncovering a formerly paved-over river. But he has also had to apologize for faking his address in the 1980s to get his children into better school districts, and is accused of avoiding taxes by improperly registering his children as managers of a building he owns. In 1998, he was forced to step down as a member of parliament after being convicted of illegal campaign financing.

Lee's rivals are hoping that the BBK scandal could help swing undecided voters away from him; according to the Korea Times, as of last week one-quarter of voters still hadn't made up their minds. Still, many observers are skeptical that the National Assembly investigation, even with such bombshell timing, will have much of an effect on the vote. "I don't think it will change the outcome of the election," says Paik Haksoon, a senior fellow at the Sejong Institute, a Seoul-based think tank. However, he adds, "it could lower support for Lee significantly." Assuming Lee wins at the ballot box, it's possible he could still face a criminal investigation; while the constitution prohibits the prosecution of a sitting President for any crime other than treason, it makes no mention of a President-elect. The probe into Lee's BBK ties is scheduled to finish before the inauguration, set for Feb 25.