[Inside Chodong] The Power of Civic Groups Comes from Transparency

Neglected Subsidy Management: No One Knows Where the Money Goes
Good Intentions Alone Cannot Convince the Public if the Process Is Flawed

The civic group Justice Memory Solidarity (Jeonguiyeondae), which faced controversy in 2020 over the use of donation funds, responded to demands for detailed disclosure at the time by saying, "Which NGO (non-profit organization) in the world discloses its activities in detail?" This response sparked even greater public outrage. Even then, there was a law that allowed for deregistration if donation funds were used for purposes other than those intended or if false disclosures were made. However, Jeonguiyeondae made excuses such as "it's too harsh," and was reported by other civic groups for embezzlement of donations, with additional allegations of fraudulently receiving subsidies from the government and the Seoul Metropolitan Government.

Three years have passed, but nothing has changed. After the regime changed and an investigation was conducted, it was found that the taxes I paid were still being used inappropriately. Among the 6.8 trillion won in national subsidies paid to about 12,000 civic groups during this period, 1.1 trillion won worth of projects were found to have 1,865 cases of fraud and corruption. The confirmed amount of misused funds alone was 31.4 billion won.

The cases of fraud and misconduct involving the people's tax money are even more astonishing. During the Moon Jae-in administration, a civic group head who received subsidies from the state and local governments under the pretext of cultural projects, public diplomacy, and youth protection bought a house for their child and gifted a horse to their granddaughter with the money. A Sewol ferry-related group used subsidies to hold seminars that praised the North Korean regime.

This is just the tip of the iceberg. Considering the rapid increase in subsidies to civic groups during the previous administration, there is no need to question this further. Over the five years of the Moon administration, national subsidies to civic groups increased sharply by an average of 355.5 billion won annually, while only 153 problematic projects were detected across all ministries since 2016, with recovered amounts totaling only 3.4 billion won. In effect, these issues were largely neglected.

Fortunately, the president personally stepped in and defined the fraudulent use of subsidies as "a fraudulent act against taxpayers" and "an exploitation of future generations." President Yoon Suk-yeol stated, "The people's tax money is becoming prey to populism," and identified it as something that must be destroyed.

Unlike previous administrations that only pointed out wasteful spending of tax money as a formality, this administration has promised to hold each ministry and public official accountable. It also plans to review the management and supervision system in the subsidy selection and execution process, starting to establish a system that can hold not only project operators but also responsible public officials accountable at the government level.

Despite this situation, the Democratic Party of Korea is pushing the Social Economy Basic Act (Sagyungbeop), which allocates about 7 trillion won annually from government procurement funds to social enterprises and others. This is a social enterprise support measure that allocates 5-10% of the 70 trillion won annual public institution goods and services purchase amount to social enterprises or cooperatives. Since it is a 'law for pouring money into civic groups,' it appears to go against the government's efforts to increase transparency in civic groups and reduce waste of tax money.

Regardless of party affiliation, efforts should be made to inform the public about "where and how the taxes they pay are being used." Not only should the expansion of the 'external audit report submission obligation' for civic groups promoted by the ruling party and government be supported, but the practice of inserting conditions into the Social Economy Basic Act here and there should also stop. If support for social economy organizations is necessary, there is no need to enforce it by law; instead, a path should be opened that avoids reverse discrimination controversies with small and medium-sized enterprises.

Some interpret the government's "comprehensive review of subsidy budgets" merely as "subsidy restructuring," but the priority is to cut out and correct what is wrong. There are concerns that civic group activities will shrink and the autonomy of civil society will be reduced, but the true strength of civic groups comes from "transparency." To monitor government or local government activities and empower voices for the common good of society, legitimacy and transparency must be secured. If the purpose is good but the process is neglected, no citizen will accept the results.