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Ex-president Lee Myung-bak during his first trial on May 23

Samsung received a request from the Blue House asking it to pay US litigation costs for the company DAS during the Lee Myung-bak presidency, former Samsung Group vice chairman Lee Hak-soo claimed in testimony recently disclosed in court.

According to Lee Hak-soo, Samsung’s support for the US lawsuit was reported to group chairman Lee Kun-hee, with around 6.8 billion won (US$6.1 million) in legal costs paid for the sake of Lee Kun-hee’s special pardon.

During a July 10 hearing in Lee Myung-bak’s trial before Hon. Judge Jeong Gye-seon of Seoul Central District Court’s 27th criminal division, prosecutors unveiled evidence in connection with bribery charges over Samsung’s payment of legal costs for DAS, including a surrender document by Lee Hak-soo and prosecutors’ report. In his surrender document, Lee Hak-soo wrote that “Samsung was made to pay former President Lee’s US legal costs on his behalf at the request of Kim Seok-hwan, an attorney working at Akin Gump [the law firm handling DAS’s case in the US].”

In particular, Lee Hak-soo claimed that Kim visited him in his office and told me, “I’ve met with President Lee and [Blue House general affairs and planning secretary] Kim Baek-joon. It will cost a lot to help the President, and if Samsung were to cover the costs the DAS litigation, it would be beneficial to the nation and the Blue House would be grateful.”

“The President would also be grateful if Samsung were to do this,” Lee quoted Kim as saying. Lee submitted the surrender document in February while undergoing questioning by prosecutors after returning from the US, where he had traveled for convalescence purposes.

On Samsung’s reasons for providing support, Lee said, “It is true that Samsung expected it might be helpful to the company in various says if it were to pay President Lee’s legal costs in the US on his behalf.”

“I think the Blue House would certainly have heard about Samsung’s efforts to secure a pardon for chairman Lee Kun-hee, and we hoped it might be a bit helpful in terms of the pardon,” he added.

Lee Hak-soo

Lee also said that while he did not meet personally with Lee Myung-bak or Kim Baek-joon, they “may have talked to Kim Seok-hwan about the matter of Lee Kun-hee’s pardon or [Pyeongchang’s] bid for the Winter Olympics.”

“At the time, I believed we were doing it for the sake of the company and the chairman. As I think about it now, I have concluded it was a mistake, and I deeply regret it,” Lee Hak-soo wrote in his surrender document.

Under questioning by prosecutors, Lee Hak-soo said he reported Kim Seok-hwan’s proposal to Lee Kun-hee and was told to provide the support.

“At the time, I was preoccupied with the trial, and I couldn’t just say no to a Blue House request, so I went to Lee Kun-hee’s home, concluding that I needed a decision for him,” he recalled.

“[Lee Kun-hee] said, ‘If the Blue House says do it, we have to do it,’ and told me to provide the support,” he told prosecutors.

Lee Hak-soo also explained, “[Lee Kun-hee] naturally anticipated he would be pardoned and reinstated if he was found guilty.”

“I don’t think he provided the support solely because of the pardon. I think he anticipated he could receive support from the President in various ways if he cooperated [with the Blue House],” he added.

In Dec. 2009, Lee Myung-bak delivered an exclusive special pardon for Lee Kun-hee, who just four months before had been sentenced to three years in prison suspended for five years and 110 billion won (US$98 million) in fines for breach of trust and tax evasion after being indicted following a special prosecutor’s investigation. As a reason for the exclusive pardon, then-Justice Minister Lee Kwi-nam said it was intended so that Lee Kun-hee could “regain his standing as an International Olympic Committee member and create a more favorable environment for the 2018 Winter Olympics bid.”

Between Nov. 2007 and Nov. 2011, Samsung Electronics paid around 6,774,020,000 won (US$6,036,800) in costs for DAS’s suit in the US to receive investment funds back from BBK. In his first court hearing in May, Lee Myung-bak strenuously denied charges in connection with bribery and Samsung, calling it “shocking and insulting to have been indicted as having taken a bribe from Samsung in exchange for a pardon.”

But Lee Hak-soo’s version of events lines up with that of Lee Myung-bak’s “40-year steward” Kim Baek-joon, who quoted Kim Seok-hwan as having told the former President that Lee Hak-soo would “provide additional funds for Akin Gump legal costs” and instructed their use to help Lee Myung-bak. Under questioning by prosecutors, Kim Baek-joon said that Lee Hak-soo “visited the Blue House between April and June 2008 and shook hands and talked with President Lee.”

“I don’t really remember the specifics, but I heard him explain Samsung’s position and promise to offer services in the future,” Kim recalled.

A “VIP report” document drafted by Kim in Oct. 2009 similarly showed that Lee Myung-bak received a report on Samsung’s support being used to cover DAS’s US legal costs, prosecutors said.

By Kim Min-kyoung, staff reporter

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