SEOUL—The conservative candidate widely expected to be South Korea's new president denied on Tuesday fresh allegations of involvement in a financial scandal that threatens to haunt him into office if he wins.
Two days before the presidential election, parliament voted on Monday to set up an independent probe into accusations Lee Myung-bak was directly involved with a firm suspected of swindling investors out of millions of dollars.
"I've got nothing to hide," the former Seoul mayor told a news conference. "The result of the independent counsel probe will not change anything ... There is only one truth."
The scandal appeared to have been put to rest when earlier this month prosecutors said they had not found any evidence to incriminate Lee.
But at the weekend, political rivals aired a video which they said showed he had lied about his role in the BBK investment company at the centre of the allegations.
Already sounding like a president-elect, Lee said the fuss was no more than the usual political mudslinging, which he would stamp out once he took office.
If the front-runner Lee Myung-bak wins South Korea's presidential election on Wednesday, he will become the first president-elect to face a criminal probe.
The following is a brief look at the investigation into allegations that Lee was involved with BBK, a firm suspected of defrauding investors of millions of dollars:
What Is BBK and What Is It Suspected of Doing?
BBK, established in 1999, was a U.S.-based investment company that prosecutors said manipulated stocks. Local media said about 5,000 investors lost 60 billion won ($63.77 million). One of the founders of the company, Kim Kyung-joon, has been arrested and indicted on charges of fraud and embezzlement.
What Is Lee's Suspected Involvement?
The ruling United Nation Democratic Party (UNDP) on Sunday disclosed a video clip of Lee saying he established BBK. Lee has denied any wrongdoing and prosecutors cleared him on December 5 of involvement in criminal activity.
Parliament has approved a bill to allow an independent counsel to re-open the BBK investigation. It will also look into allegations that politics played a role in ending the initial probe and, separately, investigate charges that Lee maybe concealing his wealth.
What Are the Key Dates?
Outgoing President Roh Moo-hyun will name a special investigator at the start of the new year. The investigation starts in mid-January and is expected to be wrapped up around, or after, the Feb. 25 presidential inauguration.
What Are the Implications?
As president-elect, Lee can be questioned and indicted.
But after the new president is inaugurated, that person cannot be prosecuted while in office for crimes other then rebellion or certain violations of international law.
Analysts said Lee's rivals will use the scandal in the campaign ahead of the April parliamentary election.
They say that if Lee is found to have had a hand in illegal activities, it would undermine his presidency.
"When I become president ... I will make sure there will be no grounds for negative campaigning to take place."
Even his chief election rival, liberal Chung Dong-young who has been trailing by some 30 points in opinion polls, all but admitted his chances in Wednesday's vote were slim, pinning his hopes of winning on what he said would be a miracle.
Chung has been hamstrung by his political links to the outgoing President Roh Moo-hyun who has fared poorly in opinion polls through much of his five-year term, widely viewed as having failed to give a lift to the once fast-growing Korean economy.
It is that desire among voters to see more jobs and fatter wallets that Lee has capitalised on with his campaign promise to run the country like the CEO he used to be at one of South Korea's biggest conglomerates, promising fast growth and an end to excessive regulations.
With nicknames like "bulldozer Lee" for his reputation of getting things done and "the economy president", he has maintained a huge lead throughout the campaign and analysts say the latest splash of headlines questioning his ethics are unlikely to do more than trim his margin of victory.
Some said the latest furore could be more aimed at April's parliamentary elections when the liberals face an uphill struggle to hang on to control of the National Assembly as voters appear to be shifting in favour of conservative politics after 10 years of liberal presidents.
That ploy, said executive director of policy research at MIN Consulting Jeong Chan-soo, could be a risk for the Chung camp.
"If Lee turns out to be cleared of all charges again, the ... (liberals) will no longer have anything to go with in the April elections."
Though Lee looks set to become the first president-elect to face a criminal investigation, its results are unlikely to be completed until after a Feb. 25 inauguration.
That means he would be immune from prosecution during his single, five-year term though his political opponents would almost certainly seek to impeach him, which would be difficult if Lee's party also wins control of parliament.
But analysts said if he is found to have been involved, Lee's authority as president would certainly be hurt.
"The moral deficiency issue will undermine his leadership," said Lee Nae-young, political science professor at Korea University.
Added Lee Jin-woo, currency research head at N.A.C.F. Futures Co: "If he is found guilty or of being involved in something wrong, it will of course increase uncertainty about the Korean financial markets and society."
South Koreans will elect a new president on Wednesday to serve a single five-year term as head of the world's 13th largest economy.
Here is a glance at the race:
Main Candidates:
Lee Myung-bak, who turns 66 on election day, is the front-runner and candidate of the conservative opposition Grand National Party (GNP). He is a former top executive of the Hyundai Group and was a popular mayor of Seoul.
Chung Dong-young, 54, is a distant second. He is the candidate of the left-leaning, ruling United New Democratic Party who was once a TV newscaster and served in the current government as the cabinet minister responsible for North Korea affairs.
Lee Hoi-chang, 72, is third. He is a staunch conservative who ran and lost twice as the GNP's candidate in 1997 and 2002. He is running as an independent.
Poll Numbers
Support rate from daily newspaper Chosun Ilbo poll published on December 13, the last allowed by law before the election: Lee Myung-bak 45.4 percent, Chung 17.5 percent, Lee Hoi-chang 13.6 percent.
Top issues for voters from national daily Hankyoreh poll published on Dec. 3: Economic management 43.5 percent, employment 17.3 percent, social welfare 14.3 percent, education 11.5 percent, real estate prices 6.8 percent, North Korea policy 3.2 percent.
Main Policies:
Lee Myung-bak wants to cut regulations on business, tempt more foreign investment and clamp down on illegal strikes. He has pledged to take a tough line on North Korea and tie aid to progress it makes on ending its nuclear arms programme.
Chung wants to increase welfare spending and use the government to help make industries such as aerospace and robotics become drivers of the economy. He advocates a steady flow of aid to North Korea and expanding joint cooperation projects.
Lee Hoi-chang promises to have the toughest line on North Korea. He wants Pyongyang to return several hundred South Koreans it has kidnapped.
Election Day Outline:
Voting ends at 6 p.m. local time (0900 GMT). Voting age is 19 and there are 37.67 million voters.
Television networks usually report their projected winner based on exit polling shortly after voting ends. The National Election Commission said it expects to have most of the results released by about 10 p.m. (1300 GMT).
The new president takes office on Feb. 25.
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