Saemangeum Development Agency Stops Public Disclosure Since September 2021
Annual Controversies Over Misuse of 'Business Promotion Expenses'
Despite President's Call for 'Transparency', Issues Remain Vague
[Asia Economy Sejong=Reporter Song Seung-seop] Calls for transparency in business promotion expenses (official expenses) have been repeated for decades. Although the money is managed with the people's taxes, the detailed breakdown is not properly disclosed, leaving a large possibility of it being used as 'blind money.' Even former presidents have promised transparency, but controversies surrounding business promotion expenses continue due to lax system management. Experts have argued that the related laws on business promotion expenses need to be revised.
On the 5th, Asia Economy investigated the recent disclosure status of business promotion expenses at the Presidential Office, the Prime Minister's Office, and all government agencies (18 ministries, 4 offices, 18 agencies, 6 committees), and found some departments that either did not disclose business promotion expenses at all or operated them inadequately, taking advantage of the lack of oversight.
Saemangeum Development Agency without Business Promotion Expense Disclosure... "Fiscal Year Change or Simple Mistake"?
Kim Kyuhyun, Administrator of Saemangeum Development Agency (left), and Yoon Soonhee, Deputy Administrator
The Saemangeum Development Agency itself was not smoothly disclosing business promotion expenses. The last disclosure of the business promotion expenses for the head and deputy head was on October 4, 2021. Even then, the expenses from May to August were posted all at once. There is no way to know what expenditures Kim Gyu-hyun, the current head of the Saemangeum Development Agency, and Deputy Head Yoon Soon-hee have made with public funds since last year.
The Saemangeum Development Agency explained, "It seems that the disclosure posted was taken down because the fiscal year changed," and added, "We will repost it tomorrow or the day after." Their explanation was that since the year changed, they took down the disclosure to review the 2022 business promotion expenses. Regarding the omission of disclosures from September to December 2021, they responded, "An employee made a mistake." Even if the Saemangeum Development Agency's explanation is correct, it is difficult to avoid criticism that the expenses were managed inadequately.
Moreover, key executives of the Saemangeum Development Agency such as the Planning and Coordination Officer, Director of Development Projects, and Director of Development Strategy continue to post monthly disclosures despite the fiscal year change, unlike the heads. This makes the explanation suspicious. A Saemangeum Development Agency official said, "It might be because they belong to different departments." When asked about the connection between the fiscal year change and taking down the business promotion expense disclosures, they said, "It seems they did it with the thought of making a final confirmation."
Annual Controversies over 'Business Promotion Expenses'... Prosecution Litigation Ongoing for 3 Years
Won Hee-ryong, the nominee for Minister of Land, Infrastructure and Transport, is attending the confirmation hearing held at the National Assembly on May 2 last year, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@
The National Security Council and the National Science and Technology Advisory Council also do not disclose business promotion expenses. The chairperson of both councils is the president. In the case of the National Science and Technology Advisory Council, government ministry directors and private members are appointed as members. If business promotion expenses were used according to related meetings, each individual entity should disclose them, and even if not used, the information should be disclosed. In fact, the Democratic Peaceful Unification Advisory Council, a similar organization, partially discloses its business promotion expense usage.
As a result, corruption controversies and lawsuits surrounding business promotion expenses still arise. Minister of Land, Infrastructure and Transport Won Hee-ryong was embroiled in controversy over 'splitting business promotion expenses' during his confirmation hearing in May last year. At that time, the opposition party raised suspicions that Minister Won paid for meals for more than ten people at a restaurant with limited seating during his time as Jeju Province governor or made multiple payments at the same place. Minister Won explained, "There is nothing problematic about the expenditures."
The Supreme Prosecutors' Office and the Seoul Central District Prosecutors' Office have been engaged in litigation for over three years demanding the disclosure of special activity expenses, specific business expenses, business promotion expense execution details, and supporting documents for expenditures. Ha Seung-soo, the lead attorney of 'Catch the Tax Thieves,' who filed the lawsuit, won the first and second trials. The Supreme Prosecutors' Office and Seoul Central District Prosecutors' Office appealed to the Supreme Court at the end of last year, dissatisfied with the rulings.
Even with the President Calling for 'Transparency,' Vague Disclosures Persist
Public disclosure details of the business promotion expenses of current Prime Minister Han Duck-soo (above) and former Prime Minister Chung Sye-kyun (above) (Unit: thousand KRW)
Accordingly, not only civil society but also the political sphere has raised demands for transparent disclosure of business promotion expenses. In 2005, former President Roh Moo-hyun was the first among past administrations to push for the disclosure of official expenses. This was after a civic group requested the disclosure of the "2004 budget and total execution amount of the president and the presidential secretariat's business promotion expenses." At that time, Jeong Sang-moon, then Secretary-General, began the disclosure process, explaining that it was done "according to the principle of transparently disclosing everything about (President Roh)."
However, during the Lee Myung-bak administration, the guidelines for disclosing business promotion expenses regressed. Former Prime Minister Go Geon, who served under the Roh Moo-hyun government, had prepared guidelines to expand disclosure of financial and administrative information through 'Prime Minister's Directive No. 442,' but these were abolished. Although this was intended to integrate obsolete regulations into related laws, provisions for original document disclosure to verify expenditure details were removed.
Under the Moon Jae-in administration, efforts were made again to expand the scope and strengthen standards for business promotion expense disclosure. In February 2019, the 'Government Innovation Comprehensive Promotion Plan' was announced, and a year later, government ministries were instructed to disclose business promotion expenses from ministers and vice ministers down to bureau chiefs. The previously voluntary disclosure frequency was clarified to monthly or quarterly. However, even during the Moon administration, former Prime Minister Chung Sye-kyun only disclosed the total execution details and amounts, without properly disclosing detailed itemized information.
"Legal Provisions Need Detailed Revision or Guidelines Should Be Created"
In advanced countries, most expenses are handled like other budget expenditures or detailed related regulations are established. In Japan, there is a category called 'Kyozai-hi' corresponding to Korea's business promotion expenses, which can be used for congratulatory and condolence money, consolation money, and souvenir expenses. These are disclosed monthly, and the disclosure scope includes date, spender, expenditure item, amount, and counterpart.
In the United States, business promotion expenses are allocated only to the president, vice president, and state government heads, and most are small amounts. Most expenditures are handled by the responsible department according to the budget. This means there is no case like in Korea where the head of an institution uses a 'corporate card' to buy meals for more than ten people.
Experts advised that Korea should also revise its regulations. Professor Han Sang-hee of Konkuk University Law School emphasized, "Even under the Information Disclosure Act, the public has the right to request detailed items of business promotion expenses," adding, "If legal provisions are made more detailed, current problems can be resolved, and creating and issuing guidelines is also a method."
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