[Leaking Donations]⑮ Experts: "Increase Transparency by Disclosing Financial Reports in Real Time"

Need for Real-Time Accounting Reporting System Implementation
More Detailed Regulations Required for Usage Sources

Editor's NoteIn the past, the reason for abolishing the Jigu Party was due to illegal political funds. Recently, the two major parties have been pushing for the revival of the Jigu Party. The prerequisite for the revival of the Jigu Party is the transparent use of political funds. What is the actual situation? Asia Economy requested information disclosure from the Central Election Commission and regional election commissions and secured six months' worth of accounting reports before the expiration of the terms of 144 members of the 21st National Assembly. These individuals are now former lawmakers. Based on the secured data, we prioritized verification items by examining the appropriateness of expenditure purposes and usage locations. We confirmed with the parties involved and the election commission, and also conducted on-site reporting. We also uncovered the reality that the election commission does not properly verify accounting reports. We focus on verifying and reporting on the use of political funds by lawmakers near the end of their terms. ① Spending millions of won on office supplies at a kimchi factory logistics warehouse ② Used for meals at Gangnam wine bars, hotels, and famous restaurants... 'Meetings = Gourmet tours?' ③ Retirement pay is illegal... 'Retirement consolation money' is legal ④ Large-scale holiday gifts to fellow lawmakers with political funds ⑤ Spent 10 million won 10 days before term expiration and went on a solo trip to the U.S. ⑥ Large legal fees spent despite the election commission's 'no problem' response ⑦ Spent millions on supporting fellow politicians ⑧ Political funds treated like petty cash? Paid traffic violation fines ⑨ Political fund account in the red near term end? Why? ⑩ What to do with YouTube channels grown with political funds ⑪ Clearance sale practices still exist... Remaining political funds average 128,000 won per person ⑫ Lawmakers' accounting reports are difficult for voters to monitor ⑬ Confessions of accounting officers' conscience: "Accounting reports are number games" ⑭ Eleven lawmakers who complied with the Political Funds Act and returned leftover funds to their parties ⑮ Experts say "Accounting reports should be disclosed in real time to enhance transparency"

Article 1 of the Political Funds Act aims to contribute to the sound development of democratic politics by ensuring the proper provision of funds. However, an investigation by Asia Economy into the 'Income and Expenditure Reports of the 21st National Assembly Members before Term Expiration,' obtained through an information disclosure request from the Central Election Commission, revealed widespread lax management, including private and illicit use of funds and errors in recording income and expenditures. Experts unanimously emphasized securing 'transparency' as the core of political fund management. However, opinions differed on the methodology to achieve this.

In an interview, Lee Kwang-jae, Secretary-General of the Korea Manifesto Practice Headquarters, stressed, "Political funds should be raised naturally, but their usage should move toward the principle of 'real-time disclosure'." He explained, "Introducing a real-time accounting reporting system can fundamentally prevent various errors that might be overlooked as minor issues such as misstatements in accounting reports."

Secretary-General Lee said, "When discussing political funds, academia and civil society emphasize transparency in fund usage above all," adding, "In countries like the UK, misuse of corporate cards has led the Labour Party to hand over power to the Conservative Party." He pointed out, "However, in Korea, there seems to be a moral hazard among lawmakers, thinking that political funds are not transparently disclosed or reported, and that 'if caught, it's a crime; if not, it's okay.'"

He questioned, "When we advocate for real-time disclosure of accounting reports to the Central Election Commission, they cite manpower shortages and other difficulties," adding, "If real-time management is difficult due to manpower shortages, shouldn't the commission expand its organization to secure transparency?"

Choi Dae-kwon, Professor Emeritus at Seoul National University Law School, emphasized, "As part of reducing lawmakers' privileges, the use of political funds should be clarified more precisely." The Central Election Commission interprets that the use of political funds for holiday gifts and retirement consolation money for aides is permissible within 'customary limits.' Professor Choi believes that more detailed regulations are needed for ambiguous fund usage sources depending on legal interpretations.

Conversely, some argue that transparency should be enhanced by focusing more on the sources of incoming (income) funds rather than expenditures. Shin Yul, Professor of Political Science and Diplomacy at Myongji University, said, "The concept of political funds is very broad, so most expenditures are made within legal boundaries," adding, "However, there is a possibility that money coming in covertly is used as political funds. More effort is needed to verify this."

Professor Shin emphasized, "For example, no one, including the election commission, knows how much money is exchanged at politicians' book launch events," adding, "Such money can be used as political funds. Accurate verification is necessary." He explained that focusing more on income items?where the money was received from, which is not captured in accounting reports?can enhance transparency.

The election commission also stressed the need for real-time disclosure of income and expenditures to increase the transparency of accounting reports. An election commission official said, "From 2012 to 2021, we submitted related amendment opinions to the National Assembly four times to strengthen the transparency of political funds," adding, "This involves disclosing detailed income and expenditure information on the internet."

In fact, the election commission's opinion submitted to the National Assembly on May 25, 2021, titled 'Continuous Internet Disclosure of Political Fund Income and Expenditure,' specifies that "Central parties (including central party founding committees) and their support groups, city/provincial parties, and lawmakers with support groups must disclose detailed monthly political fund income and expenditure (excluding expenditure proof documents) on the election commission's public system by the 5th of the following month. Failure to disclose on the internet will result in fines." However, the commission added, "To build such a system, practical support such as budget expansion will be necessary."