South Korea has spent a total of 168.3 trillion won ($183 billion) in public funds since an unprecedented Asian financial crisis hit the country in November 1997. By mobilizing the astronomical sum of taxpayer money, the nation has restored its troubled banking system and reconstructed the once-moribund economy. During the painful restructuring of banks and corporations, many of the recipients of public funds have been under criticism for wasting taxpayer’s money.
On Monday, the government announced a plan to track down the wealth of more than 20,000 former bankers, company executives and bureaucrats who are suspected of misappropriating public funds. We welcome the move as it is seen as a strong intention to retrieve nearly half of the public funds. Official statistics showed that 87.1 trillion won, or 51.7 percent of the entire public funds has so far been recovered. This indicates that many bankers, businessmen and government officials appropriated a large portion of the funds.
It is quite regrettable that such flagrant corruption had taken place in the process of overcoming the economic woes. Those involved in the pocketing of the funds must have forgotten the valuable lesson from the 1997-98 crisis that many scholars and policymakers said was partly caused by corrupt ties between bankers, company executives, and politicians and bureaucrats. Taxpayers are increasingly angry at the triangular link because their money has been not only wasted but also stolen.
People have often said sarcastically that public funds were up for grabs so that anyone could get them for their own sake although they were collected by sucking ``people’s blood.’’ Their cynical attitude reflects how serious the problem of moral decay has become among overseers and recipients of the gratuitous expenditure. The nation can no longer be lenient with those who accumulated wealth by diverting public funds. We have to keep in mind that they are morally corrupt and criminally stigmatized. Law enforcement officials should get tougher with them in order to prevent such criminal acts from persisting.
The government had operated a joint investigation panel to shed light on the misappropriation of the funds for four years from 2002. Several hundred company executives, bank managers, bureaucrats and shareholders were indicted for public fund-related irregularities during the period. Such troubled business groups as Daewoo, Saehan, Nasan, Jinro and Haitai were also found to have cooked up accounting figures in order to get bank loans in illegal ways, while benefiting from creditor-led rescue programs.
Kim Woo-choong, founder and ex-chairman of the now-defunct Daewoo Group, had masterminded one of the nation’s largest fraud cases. In June 2006, a Seoul district court sentenced him to 10 years in prison and 21.4 trillion won in fines for inflating the group’s assets worth 23 trillion won. A higher court commuted the terms to eight years and six months and 17.9 trillion won. CEOs of other dilapidated business groups have also been blamed for leading luxury life by diverting rescue funds for their personal purpose.
The Ministry of Government Administration and Home Affairs has recently provided the state-run Korea Deposit Insurance Corp. (KDIC) with information concerning the wealth of 20,000-odd people suspected of appropriating the public funds. The government ought to conduct thorough investigations into them to recover the public funds.