Justice Nominee Faces Allegations of Slush Fund via Payroll Payback

■ Allegations Mount Against Justice Minister Nominee Extra Pay Given to Democratic Party Gyeonggi Staff Payback Routed to Account Not Reported to Election Commission Alleged Ties to Warrant Judge in Clinical Trial Lobbying Case On Dropping Charges, Kim Says He Has No Authority

Politics|
|
By Jin Dong-young and Lee Seung-ryungjin@sedaily.com, yigija94@sedaily.com
||
Justice Minister nominee Kim Seung-won speaks about his nomination on Feb. 3 as he arrives at his confirmation hearing preparation office at the Jeokseon Hyundai Building in Seoul's Jongno district. Photo by Cho Tae-hyung - Seoul Economic Daily Politics News from South Korea
Justice Minister nominee Kim Seung-won speaks about his nomination on Feb. 3 as he arrives at his confirmation hearing preparation office at the Jeokseon Hyundai Building in Seoul's Jongno district. Photo by Cho Tae-hyung

Allegations are piling up against Kim Seung-won, the nominee for justice minister. Critics say that while he headed the Democratic Party's Gyeonggi Provincial chapter, the chapter inflated salaries paid to party staff and took part of the money back to create a slush fund. Separately, conservative politicians have called for a special counsel to investigate suspected lobbying to win approval for a COVID-19 treatment clinical trial, intensifying opposition scrutiny ahead of his confirmation hearing.

Rep. Han Dong-hoon, an independent lawmaker, wrote on Facebook on the 3rd that while Kim led the Gyeonggi chapter, the party unit paid several staff members an extra 2 million won a month on top of their actual salaries. "Was there a case in which that money was paid back through repeated and continuous transfers into a bankbook held in the name of a particular staff member, rather than the political funds account reported to the National Election Commission, and used as a slush fund?" he asked publicly.

According to political sources, the Democratic Party's Gyeonggi chapter paid an additional 2 million won a month for several months in 2025 to a director and a deputy director who handled general affairs, on top of their existing salaries. Four staff members, including those two, were paid 1 million to 2 million won more than usual, and about 45 million won corresponding to that amount was then transferred back to a separate account. The chapter has explained that the money was used as operating funds in the nature of business promotion expenses, according to sources.

But critics point out that if political funds booked as salaries were in fact used for other purposes, that could violate the Political Funds Act. Han said the information came with specific documentation and called it "exactly the way corrupt companies used to create slush funds in the past."

Kim said he was not directly involved in the matter. Speaking to reporters on his way into the office preparing for his confirmation hearing, Kim said, "I requested an accounting audit by the central party on that matter, and I understand that an investigation is under way in line with the relevant procedures."

null - Seoul Economic Daily Politics News from South Korea

Suspected influence-peddling over approval of a COVID-19 treatment clinical trial has emerged as another flashpoint. Opposition politicians have claimed that the case involves not only Kim, Genencell founder Kang and a broker surnamed Yang, but also the judge who handled the arrest warrant at the time.

Han said the Supreme Prosecutors' Office asked that a warrant judge surnamed Jung at the Seoul Western District Court be excluded from reviewing the arrest warrant in the lobbying case involving Kang, but that the Supreme Court did not accept the request. He added that the investigation turned up a photograph of Judge Jung together with Kim and Yang, as well as text messages in which Kim called the judge out for drinks, saying Yang was with him. He then said Kim was "someone who should face a special counsel investigation over new drug lobbying."

Rep. Park Jung-hoon of the People Power Party raised further questions about the relationship between Yang and Kim. "Yang formerly worked as a hostess at an entertainment bar in Gangnam, Seoul, and came to know Kim when he was a judge," Park said. "There is a photograph of Kim taken with Yang at Yang's home around the time the request was made. The fact that Yang sent Kang a text message saying, 'This guy does anything I tell him to,' also shows that the two have a special relationship."

In 2023, while the case was under investigation, Judge Jung reviewed the related arrest warrant but rejected it, saying it was difficult to see a risk of flight or destruction of evidence. Prosecutors later conducted supplementary investigation, obtained an arrest warrant for Kang and indicted him in detention in February 2024. Judge Jung is known to have worked alongside Kim at the Jeonju District Court. On the allegations, Kim said, "There was nothing improper. I want to clear my name through a constitutional appeal."

Whether charges against President Lee Jae-myung in his criminal cases will be dropped is another key hearing issue the opposition is preparing to press. Kim served as co-chair of a group formed by Democratic Party lawmakers to demand that the charges against Lee be dropped. "The justice minister has no direct authority to drop charges, and I have no intention of directing it through the prosecutor general either," Kim said. On allegations that he took on multiple sex crime cases as a lawyer, he said, "The law firm took the cases, and I was not involved."

Original reporting by Jin Dong-young and Lee Seung-ryung for Seoul Economic Daily.

AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.

Watch · Seoul Economic Daily

More →
2:39

AI KEY

Preview
Korean Corporate Intelligence HubKOSPI · KOSDAQ · 12 sectors

A live, cap-weighted view of every KOSPI and KOSDAQ sector, with same-day Korean reporting distilled by company — built for foreign investors, correspondents and analysts who need to scan Korea before the next session.

Korea Company Atlas

Preview
Market Ontology · The Feedback LoopKFTC 2025 · 92 groups · 121,954 articles

An English ontology of the Korean market — how companies, the media, the government and the National Assembly move each other in a loop. Korea's named controlling persons and designated business groups are a mechanism, not a risk to be priced blind.

SIGNAL

Now live
English Edition · Capital MarketsM&A · IPO · PE · Fund Flows

SIGNAL English Edition is live — Korea's deal desk reporting in English. M&A, IPOs, private equity and fund flows, covered daily for global institutional investors. Browse free; subscriber-only scoops at the 50% intro rate.