Korean front-runner faces hurdles

Under normal circumstances, South Korean presidential candidate Lee Myung-bak’s overwhelming lead in the polls would leave him coasting to victory in next month’s election, savoring the final weeks of the campaign like a golfer strolling up the 18th fairway with a four-shot lead.

Instead, he sees nothing but land mines on the path to power, from a threatened late entry of a heavyweight challenger to the possibility that he may soon be investigated in a financial fraud case.

Lee won a bitterly contested race to become the nominee of the conservative Grand National Party, or GNP, a once-vaunted political machine chafing after eight years in opposition. With his safe if middle-of-the-road persona, the former Seoul mayor has been running far ahead of Chung Dong-young, the standard-bearer for the remnants of a discredited governing coalition.

What may stand in Lee’s way is the impending return to South Korea of Kim Kyung-joon, a former business partner who is accused of embezzlement and money laundering. Kim has been in jail in California since 2004, fighting attempts by Korean prosecutors to extradite him over an alleged $20-million case of stock manipulation.

But Kim abandoned his fight to stay in the U.S. this fall, clearing the way for his repatriation. His arrival in the coming days will give prosecutors here a chance to discover if there is truth to Kim’s claim that Lee was an owner and behind-the-scenes power in a scandal-ridden investment firm called BBK.

Impressions that Lee has something to hide were stoked by revelations that his campaign hired lawyers to plead in U.S. court that Kim should not be allowed to return to South Korea until other U.S. litigation was settled.

Last week, the State Department authorized the extradition paperwork, and Kim is expected to be back in Seoul by mid-November. His decision to accept extradition has fueled speculation here that he has cut a deal with prosecutors that would implicate Lee in return for reduced jail time.

Lee says he severed all business ties with Kim in 2001 and claims to be a victim, not a co-conspirator, of any fraud. He points to previous inquiries that cleared him of wrongdoing. And publicly, at least, the Lee camp says it welcomes Kim’s return, arguing that it offers them a chance to clear the candidate’s name and dispel rumors.

“We will firmly counteract any political abuse of this case,” said Park Hyung-joon, spokesman for the campaign. “We will watch out for Kim’s lies in case he tells any, and we will watch for exaggerations in the media. The Korean people will be told the truth of this case.”

But the possibility of a wounded front-runner has spawned the second obstacle now rising in Lee’s path: a potential run for president by Lee Hoi-chang, a former public prosecutor and Supreme Court judge. He narrowly lost as the GNP candidate in the last two presidential elections. Now his camp is musing openly that conservative forces need a fallback candidate in case Lee Myung-bak ends up in legal limbo.

Lee Hoi-chang said Friday that he would decide this week whether to quit the GNP and form his own party to make another bid for the top job. Most observers expect him to run. Even without a formal declaration, polls put him in second place and climbing.

It remains to be seen if he has enough time or momentum to catch Lee Myung-bak. But the presence in the race of a second conservative candidate almost certainly changes the electoral calculus. Lee Myung-bak’s supporters fear that the conservative vote could split, allowing the more liberal Chung to gain middle-of-the-road support and win. Even if their candidate prevails in the Dec. 18 vote, the supporters worry that a narrower margin of victory will crimp his mandate.

The GNP standard-bearer’s supporters have responded with a fierce attack on Lee Hoi-chang’s record, noting that he is tainted by scandal, having received illegal campaign funds during his last bid in 2002. His previous runs for president have been undermined by questions about how his two sons secured exemptions from South Korea’s compulsory military service.

The front-runner will not be easy to dislodge. A onetime golden boy in the Hyundai Group who rose up its executive ranks after being handpicked for success by the company founder, Lee Myung-bak enjoys the backing of a business establishment that has ladled money into his campaign. His platform calls for tax cuts, arguing that they will spur the higher growth rates needed to overcome social problems such as a housing crunch that has priced property beyond the reach of many.

Lee Myung-bak has even given his campaign a signature vision: an ambitious plan to link the country through a network of canals and rivers. It would initially extend from Seoul in the north to Busan, the country’s second-largest city, on the southern coast. But Lee envisions the waterway expanding across the country, pulling economically hurting regions into the embrace of a national infrastructure and eventually reaching even into North Korea.

The price tag is in the billions, though Lee said he would tap foreign investors to avoid racking up public debt.

Lee, however, will be hard-pressed to get much of a hearing on his ideas amid cries about corruption and character.

“It’s a perplexing situation,” campaign spokesman Park said. But the former Seoul mayor will not be driven from the race, Park insisted.

“If that is Lee Hoi-chang’s thinking, he’s wrong.”

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bruce.wallace@latimes.com