Rival parties on collision course over bank scandal

Both sides say the other should take responsibility for savings bank problems


The presidential office and opposition lawmakers are accusing each other of being associated with a corruption scandal involving savings banks that has led to the arrest of a former top state auditor for bribery.

A senior Cheong Wa Dae official on Tuesday went on a counteroffensive against Park Jie-won, former floor leader of the main opposition Democratic Party, a day after Park raised suspicions that a senior presidential aide may have colluded with an arrested honorary chairman of Samhwa Savings Bank.

The Cheong Wa Dae official said on condition of anonymity that “a DP official requested the presidential office to salvage a troubled savings bank based in a DP constituency in November.“

The official said the presidential office refused the opposition’s request to seek ways to ease the required capital ratio of Bohae Savings Bank based in Park’s constituency of Mokpo, South Jeolla Province.

The bank lacked funds to increase its capital up to the ratio required by the Bank for International Settlements.

Park said on Tuesday that he never made such a request, adding that he had raised the suspicion against senior presidential secretary for political affairs Chung Jin-seok because “Chung was close to Shin Sam-kil,” an arrested honorary chairman of Samhwa Savings Bank.

Chung said Monday that Shin was “just one of his thousands of acquaintances,” and reiterated that he had nothing to do with the savings bank scandal.

Pointing to the fact that Chung Jin-seok served as an outside director to Samhwa Savings Bank for nearly four years until April 2008, Park said a parliamentary fact-finding panel “must look into what kind of role Chung played” when Shin Sam-kil took out loans from the Busan savings bank to acquire Samhwa.

DP spokesperson Lee Yong-sup alleged that a lawyer who asked his friend and presidential aide Kwon Jae-jin for help to protect the Busan savings bank from possible sanctions for poor capital structure was the uncle of second vice minister of knowledge economy Park Young-joon.

The lawyer is not related to Park, however, according to the Cheong Wa Dae official.

The official flatly denied the accusations, urging the DP legislators to “take moral and political responsibility” for raising the suspicions.

“If the suspicions they raised turn out to be untrue, they should take responsibility for their false accusations,” the official told Yonhap news agency.

The scandal has been a top political and social issue here for months.

Busan Savings Bank was found to have engaged in extending illegal loans to large shareholders and committing other financial irregularities totaling billions of dollars.

The bank has also been accused of tipping off its employees’ relatives and VIP customers about its impending suspension in February so as to help them withdraw their deposits in advance.

The rival parties agreed Monday to launch a parliamentary investigation into the savings bank scandal.

Hwang Woo-yea, floor leader of the ruling Grand National Party, and his DP counterpart, Kim Jin-pyo, agreed to form a special committee in next month’s extraordinary session to look into the scandal, both parties said.

The deal came hours after prosecutors arrested Eun Jin-soo, a former top official of the Board of Audit and Inspection, on charges of accepting bribes from Busan Savings Bank when the bank was seeking his influence to avoid sanctions for financial irregularities.

Also Monday, prosecutors indicted a former senior financial regulator on bribery charges.

By Kim So-hyun (sophie@heraldcorp.com)