“Unconditional Disposal” Versus “Letting the Trust Fund Decide”

▷When discussing whether or not the new law, the Public Servants Ethics Act, will apply to the members of the 17th National Assembly, the key issue is whether the bill will be retroactive. The government announced that “to apply the law to members of the 17th National Assembly who did not know that such law would be enacted, would be applying the law retroactively,” and excluded the members from being subjected to the new law.

Nevertheless, after the government’s statement, Park Geun-hye, chairperson of the GNP (Grand National Party) emphasized that “the law should be applied, starting from the 17th National Assembly members.” In other words, she wants the National Assembly members to set an example.

The Uri Party also declared that “the law should be applied more widely, to include government officials who can exert their influence using their position and related information.”

On the issue of retroactivity, most of the politicians argued that when the “act was in the process of legislation, it defined the subject of the act as ‘National Assembly members possessing stock at the time the law came into action,’” so that retroactivity is not a problem.

▷Controversy regarding the mandatory sales of stock within 60 days

The government proposal mandates the trust company to unconditionally sell a stock within 60 days after the stock is trusted. The GNP protested this, citing “violation of private property rights.”

The GNP’s policy committee vice-chairman, Lee Han-gu, said, “The current stock markets are plunging, yet if the government forces the sale of stock at giveaway prices, then that is a clear violation of our property rights.” Replying to such opinion, the government’s Ethics Commission head of planning, Han In-jung, said, “the blind trust system is basically aimed at disposing of the stock, so if you don’t set a date for disposal, the trust company might be tempted to keep the stock.”

▷Controversy regarding the inclusion of real estate and the selection of subjects

The Uri Party and the GNP argue that real estate should also be included in the blind trust system. Their logic is that real estate should be included in order to be faithful to the purpose of the new bill. The government, on the other hand, excluded real estate because it is difficult to be entrusted--real estate cannot be disposed of on set dates due to its properties.

On June 12, 10 members of the GNP, including Kwon Young-seh, proposed an amendment to the Public Servants Ethics Act, requiring all public officials owning stock in companies that they are related to to leave their stock in a blind trust system. Nevertheless, the government, who set a 50 million won limit for the amount of stock public officials can own, opposes the amendment, saying, “It is difficult to assess whether a high ranking official’s work is related to the company.”

Min-Hyuk Park Jae-Myoung Lee mhpark@donga.com egija@donga.com