483 Former LH Employees ("LPhia") Secure Contracts Worth 800 Billion Won

Controversy Grows Over "Revolving Door Cartel" Among Companies Involved in Poor Practices and Collusion
Joonho Jung: "A Comprehensive Investigation Is Needed to Break the Chain of Corruption"

Junho Jung, member of the Democratic Party of Korea.

Companies staffed heavily by former employees of Korea Land and Housing Corporation (LH) have been winning a significant number of LH projects, reigniting criticism over a so-called "revolving door cartel."

On October 14, Junho Jung, a member of the Democratic Party of Korea representing Gwangju Buk-gu Gap, released the results of a comprehensive survey on the current status of LH retirees. The survey found that 483 former LH employees (referred to as "LPhia") are currently working at 91 companies that have won LH projects since October of last year. These companies have secured a total of 355 contracts worth 809.6 billion won over the past year.

Although LH established a retiree registration system in 2023 following the rebar omission scandal, many former employees have avoided restrictions due to the narrow definition of "revolving door personnel" under the Public Service Ethics Act (limited to those who retired within three years and held positions of grade 2 or higher or executive roles). It has even been revealed that companies penalized for unfair practices-such as fines or business suspensions-have continued to win LH contracts, sparking public outrage.

In particular, among 20 architectural firms fined a total of 23.7 billion won by the Fair Trade Commission for bid rigging, three employ a total of 38 former LH staff. At one such firm, referred to as "Gwang○," 26 former LH employees serve as executives, including vice presidents and managing directors. This company has previously been suspended for poor supervision in incidents such as the "Sunsal Apartment" collapse in Incheon and the "Hwajeong I-Park" collapse in Gwangju.

Another company, "To○," which led supervision collusion and was fined 3.1 billion won, employs 10 former LH executives, further exposing the structural problems linking poor oversight and collusion to revolving door networks. If the remaining 17 firms are thoroughly investigated, the scale of the LH revolving door cartel is expected to be much larger.

In April, the Fair Trade Commission sanctioned 20 companies, including Heerim and KD, for colluding on public building supervision bids for LH and the Public Procurement Service, identifying 556.7 billion won in unjust gains and pointing to these practices as a cause of rising public housing prices. Nevertheless, LH has maintained an irresponsible stance, stating that since the retiree registration system was only implemented in October of last year, it cannot determine the revolving door status of those involved in earlier bid rigging cases.

Jung emphasized, "Even though LH's public role has been strengthened through the direct implementation of project structures, its commitment to reform remains insufficient. Since the LH Reform Committee will be discussing institutional improvements through the end of the year, a thorough investigation of all companies involved in rebar omission and bid rigging-and, further, a comprehensive review of the entire construction industry-is necessary to identify the full extent of the LH revolving door network and eradicate the pervasive structure of corruption."