The prosecution on Wednesday said that it has launched an investigation into allegations that Rep. Lee Sang-deuk of the Saenuri Party, the elder brother of President Lee Myung-bak, received bribes from a mutual savings bank in exchange for favors in bank evaluations.

This is the first time the six-term lawmaker has become an official target of an investigation, though it has been rumored he was involved in several more corruption scandals.

According to the Seoul Central District Prosecutors’ Office in charge of investigating inappropriate relations between badly managed mutual savings banks and politicians, Rep. Lee is suspected of having received 400 million won ($353,900) from the management of Prime Savings Bank. 

The bank was suspended by regulators last September. Its president Kim Sun-kyo in early January was indicted for approving 30 billion won of illegal lending that led to the suspension order. Its management bribed Lee, hoping he could peddle influence in evading a business shutdown, investigators said.

The prosecutors said that they are studying when the kickback transfer was made and whether the case could be linked with several other scandals surrounding the lawmaker.

Lee has been at the center of several bribery scandals since Park Byung-su, his close aide of 16 years, was arrested earlier this year for having received about 600 million won in bribes from SLS Group Chairman Lee Kuk-chul in exchange for business favors. Park also reportedly received another 150 million won from Jeil Savings Bank in order to save the company from sinking. The assistant is known to have pocketed more than 1 billion won from other businessmen seeking Lee’s favor.

Earlier this month, Kim Hak-in, chairman of the Korea Broadcasting Academy, reportedly confessed that he had delivered 200 million won to Rep. Lee’s friends in a bid to win the ruling party nomination for the 2008 general elections.

When 700 million won was found in the bank account of his secretary, Lee claimed the money to be his, but denied that the cash is a kickback or any kind of slush fund.

The prosecution said it will establish a team under the central investigation division dedicated to examining allegations against Lee, which had been investigated by a different division. The team will study whether individual cases may be related to one another to create a large corruption scandal.

Lee denied all allegations.

“I have never received money or favors from savings banks or others,” he said in a press release.

By Bae Ji-sook (baejisook@heraldcorp.com)