Lee Sang-deuk, President Lee Myung-bak’s elder brother and former ruling party lawmaker, was questioned by prosecutors on Tuesday over allegations he received more than 700 million won ($599,000) from businessmen in exchange for his influence.

He is one of many prominent figures in the ruling and opposition parties allegedly involved in savings bank bribery.

Lee, once the most influential figure in the ruling party, showed up at the Supreme Prosecutors’ Office in southern Seoul around 10 a.m.

When asked what he felt at the moment, he told the press, “It is heartbreaking.”

He refused to answer whether he had received illegal funds from businessmen or used them for President Lee’s election.

“I will talk about everything with the prosecutors,” he said. The older Lee reportedly spent the previous night in a hotel in downtown Seoul with his attorneys preparing for the interrogation.

Opposition parties urged the investigators to look deeper into other scandals that surround him and his brother dating back to the 2007 presidential election.

The prosecution is expected to file for his detention soon after the interrogation wraps up. It said in the afternoon that Lee was called in as a witness but later shifted to a “suspect,” hinting that some of the suspicions have been verified.

The former six-term lawmaker is believed to have received more than 500 million won from Lim Suk, chairman of Solomon Savings Bank, and Kim Chan-kyong, chairman of Mirae Mutual Savings Bank, since 2007 in exchange for letting their businesses evade shutdown by financial regulators. The two banks survived the 2011 restructuring plan, but were suspended in May due to financial weaknesses.

Lee was reportedly introduced to Lim in 2007 through Rep. Chung Doo-un of the ruling Saenuri Party who allegedly received 30 million won from Lim through Lee Ho-young, an official in the Prime Minister’s Office. In a bid to clarify the case, the prosecution summoned Lee Ho-young a day prior to questioning Lee Sang-deuk. 

Lee Sang-deuk is also suspected of receiving another 400 million won from the management of Prime Savings Bank that was ordered to shut down last year. He is claimed to have received 150 million won in illegal political funds from Kolon Group, too, while he worked as an adviser to the company.

The 77-year-old is believed to have hoarded the slush funds in his secretary’s bank account, which was found earlier this year during an investigation into a separate case. The prosecution is now studying the possibilities that the money was used to support Lee Myung-bak when he was the ruling party’s candidate for the 2007 presidential election.

While Tuesday’s questioning focused on Lee’s fishy liaison with savings bank management, the officers are also reportedly considering taking it a few steps further and verifying several other scandals that he may be involved in.

Lee is claimed to have bagged hundreds of millions of won from Lee Kuk-chul, chairman of SLS Group, to save the company from the workout process.

The president’s brother is also claimed to have convinced the management of Pohang University of Science and Technology to invest over 50 billion won in the now-defunct Busan Savings Bank, which inflicted financial loss on the school.

Another scandal is that he was wooed by professional brokers to peddle his influence in authorizing a multi-logistics terminal, PiCity, in southern Seoul, which has gone awry.

Whether or not Lee will be indicted, his being grilled is perceived as the breakdown of the so-called Lee Myung-bak cronies. Choi See-joong, former head of the Korea Communications Commission known as the mentor to the president; former Vice Knowledge Economy Minister Park Young-joon; former Vice Culture Minister Shin Jae-min; and former presidential spokesperson Kim Du-woo have all been arrested, indicted and some convicted, for various corruption charges.

Opposition parties urged the prosecutors to delve into the suspicion that Lee Sang-deuk played a key role in raising an alleged illegal fund for his younger brother during the presidential election campaign period. Park Yong-jin, spokesman of the Democratic United Party, claimed the allegation ranging Lee and the pro-Lee Myung-bak fraction including Chung should be investigated.

“Questioning Lee over the savings bank issue is touching only a tip of the iceberg. We urge the prosecution to probe every suspicion and settle public doubt and anxiety,” he said.

The Saenuri Party asked for an impartial investigation. Its floor leader Lee Hahn-koo said that the lawmakers should launch a parliamentary probe into the case.

“If necessary we will hold public hearing, too. The savings bank scandal might date back to the previous government. We should reveal every detail,“ he said.

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