South Korean President Apologizes Amid Family Corruption Claims

South Korean President Lee Myung Bak apologized today for “unfortunate incidents” surrounding his family, as prosecutors prepare to indict his brother on corruption charges.

“I caused the public much concern in recent days with unfortunate incidents happening around me and in my family,” Lee said in a four-minute televised speech, without elaborating. “I apologize deeply and will take full responsibility.”

Lee, whose single five-year term ends in February, is seeking to help his ruling New Frontier Party hold onto the presidency in December elections. Prosecutors are pursuing corruption cases against former presidential aides, ministers and other senior members of the party.

Lee’s brother, former lawmaker Lee Sang Deuk, will be indicted this week for his alleged involvement in a savings bank bribery scandal, Choi Woon Sik, head of the team in the Supreme Prosecutors’ Office investigating wrongdoing at the banks, said in a phone interview after the speech today. Lee Sang Deuk was arrested July 11 for allegedly receiving illegal political donations.

The NFP narrowly won elections for parliament in April after enacting reforms to restore its image, which was tainted by National Assembly speaker Park Hee Tae’s resignation in February over alleged vote-buying.

Prosecutors have indicted almost 200 people and ordered at least two jail sentences after uncovering illegal lending and lax oversight among bankers, regulators, politicians and lobbyists. The Financial Services Commission has closed 20 savings banks since January 2011 and depositors and bond holders have lost more than 1 trillion won ($872 million).

To contact the reporters on this story: Sangwon Yoon in Seoul at syoon32@bloomberg.net; Seonjin Cha in Seoul at scha2@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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