Justice Nominee Kim Faces Widening Drug Lobbying Scandal

Justice Minister nominee Kim Seung-won has offered explanations regarding allegations of "new drug lobbying" that surfaced during the approval process for Genencell's COVID-19 treatment clinical trial, but the controversy is instead widening. Despite the nominee's rebuttal that it was merely "conveying a public-interest grievance," recordings and text messages suggesting a quid pro quo have been released one after another. Opposition attacks are also intensifying over the circumstances in which prosecutors moved to indict Kim on charges of promising a bribe for brokerage but ultimately suspended the indictment.

According to political sources on the 4th, Kim's confirmation hearing preparation team issued an explanatory statement saying, "The nominee, as a National Assembly member, merely conveyed a public-interest grievance asking that the clinical trial procedures of a domestic small and medium-sized enterprise be reviewed fairly." The team also denied any relationship with broker Yang, a key party to the case, and Genencell CEO Kang.

In response to these explanations, independent lawmaker Han Dong-hoon raised additional allegations that day by releasing text messages and call recordings between the parties involved. In a phone call on Sept. 14, 2021, released by Han, Yang said, "A big investment company has joined, and if it turns into funding, it would be good for your election next year, and this person also seems likely to be a source of strength for you," to which Kim replied, "Then shall we meet right after Chuseok? I'll send you dates."

In an Oct. 7 call the same year, when Yang requested a meeting along with an explanation about the new drug, Kim responded, "The moment it gets approved by the Ministry of Food and Drug Safety, you can make hundreds of billions of won, can't you? That's why there's fierce lobbying, and since I need to hear an explanation, could you send me the materials by email to save time?"

The opposition takes issue with the fact that Kim agreed to a meeting and even requested materials immediately after the conversation about the economic benefits of Genencell's new drug. They argue that this directly contradicts the explanation that he merely conveyed a routine public-interest grievance.

The controversy grew further as text messages in which Yang asked Kim for his political fundraising committee account number came to light. The prosecution's indictment of Yang and Kang reportedly includes content showing that in December 2021, the two discussed a separate business matter and then asked Kim for his fundraising committee account number. A text message in which Kim attached the account number and replied "thank you" was also reportedly included.

With signs emerging that prosecutors had considered indictment and even a prison sentence recommendation, the background to the final decision to suspend Kim's indictment is expected to become a key point of contention at the confirmation hearing. A prosecution indictment plan document released by Han that day stated: "Conveyed to Kim Kang-lip (Minister of Food and Drug Safety) a request for approval of the clinical trial of the COVID-19 treatment developed by Genencell Co., and promised to receive 5 million won from Kang in the name of a political donation as compensation for the brokerage — promise of a bribe for brokerage." The document also specified a plan to indict Kim and seek an eight-month prison term.

Questions also remain over the review of arrest warrants for those involved in the case. The Supreme Prosecutors' Office requested that Judge Jung, then in charge of warrants at the Seoul Western District Court and reportedly acquainted with Kim, be excluded from the review, but the request was not accepted. Controversy has continued since it emerged that Judge Jung went on to reject the arrest warrant for Genencell CEO Kang. Kim's side denied the allegations, saying he had met Judge Jung only once and that there was no special relationship, and noting that other judges handled the warrant review for Yang.

Voices claiming damages have also emerged from outside political circles. The claim is that small investors suffered losses as shares of Sejong Medical, formerly Genencell's largest shareholder, plunged the day after Genencell's clinical trial approval. A "public interest whistleblower's statement" released by People Power Party lawmaker Park Jung-hoon said, "I wish to reveal that this was the starting point of a massive capital crime that used the credibility of Sejong Medical, then a KOSDAQ-listed company, to defraud numerous small investors of their assets," adding that "the defendants held the arrogant conviction that 'approval was a foregone conclusion by whatever means necessary,' through lobbying and promises of bribes to a certain political figure and senior officials at the Ministry of Food and Drug Safety."

The Democratic Party has moved to defend Kim. Democratic Party leader Kim Min-seok, referring to remarks by Han — then justice minister — in connection with the case of former Democratic Party lawmaker Noh Woong-rae that "even the rustling sound of the cash envelope was vividly recorded," criticized him by saying, "Rather than taking an interest in the hearing, it's time you examined yourself a bit." Democratic Party spokesperson Cho Kye-won said, "The intention is to turn a confirmation hearing meant to vet policy and vision into a shambles," adding, "We condemn this irresponsible smear campaign."