Kim In-seop, former CEO of Korea Housing Technology, who was identified as a key lobbyist in relation to the ‘Suspicion of corruption in the Baekhyeon-dong development project’/News 1
In the trial of ‘Baekhyeon-dong lobbyist’ Kim In-seop, court testimony was revealed that there was no threat from the Park Geun-hye government’s Ministry of Land, Infrastructure and Transport at the time regarding the suspicion of preferential treatment for Baekhyeon-dong’s fourth stage use change. In the 2021 National Assembly audit, Lee Jae-myeong, leader of the Democratic Party of Korea, responded that “(the 4th stage use change) was requested by the Ministry of Land, Infrastructure and Transport, and if it was not done, I was threatened to raise an issue with dereliction of duty,” which was deemed a violation of the Public Official Election Act (spreading false facts). Since he has been indicted, it is expected that this will also have an impact on Representative Lee’s trial.
At the trial of Kim In-seop, former CEO of Korea Housing Technology, held on the 13th at the Criminal Division 27 of the Seoul Central District Court (Presiding Judge Ok-gon Kim), Mr. Jeon, former head of Seongnam City’s Residential Environment Department, appeared as a witness.
The Baekhyeon-dong development is a project to build apartments on the site of the former Korea Food Research Institute in Bundang-gu, Seongnam-si. After Mr. Paul Jeong, the project implementer, recruited Mr. In-seop Kim, a former head of the campaign headquarters during Lee Jae-myeong’s Seongnam mayoral term, in 2015, Seongnam City is suspected of preferential treatment by increasing the site use by four levels from a natural green area to a semi-residential area. Mr. Kim was arrested and indicted on charges of receiving 7.7 billion won from Mr. Paul Jeong in exchange for arranging a change of use.
For this project, Paul Jeong previously applied for change of use from a natural green area to a type 2 general residential area to Seongnam City twice in 2014, but the application was rejected. Regarding the reason, Mr. Jeon said, “It did not fit the Gyeonggi-do comprehensive plan and Seongnam city’s basic urban plan.” Since Mr. Jeong’s application is a residential development plan to build apartments, it does not fit the 2020 Seongnam Urban Basic Plan, which calls for public development on ‘land scheduled for urbanization’.
Mr. Jeon rejected the first application and testified that he directly reported the rejection to then-Mayor Lee Jae-myung of Seongnam and received approval. It is said that the documents at the time included ‘adjustment to reduce the housing ratio’ and ‘order to review the public-private joint development plan with the opening of Seongnam Province’. Regarding this, Mr. Jeon said, “The research site is subject to public development and the benefits from change of use are enormous, so we decided to participate in the Seongnam Provincial Opening Project to secure publicness.”
In September 2014, Mr. Paul Jeong applied for a second change of use, adding that he would “participate in a public-private joint development method,” but Seongnam City rejected it again in December of that year. Mr. Jeon said, “The ratio of residential land was the same as the first application, and only the participation in pothole construction was changed, so it did not comply with the higher-level plan.” Mr. Jeon also testified that he reported to Mayor Lee Jae-myung regarding the second rejection.
In the document related to the ‘second rejection’ reported to the mayor at the time, ‘reconsideration of change of use to semi-residential area’ was written. Regarding this, Mr. Jeon said, “In order to ensure business feasibility, we reviewed the plan (change) to a semi-residential area to increase the floor area ratio instead of reducing the area of type 2 residential areas.”
Since the floor area ratio of the two types of general residential areas is 250% and the floor area ratio of semi-residential areas is 400%, the business operator applied for a change of use to semi-residential instead of reducing the residential ratio to improve business feasibility.
In December 2014, when the application was rejected for the second time, an official letter of cooperation for sale was sent from the Ministry of Land, Infrastructure and Transport. The Seongnam City Residential Environment Department sent a legal inquiry regarding this and received a response. The third application was made in March of the following year, and a ‘fourth stage’ change of use was made from a natural green area to a semi-residential area.
When asked by the prosecution whether the change of use was made through threats or coercion by the Ministry of Land, Infrastructure and Transport against Seongnam City, Mr. Jeon said, “I have never received such a call or heard anything from anyone at the Ministry of Land, Infrastructure and Transport while I was working.” When asked whether the Ministry of Land, Infrastructure and Transport can instruct local governments to change the use area, he responded, “It is the Mayor of Seongnam’s sole authority, so how can the Ministry of Land, Infrastructure and Transport say so? “That cannot happen,” he said.
Mr. Jeon said about the official letter requesting cooperation regarding the sale of real estate sent by the Ministry of Land, Infrastructure and Transport in October 2014, “It is a request for cooperation and there is no compulsion at all.” When the prosecution asked, “Do you mean that the contents of the official document do not necessarily mean that the local government must change the use?” he answered, “Yes.”
Mr. Jeon said, “Regarding this case, the Mayor of Seongnam (at the time, Lee Jae-myeong) claimed that ‘the Ministry of Land, Infrastructure and Transport requested that the residence be changed to a two-class general housing.’ Is that true?” he also answered “no.”
The judge also asked Mr. Jeon, “Isn’t it natural to want to cooperate as much as possible when a state agency requests cooperation? Then, isn’t there de facto coercive power?” In response to this, Mr. Jeon replied, “I am not the type of person who will ruthlessly tempt someone, even if they tell me what they want.”
Among the conditions for change of use at the time was that the residential site would be converted to 100% rental housing. However, in January 2016, Mr. Jeon was asked to cooperate in reducing the rental housing supply ratio to 10%, and he reportedly refused. Regarding this, Mr. Jeon testified, “I scolded the person in charge, saying, ‘If you reduce the rental housing ratio by 90%, how much profit will private operators secure?’” Afterwards, the market approved a document specifying a 10% rental housing supply ratio without Mr. Jeon’s name, and Mr. Jeon revealed that he received a relegated appointment.
However, in response to Mr. Kim’s lawyer’s question, ‘Has Mayor Lee Jae-myung ever explicitly expressed and instructed the mayor to participate in the project to secure publicity?’, Mr. Jeon replied, “I have never given any instructions,” and “I explained the situation.” I answered.
Mr. Jeon said, “Jongsanghyang itself is a significant privilege,” and added, “We put a lot of thought into eliminating the possibility of preferential treatment, and made (change of use) conditions such as allowing participation in construction or expanding the ratio of rental housing.”
On the 12th, CEO Lee was also indicted on charges of breach of trust for causing 20 billion won in damage to the construction company by excluding Seongnam Provincial Construction from the project and giving exclusive business rights to a private contractor at the request of Kim In-seop during the Baekhyeon-dong development process. The prosecution believes that after recruiting Kim In-seop, Paul Jeong gave him various preferential treatment, including upgrading the use to the fourth level, reducing the ratio of rental apartments, installing an illegal retaining wall, and changing the target of donations.
2023-10-13 13:35:45
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