[Exclusive] LH Public Outrage Spreads... Ruling Party and Anti-Corruption Commission Re-Push 'Public Officials Conflict of Interest Prevention Act'

2013 First Submission to the Anti-Corruption and Civil Rights Commission
‘Public Officials Conflict of Interest Prevention Act’ Gains Momentum
Ruling Party and Details Being Coordinated... Legislative Push After 9 Years
Yang Hyang-ja, Supreme Council Member, “Rapid Discussion, Retroactive Application, Special Act Under Review”

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] To confiscate the speculative profits from land speculation by employees of Korea Land and Housing Corporation (LH) and to prevent recurrence, the ruling party and the Anti-Corruption and Civil Rights Commission (ACRC) are re-promoting the "Public Officials Conflict of Interest Prevention Act" (ACRC proposal), which has been pending for nine years.

The ACRC proposal focuses on recovering profits from real estate speculation and requiring prior reporting. It applies broadly, covering not only the Ministry of Land, Infrastructure and Transport (MOLIT) and public institutions such as LH, but also members of the National Assembly, local government heads, and public officials designated by presidential decree. The ruling party plans to consider "retroactive application" if necessary to recover the unfair gains of the problematic LH employees.

On the 8th, Yang Hyang-ja, a Supreme Council member of the Democratic Party, said in a phone interview with Asia Economy, "We are closely reviewing the appropriateness of the government proposal submitted by the Anti-Corruption and Civil Rights Commission in June last year," adding, "We are examining the details to ensure that speculative profits of LH employees can be recovered, and retroactive application is also under consideration if necessary." Yang also said, "In addition to the ACRC proposal, we are also looking into enacting a special law to recover unfair speculative profits through retroactive application." Jin Sung-jun, a Democratic Party member of the Land, Infrastructure and Transport Committee, also said in a phone interview, "There will be a review of related bills to prevent conflicts of interest among public officials."

Accordingly, the ruling party and the Anti-Corruption and Civil Rights Commission plan to accelerate the passage of the bill along with reviewing the government proposal. Behind-the-scenes coordination on the details of the ACRC proposal and the bill has also begun.

The core of the ACRC proposal, which has been pending in the National Assembly since it was first submitted in August 2013, includes public officials' ▲ obligation to report private interests and recusal from duties, ▲ confiscation and recovery of acquired profits, ▲ restrictions on external activities related to official duties, and ▲ prohibition of acquiring financial benefits through the use of confidential information obtained in the course of duties. It includes not only confiscation of unfair gains but also restrictions on external activities such as real estate lectures by LH employees involved in the controversy. It also contains broad anti-corruption provisions for public officials, including prohibitions on conflict-of-interest contracts, hiring bans, and prevention of corruption, bribery, and solicitation.

(Source: Anti-Corruption and Civil Rights Commission Blog)

Currently, the main laws related to the LH land speculation allegations are the Anti-Corruption Act, the Land and Housing Corporation Act, and the Special Act on Public Housing. However, the Land and Housing Corporation Act and the Special Act on Public Housing have insufficient provisions for recovering speculative profits. Although the Anti-Corruption Act includes provisions for confiscation and recovery of unjust gains, there is a blind spot because the 12 employees under suspicion of LH land speculation were in charge of compensation work, not the 3rd New Town project, making it difficult to prove "job relevance."

Supplementary legislation is also flooding the National Assembly. On the 4th, Democratic Party lawmaker Moon Jin-seok proposed an amendment to the Special Act on Public Housing to impose imprisonment of more than one year and fines of three to five times the amount for public institution employees, including LH, who leak information. On the 5th, fellow party member Jang Kyung-tae proposed an amendment to strengthen penalties to imprisonment of up to 10 years or fines up to 100 million won. On the same day, Kim Tae-nyeon, floor leader of the Democratic Party, said at the Central Election Committee meeting, "Like financial crimes, we are considering imposing fines of three to five times on speculative profits by public officials and will promote this as the top priority bill in the National Assembly in March."