By Choi Sung-jin
Koreans often call state enterprises, or public corporations, “workplaces for gods.” The top administrative watchdog’s recent report on their practices and operations shows why.
Most noticeable is their financial support for retired workers, or their groups, under various camouflages, according to the Board of Audit and Inspection (BAI) report released Tuesday.
Korea Electric Power Corp. (KEPCO), for instance, had consigned regular testing of electricity metering equipment to a company run by its retired workers. At the behest of the Fair Trade Commission, the state utility turned it into open bidding in June last year. The final winner remained unchanged, however.
That was because KEPCO put 85 percent of the work, worth 8.4 billion won ($7.2 million), to one bid, instead of dividing it into several orders. No other bidders were big enough to provide the large-scale services, except for the company of retirees.
KEPCO Engineering and Construction, a subsidiary of the power monopoly, also signed service-providing contracts worth 9.7 billion won with a company comprised of its retirees. The retirees’ company had few technicians or work experience but KEPCO E&C pushed ahead with the contract by registering the unqualified company as its affiliated firm, the audit report said.
KOGAS, the state gas company, entered 223 private contracts amounting to 5.9 billion won over five years with a company invested by its retired workers, violating the rule that calls for competitive bidding.
The Korea Tourism Organization gave 277 million won on 24 occasions over five years to a fraternity group of retirees under the pretext of financing its New Year gatherings, and also provided an office that it leased at 280 million won to the organization free of charge.
At least a dozen other state companies provided similar support, ranging from 22 million won to 178 million, to their respective retiree organizations.
Some even refused to follow directives from the state watchdog and their supervisor, the Ministry of Strategy and Finance, citing “uncooperative unions” and other reasons.
For example, the ministry told KOGAS to exclude optional welfare expenses from calculating average wages in July 2014. The state gas supplier, however, made a dual contract with its labor union to set up a new service allowance based on the welfare expense, kept it secret and reported to the ministry as if it had rectified the violation.
Incheon International Airport Corp. paid for overtime meals for employees who did not do overtime, receiving a warning from the BAI. But airport authorities continued to pay for overtime meals of 544 million won to workers who did not do overtime, from October 2014 to June 2015.
KORAIL was told to correct its practice of reducing or exempting ticket charges for its workers and their families but still is dragging its feet to rectify it citing the union’s opposition.
Some researchers at KOGAS were found to have given outside lectures without prior reporting in the previous audit but committed the same violation in the recent audit. Seven of them applied for and received 1.29 million won as travel expenses for their unreported lecturing, the report said.
“Unless the government roots out these ‘tax thieves,’ President Park Geun-hye’s anticorruption drive can’t help but ring hollow,” a civic activist said.