The Anti-Corruption Committee Reveals Corporate Corruption Cases

Public corporations’ corruption and moral hazards are at an alarming level.

The Presidential Commission on Anti-Corruption presented Rep. Kim Jae-kyung (Grand National Party), a member of Assembly’s Legislation and Judiciary Committee, with a report regarding four types of corruption cases: building slush funds and wasting expediency funds, making contracts without open competition and giving preferential treatment to certain companies, having nominal auditing procedures under the supervision of a corporate boss, and personnel management at the whims of top management.

The anti-corruption commission produced the report after it scrutinized the transparency of 10 public corporations including Korea Electric Power Corp., Korea Highway Corp., and Korea Land Corp. in alliance with governmental agencies over the last six months.

According to the report, an executive of a corporation received 1.887 billion won from corporate coffers on the excuse of doing business for the corporation’s head. He embezzled a portion of the money for his own private purpose.

Another corporation offered a private car with a driver and money for gasoline to the director of a relevant department of the headquarters.

During the process of selling public land, yet another public corporation who was supposed to receive 500 million won in rent lent the lot for free for a model house to a company.

In human resources management, some bosses and executives gave preferential treatment in the promotion process to the employees they support, and a secretary in the secretariat was promoted right before his retirement without due credit.

Another public corporation was caught operating overseas branches in three areas such as the Republic of South Africa that are not on the corporate organization provision.

Corruption Cases of “Cozy Relations” with Other Companies that have Executives who are Retired from Public Corporations-

A state-owned enterprise contracted out a company with a retired employee on top management to operate the corporation’s electric power facilities for nine years without allowing fair competition from other companies. Another public corporation ignored the illegal activity of its subcontractor diverting an aggregate worth 1.3 billion won.

The report revealed that a department of another public corporation misappropriated 1.47 million won in expediency funds 10 times over two months and spent it to have get-togethers at places like karaoke locales.

Meanwhile, many audit and inspection procedures are ineffective under the helm of the bosses, depriving the corporations of checks and balances and leaving malfeasances of executives unchecked.

The commission said, “At times, the bosses intervene, even in moving employees in personnel, at their own will, ignoring the requests of the personnel department.”

Most public corporations do not audit the headquarters regularly, and among 378 auditing cases last year, only once was a review statement published.

Myoung-Gun Lee gun43@donga.com