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Ministry Launches Aid Fraud Probe

Posted December. 07, 2006 07:04,   


On December 6, the Ministry of Unification began a special investigation into whether humanitarian aid groups for North Korea submitted false documents in order to apply for government grants from the South-North Cooperation Fund.

The investigation is a response to Dong-A Ilbo’s report on December 6 about an aid group for North Korea. The report said that a civic organization deposited 470 million won in last December into an account of B, a hand cart manufacturer, for 12,000 hand carts, which it insisted that it planned to send to the North as part of a humanitarian aid project. After it turned the receipt in to the Ministry of Unification and was given 240 million won from the ministry, the civil group allegedly withdrew 470 million won from B’s account immediately.

The ministry on December 6 stated that after investigating the aid group and the manufacturer, it will decide whether to impose administrative measures, including taking back the money or referring the case to the prosecutor’s office.

The ministry is reportedly contemplating revising the subsidy rules, given that some civil organizations took advantage of the matching fund system. Under the matching fund system, the ministry allocates government grants in proportion to the amount of the funds raised by the applicant civil groups. If necessary, it will launch an investigation into other subsidy beneficiaries whether they have fabricated applications for government subsidies or abused the money.

The civil group insisted that it had financed 0.3 billion won by donation for the wheelbarrow bill worth 0.6 billion won total that it owed B company in its application documents. But the ministry is set to scrutinize whether the civil group had forged applications in a bid to obtain more money from the government when it actually was given material donation instead of money.

Under the matching fund system, the Ministry of Unification subsidizes only ten percent of total material donation while allocating a maximum of fifty percent proportionately to the fund size that applicant civil groups raise in cash donation.