Financial Services Commission Audit Officer: "No Notification to Cheongwadae About Yoo Jae-su's Misconduct"

Testimony Somewhat Contradicting Cho Kuk's Claims
Yoo Jae-su Ultimately Promoted to Vice Minister Level

Defense Attorney: "Post-Handling by Financial Services Commission Is the Issue"

[Asia Economy Reporter Seongpil Jo] The Financial Services Commission's Audit Officer testified in the trial regarding former Minister of Justice Cho Kuk's alleged 'cover-up of inspection' case, stating, "I have never been informed by the Blue House about the inspection facts or results concerning Yoo Jae-soo, then Director General of the Policy Bureau at the Financial Services Commission." The Blue House's Special Inspection Team under the Office of the Senior Secretary for Civil Affairs typically notifies the affiliated institution if misconduct by a high-ranking public official is confirmed. However, despite confirming Yoo, the former Deputy Mayor for Economic Affairs of Busan, had committed misconduct, the Blue House did not formally notify the Financial Services Commission, Yoo's affiliated institution. At that time, the Senior Secretary for Civil Affairs was former Minister Cho Kuk.

Former Minister of Justice Cho Kuk is attending the continuation trial related to allegations of inspection cover-up held at the Seoul Central District Court in Seocho-gu, Seoul on the 11th. Photo by Hyunmin Kim kimhyun81@

Prosecution: "Yoo Jae-soo's Promotion Possible Because Civil Affairs Office Did Not Notify Misconduct"

On the 11th, during the trial of former Minister Cho Kuk and others regarding the alleged cover-up of inspection, held at the Seoul Central District Court Criminal Division 21 (Presiding Judge Kim Miri), Kim, an audit officer of the Financial Services Commission, appeared as a witness. Kim served as an audit officer even in 2017 when Yoo was Director General of the Policy Bureau at the Financial Services Commission.

When asked by the prosecution whether he had ever been informed that Yoo had been inspected by the Blue House's Special Inspection Team or about the results, Kim answered "No." He testified that he heard about Yoo's misconduct through media reports and unverified rumors.

Kim also stated that he had never heard that Kim Yong-beom, then Vice Chairman of the Financial Services Commission and a witness in this trial, had been told by Baek Won-woo, then Secretary for Civil Affairs at the Blue House, that "most of the suspicions regarding Yoo's inspection had not been resolved, so please consider this in personnel matters." He said he learned this while preparing for the February 2019 National Assembly audit response. He added that personnel reference materials are usually delivered in the form of official documents, with attachments specifying the details of the misconduct.

Kim's testimony somewhat contradicts the claims of former Minister Cho Kuk's side. Cho's side has argued that although the Special Inspection Team confirmed Yoo's misconduct, Yoo did not cooperate with the inspection, and since the Special Inspection Team lacks compulsory investigative authority, it had no choice but to conclude the inspection. They claim that the fact was then notified to the responsible institution, the Financial Services Commission, which took measures to have Yoo submit his resignation.

Unaware of the inspection facts, the Financial Services Commission later recommended Yoo, then Deputy Mayor, for the position of Senior Specialist at the National Assembly, equivalent to a vice-ministerial level. Since the Financial Services Commission's audit officer was not notified of the misconduct, Yoo was able to be promoted to a vice-ministerial level.

Former Busan Deputy Mayor for Economic Affairs Yoo Jae-su [Image source=Yonhap News]

Defense: "We Notified the Financial Services Chairman... What Happens Next Is the FSC's Responsibility"

During cross-examination, former Minister Cho Kuk's side argued that the failure to notify the Financial Services Commission's audit officer of the inspection facts or results was not their responsibility. They claimed that since they informed then Financial Services Chairman Choi Jong-ku of Yoo's misconduct, the subsequent handling was entirely the Financial Services Commission's jurisdiction.

The defense's question was, "If you notified the chairman and vice chairman that unresolved issues remained, wouldn't it be natural for the Financial Services Commission to resolve them?" Kim responded, "It is important who first accessed that information. If the chairman and vice chairman accessed it first, they would instruct to investigate if further inspection was necessary."

When asked whether the Financial Services Commission has independent inspection and disciplinary authority, Kim said, "It is possible to conduct independent inspections on employees," but added, "For grades 6 and below, disciplinary action is possible, but for grade 5 and above, cases must be sent to the Central Disciplinary Committee." Yoo, as Director General of the Policy Bureau at the Financial Services Commission, was classified as a high-ranking official.

When asked whether, given that former Chairman Choi Jong-ku testified that the notification to consider in personnel matters was official and the final inspection result, the Financial Services Commission should have initiated its own inspection, Kim replied, "It depends on the case. If the chairman thought additional inspection was necessary, he would have instructed it; if not, it would have been concluded internally." He added, "I have never received inspection instructions from the chairman or vice chairman."

When asked whether, given widespread rumors of misconduct, something should have been done to investigate specifically, Kim answered, "I do not feel the need to inspect based solely on rumors. Procedures are followed when specific reports come in; you cannot conduct inspections based only on hearsay."

When asked if he had ever been instructed not to conduct an internal inspection, Kim answered "No." This question was based on the defense's argument that the case was not a cover-up.