[The Police File]Court Also Recognizes the Major Union's 'Opaque Accounting'

Unending Embezzlement Cases of Union Dues

Refusal to Disclose Accounting is an Admission of Opacity

Accounting Transparency Cannot Be an Exception

"The union has grown into an organization where over 10,000 members pay union dues amounting to tens of billions of won, yet without establishing transparent accounting standards, the union dues were misappropriated, causing frustration and anger among the members."

This was pointed out by the court in the first trial of a case where a union official was indicted for embezzling about 800 million won of union dues on December 21 last year. Mr. A, who served as the chairman of the Construction Union under the Federation of Korean Trade Unions (FKTU), was indicted on charges of embezzling 750 million won in union dues and 41 million won in welfare funds over three years from 2019 to 2021 by withdrawing cash from the union dues account for personal use or giving bonuses to the union executive team and then receiving the money back in cash. The court recognized most of the charges and sentenced Mr. A to four years in prison.

Embezzlement cases within unions are not new. Mr. B, a former branch chief of the Public Transport Union under the Korean Confederation of Trade Unions (KCTU), was sentenced to two years and six months in prison for embezzling 370 million won in union dues over nine years from 2011 to 2020, using the money for entertainment and personal expenses. He also disguised branch operational expenses to misuse union executives’ overseas travel costs. Another KCTU official, Mr. C, was sentenced to one year in prison in 2021 for using 75 million won of union dues for gambling and other expenses.

The continuous corruption such as embezzlement and squandering of union dues on entertainment is largely due to the lack of ‘transparent accounting standards,’ as pointed out by the court. Both the KCTU and FKTU do not disclose how their own budgets, including union dues, are spent. These two major trade union federations receive over 30 billion won annually in subsidies from the government and local governments. Including direct and indirect support such as tax benefits, the total reaches about 100 billion won per year. All of this is public tax money. However, the unions do not even comply with the legal obligation to disclose their accounting. Minister Won Hee-ryong of the Ministry of Land, Infrastructure and Transport has remarked that the accounting of the two major unions is "worse than a neighborhood social club."

The recent government demand for unions to submit accounting records is aimed at correcting the unions’ ‘opaque accounting.’ However, the two major unions are resisting, calling it ‘union suppression.’ The Ministry of Employment and Labor sent official letters requesting accounting data to 327 domestic unions and union federations with over 1,000 members, but only 120 organizations (36.7%) responded. The ‘non-cooperation directive’ from higher bodies such as the KCTU and FKTU led to organized non-compliance. On the 17th, the FKTU issued a directive to its affiliated organizations to ‘refuse additional government requests for data submission and not voluntarily pay fines.’ The KCTU also stated that it "will not comply with the Ministry of Employment and Labor’s corrective guidance."

Refusing to submit accounting records is itself an admission by the two major unions of their ‘opaque accounting.’ Transparency in accounting management is a fundamental principle that must be upheld even by the smallest organizations. Accounting transparency where public tax money is used is not an exception for unions or any other institutions. Yet, the two major unions tightly guard their own ledgers as if they were ‘sacred ground.’ Without any external oversight, even if they embezzle billions of won in union dues, the members remain unaware. Outwardly, they claim to represent workers’ interests, but inwardly, they hide their accounting books and are obsessed with securing private gains. Who among the public would accept tax support for such unions?