Gwangju citizens want ex-mayor to bear responsibility for fraud

Failed culture project costs $10.5 million in taxpayers’ money

By Kim Se-jeong

Kang Un-tae

Citizens in Gwangju are up in arms over the city government’s recent decision to drop a lawsuit against a U.S.-based company. The firm used taxpayers’ money to finance a culture project which ultimately ended in failure, costing 11 billion won ($10.5 million).

Because the project was launched and carried out under former Mayor Kang Un-tae, citizens want him and city officials to be held responsible.

In a statement, Wednesday, the Gwangju Citizens Coalition for Economic Justice said, “We call on the city government to seize assets of the former mayor and others involved in the fraudulent project to cover the loss. Also these officials deserve punishment for wasting taxpayers’ money.”

The coalition also criticized incumbent Mayor Yoon Jang-hyun for attempting to cover up the failure, which it said is “intolerable.”

The angry reaction came one day after the city government said it would drop a lawsuit filed in 2012 against K2AM, the U.S. firm that conducted the joint culture project in 2011.

The city government, in an attempt to boost their video content industry, created a joint venture called GAMCO. The Gwangju Information & Culture Industry Promotion Agency (GICIPA) spearheaded the project with K2AM as its partner.

The goal was to bring in high-end equipment for 3D conversion and hard drive upgrades from existing equipment so that the southwestern city could attract more content developers worldwide.

The city government invested the 10 billion won ($9.6 million) in seed money and between January and July 2011, the GICIPA transferred a portion of that money ― $6.5 million ― to its American partner. In September 2012, the city government made additional investment of $700,000.

However, the firm never delivered what it had agreed upon. The promised hardware never arrived, and the company kept delaying a test run to show off the new 3D converting technology, saying it needed more money to prepare.

Finally, the city government filed a suit, demanding the return of the money.

However, it announced that it has decided to drop the lawsuit, citing the low possibility of winning, and that the case could take up to five years to resolve. It also added both parties have reached a compromise.

In the announcement, the government also apologized for the unprofessional handling of the investment.

“We are sorry for having failed to supervise and inspect the GAMCO project properly and the mishandling of city funds,”

Civic groups say they are outraged over the government’s negligence in punishing former Mayor Kang and members of the team that lead the project.

Last year, Kang was also investigated for fabricating documents during the city’s bid to host 2019 World Aquatics Championships.