[Opinion] Minister Chin`s Stock Ownership

Former U.S. President Bill Clinton sealed a blind trust deal with `Paul Rudman Trust` after he took office, assigning the company to manage the stocks and bonds he owned. Under the arrangement, the firm traded the stocks and bonds at its disposal while Clinton served as President of the United States. It did not have to seek approval from the President and was not allowed to notify him of any deals later, either. The ‘Trust’ was supposed to send a summarized asset report on a quarterly basis, but could not specify sources of gain. This was an arrangement aimed to prevent the President from being affected by financial interests while serving the country.

High-ranking officials in the U.S. are required to come clean about any possibility of conflicting interests once they take office. A conflict of interests refers to cases in which officials` job-related judgments go against their own personal interests. The concept applies not only to government officials but also a wide range of government employees including Senate and House members. For instance, if an analyst on Wall Street issues a report, which is unduly in favor of a certain firm, and buys shares of the firm himself, he is seen as violating certain trading laws and is subject to punishment. `The Government Ethics Act`, `the Ethics Reform Act`, `the Senate Ethics Codes` and `the House Ethics Codes` all make detailed provisions concerning this. It is an institutional arrangement designed to prevent corruption in the capitalist system.

In contrast, this country has yet to establish provisions governing conflict of interests. Lawmakers often times work for a National Assembly committee that monitors issues related to their personal interests. There was an occasion that a lawmaker wielded undue pressure against a rival of the business he owned. To address the problem of conflicting interests, therefore, civic organizations recently urged high-ranking government officials to give up stock ownership. As humans, then, officials are faced with a catch-22 – whether to give up their stake in companies or their jobs.

Chin Dae-je, Minister of Information and Communication, refused civic organizations` demands, rationalizing that he did not buy his stake in Samsung Electronics through market trades. Jin, having served as CEO of Digital Media at a leading electronics maker, has a justified reason to have a large stake in the company, and it is legal. Yet, Chin`s explanation seems to be off the mark. The point is not how he acquired the shares, but the fact that he might be affected by stock ownership in this company during policymaking.

“I will seek to implement transparent and fair policies regardless of my stock ownership,” said Jin.

It is not that the U.S. has the institutional arrangement because its officials are without conscience. The key is that people want a minister to be entirely free from any constraints when faced with the ethical dilemma of having to decide between ownership of his company and ownership of the nation’s interests.

Kim Sang-young, Editorial Writer, youngkim@donga.com