By Kim Rahn
Staff Reporter

The prosecution on Monday raided the office and home of Lee Kwang-jae, lawmaker of the ruling Uri Party to secure evidence of his suspected involvement in the scandal over a failed oil development project.

The raids followed allegations that one of Lee’s supporters took illegal money from Jeon Dae-wul, a key figure in the scandal.

The prosecution is also trying to confirm other allegations that a Korea Railroad (Korail) director Wang Young-yong reported the project on Sakhalin Island, Russia, to the presidential office of Chong Wa Dae last August, before the rail authority made the contract for the project.

Prosecutors raided 11 places including Lee’s home and supporters’ offices, and are investigating documents seized. They also detained Lee’s supporter in Kangwon Province, identified as Chi, following Jeon’s testimony that he gave 80 million won to Chi in April 2004, around general election time.

Korail launched the project last August, after setting up Korea Crude Oil (KCO) with real estate developer Jeon and borrowing money from Woori Bank.

An energy development firm head Kwon Kwang-jin reportedly initiated the project and approached Jeon, who then reportedly proposed the project to Korail with an oil development expert Huh Mun-suk, who later became head of KCO.

But Korail withdrew from the project in November after its Russian counterpart failed to obtain approval from the Russian government, losing its down payment of $3.1 million.

Jeon reportedly said that he met Chi to discuss the oil project last May after Kwon proposed it. He also claimed that Lee introduced Huh to him the next month, and that Lee was involved in the project from the beginning. He also said he reported the project process to Chi regularly.

Prosecutors are investigating records of Jeon’s telephone conversation with Chi.

However, Lee, President Roh Moo-hyun’s close aide, denied involvement in the project and insisted that no money was deposited in his bank account, adding that thorough investigation on Chi should be conducted.

Prosecutors also said that Wang, who had led the failed project and was arrested on charges of forging official documents related to the project, confessed his report to an official in Chong Wa Dae’s industrial policy office, named Kim Kyong-sik. The presidential office also confirmed his visit to the office on Aug. 31.

They summoned Kim and questioned him over the details of Wang’s report and whether he had reported it to higher officials in Chong Wa Dae.

Chong Wa Dae admitted last month that the presidential situation room had investigated the project last November but closed the inspection as Korail had scrapped the project. But it denied its involvement in the scandal and said Wang briefed Kim on the oil project along with many other projects Korail planned to pursue.

Over the weekend, the prosecution detained former vice minister of construction and transportation Kim Se-ho, who was head of Korail at the time, on suspicions of failing to perform his duty. It plans to request an arrest warrant for Kim if he is proven to have approved the project knowing Wang’s reports and documents were false and distorted.

rahnita@koreatimes.co.kr