National Assembly Members' Financial Reports... Lack of Consistency and No Regular Disclosure [Leaking Donations]⑫

Same Issue, Differently Reported and Sometimes Incorrectly
Lack of Consistency, Specificity, and Expertise in Financial Reports
Short Disclosure Period and Difficult Access to Accounting Data

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 transparent use of political funds. What is the actual situation? Asia Economy requested information disclosure from the National 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 commissions, and also conducted on-site reporting. We also uncovered the reality that the election commissions do not properly verify accounting reports. We focus on verifying and reporting on the use of political donations 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 wine bars, hotels, and famous restaurants in Gangnam... '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 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 Why is the support fund account negative near term end? ⑩ What to do with YouTube channels grown with political funds ⑪ The practice of last-minute disposal remains... Remaining political funds average 128,000 won per person ⑫ No consistency, no regular disclosure... National Assembly members' accounting reports

It has been identified that the political donation accounting reports of National Assembly members often record similar expenditure items in different ways or contain errors when reported to the election commission, indicating a lack of uniformity and professionalism. Moreover, the disclosure period is short at six months, and since one must visit the central election commission office or obtain copies, it is pointed out that monitoring is not easy.

According to the accounting reports submitted through information disclosure requests from the National Election Commission and regional election commissions for 144 members of the 21st National Assembly at the end of their terms, it was found that each office records political donation accounting reports in various ways. While maintaining uniform terminology is fundamental for consistency and transparency in accounting, political donation accounting reports still fall short of accounting standards.

For example, when recording meetings combined with meals, the standard method is to specify the purpose of the meeting such as "lawmakers' meeting for OOO" along with the names and number of attendees. However, Representative A only noted the purpose, such as "lawmakers' meeting for OOO" or "press meeting for XXX." Representative B generalized multiple meetings simply as "meeting." Because the number of attendees or their names are not recorded, the general public cannot determine the purpose or participants of the meetings from the lawmakers' accounting reports, making it difficult to assess whether the expenditures were appropriate.

In the case of fuel expenses, terms like "fuel for legislative activity vehicles," "refueling costs," and "fuel expenses" are used interchangeably. Many offices generalize product purchases as "legislative activity supplies," making it impossible to know the product names and thus difficult to verify the appropriateness of the expenditures. Some offices provide detailed annexes listing property details and processing results, but many leave these annexes blank or omit processing results.

In both cases, although receipts and processing details are said to be attached during the election commission reporting process, the general public cannot verify receipt details when receiving copies of the accounting reports, requiring separate inquiries to the election commission to check for errors, which is cumbersome. Additionally, many lawmakers spend personnel expenses under the pretexts of legislative assistance and regional management, but since they habitually record these as paid staff salaries or position allowances, specific details are often unavailable.

Lack of expertise is also evident in many places. Some offices confused asset accounts such as candidates' assets with donation accounts when preparing accounting reports, resulting in discrepancies in political fund usage amounts. Some reports also recorded expenses related to election campaigns under political fund items other than election costs. Since the reports are prepared using single-entry bookkeeping for income and expenditure, liabilities such as loans are recorded as donation income and expenditure, causing unclear progress.

Although the election commission distributes related booklets and conducts training for accounting officers, criticism arises because accounting officers are not experts and National Assembly members' accounting reports do not require certified public accountants' audit opinions, reducing completeness. According to Article 41, Paragraph 1 of the current Political Funds Act, central parties and support groups must attach audit opinions from certified public accountants belonging to their own audit institutions, but National Assembly members' political donation accounting reports do not require such audit opinions. Due to the excessive investigation volume near term end and short audit periods, thorough audits by the election commission are difficult, and there are gaps as there are no external audit regulations for lawmakers' offices.

Professor Yoo Sung-jin, director of the Civic Solidarity for Participation's Legislative Monitoring Center and a professor at Ewha Womans University Scranton Division, said, "Private institutions such as companies go through multiple procedures to meticulously prepare and audit reports on business promotion expenses," adding, "However, National Assembly members' accounting reports fall short in this regard," pointing out the lack of transparency and professionalism.

The short disclosure period of six months is also cited as a problem. Previously, in May 2021, the Constitutional Court ruled that "the restriction on the viewing period violates the principle of balance of legal interests because the infringement on private interests outweighs the public interest achieved by reducing the election commission's workload," declaring unconstitutional Article 42, Paragraph 2 of the old Political Funds Act, which required political fund income and expenditure details and attached documents to be kept at the election commission office and disclosed for three months from the announcement date. The court ruled that the National Assembly should amend the provision because monitoring political funds of lawmakers is more important than the convenience of the election commission.

However, it remains difficult for the general public to access lawmakers' political donation accounting reports. Even after the Constitutional Court's decision, the legal provision remained unchanged for over two years and was only slightly amended in February before the general election to extend the viewing period to six months from three months. This was limited to six months to align with the statute of limitations under the Public Official Election Act. Political donation accounting reports must be viewed by visiting the election commission office or obtained via information disclosure requests as stipulated by the Political Funds Act, so unlike high-ranking officials' asset disclosures, there is no system for constant online access through public official ethics systems or official gazettes.

Therefore, if the Jigu Party is revived, the number of political donation accounting reports to be submitted to the election commission will more than double, but the viewing period will remain short, making it even more difficult to monitor politicians' use of donations. Han Dong-hoon, leader of the People Power Party, and Lee Jae-myung, leader of the Democratic Party of Korea, have expressed consensus on reviving the Jigu Party, citing "politics closely connected to public sentiment" as a rationale, but paradoxically, it is likely to become more challenging to monitor politicians. Professor Yoo said, "Accounting reports should be made permanently accessible so that voters can monitor them."