<6> Conceived Korea Newspaper Circulation Service and Fleecing of Tax Money

KONECS Delivery Centers Concentrated in Big Cities Despite Its Promise

The Korea Newspaper Circulation Service (“KONECS”) recently celebrated the establishment of 200 delivery centers. In April 2006, the KONECS opened its first center near Gwanghwamun, Seoul. The continuing efforts of the KONECS will lead to foundation of 296 centers by the end of this year. The KONECS is an arm of the Culture and Tourism Ministry, and received millions of dollars from the central government. Last year, for example, it received a $10.5 million subsidy, and will receive an aggregate sum of $37 million this year. The KONECS in turn covers the rental and other operating expenses for each delivery center up to $80,000.

In setting up the KONECS, the Roh administration promised that every tax dollar spent on it would lead to a more secure delivery network for newspapers and, thereby, providing diverse public opinions and access to the information for the South Koreans living in remote areas. Many people, however, have voiced concern that the government initiative would ultimately impair the free speech and tame the newspapers wishing to get the monetary aid.

The KONECS announced in its newsletter Haedami in its first July 2006 issue that people in secluded and remote areas could soon subscribe to a newspaper of their choice. Most delivery centers, however, are concentrated in metropolitan areas. Scholars all over the nation have criticized the nationalized delivery system. They say that the KONECS strategically uses the centers to smother the delivery networks of major newspapers critical of the Roh administration.

In addition, cases of misusage of the funds and mismanagement of the centers keep springing up to the surface. Eager to establish more delivery centers, for example, the KONECS has granted licenses to unqualified operators in some cases.

Delivery Centers Concentrated Not in Remote Areas, But In Big Cities –

Currently, 83 centers are in Seoul, 67 in Gyeonggi Province, six in Busan City, 12 in Incheon City, four in Daegu City, nine in Daejeon, two in Gwangju City, 13 in Gangwon Province, five in N. Chungcheong Province, 10 in N. Jeolla Province, one in S. Jeolla Province, two in N. Gyeongbuk Province, and one in Jeju Province. Out of a total of 215 centers, the vast majority of them, or 162, is located in the Seoul metropolitan area, and another 21 centers in major cities such as Busan. In total, 85 percent of the centers are not in the remote areas. Furthermore, newspaper companies have long operated their own delivery networks in major cities, or, alternatively, voluntarily operated joint delivery stations. Thus, the KONECS has spent tax money where the efficiency hits the bottom.

In response, the KONECS official said, “By 2010, we plan to set up a total of 235 centers in the Seoul metropolitan area and 330 centers in other regions. From next year, we will focus on localities. After 2010, we have to stand on our own feet without any government subsidies. Therefore, we have to be able to generate profits. To generate profits, we need a firm grip in the big cities, which constitute more than 70 percent of the entire national readership. Otherwise, we cannot serve people in remote areas.”

Contrary to the projection, the KONECS itself admits that most of the centers in big cities have been in red. Consequently, it is likely that establishment of centers in the remote areas remains a remote idea that will never be realized.

Journalism professor Yoo Jae-cheon at Hallym University censures the KONECS and says, “It’s not democratic and legal to spend tax money to build up the newspaper delivery network. The KONECS appears legitimately and lawfully motivated and conceived. In substance, however, the Roh administration conceived it as a tool to smother major newspapers that are critical of the administration and to replace them with tamed minor ones.”

Delivery Centers Operated in Violation of Law –

The KONECS requires each delivery center to carry at least three newspapers and to incorporate two existing stations. This requirement, however, is rarely met.

An owner of an independent delivery center, which carries three newspapers in a southern Seoul area, got a phone call from the KONECS. The KONECS recommended that he transform his business into a KONECS center. It reportedly told the owner that he could form a “nominal” partnership with anyone. The partner should not be a person who has experience in newspaper delivery. Thus, he signed up for the affiliation with his brother-in-law. The owner, however, has not moved into the new office the KONECS has set up for him, and still uses his old nest. “I don’t feel the need to move in. A KONECS guy came and just took photos of the alleged new office. That was all that was needed.”

But the distorted solicitation is worsening day after day. Recently, the KONECS started soliciting owners of independent delivery centers, each of whom carries just one of the major newspapers. A delivery center operator of a major newspaper company informs, “They have lowered the level of the requirement. It’s illegal. But they are twisting their arms to solicit more affiliates.”

Fleecing of Tax Money-

A delivery center owner in Incheon received $80,000 in May from the KONECS in return for his affiliation, but he did not use the money to pay the rent, instead buying a building. He forged documents to show that he used the money to lease an office in the building. The KONECS belatedly knew of this and collected the money from him.

A spouse of an owner of a newspaper delivery center actually operates a KONECS Daejeon delivery center. The KONECS has handed out a $30,000 subsidy to her, but she stays at her husband’s old office instead – another example of the fund misuse.

The story does not stop there. The KONECS covers operations expenses of up to $30,000. Despite examination of the nominal reports, the KONECS has never monitored or supervised whether the money has been used properly. A KONECS center operator says, “They never required an approval or conducted an audit. I see many loopholes.”

Unreasonable Push for Establishment of More Centers –

The KONECS has allocated $32 million out of the total $40 million budget for spending on establishment and operation of delivery centers. It aims at opening an aggregate total of 223 centers. In terms of calendar days, it has to set up at least one center everyday except over the weekends. Even KONECS insiders ridicule the plan. According to them, the plan does not reflect the reality and features of each locality. In Busan, for example, the Busan Ilbo and the Kookje Shinmun have a consolidated and functioning joint delivery system, leaving little room for any KONECS center.

The KONECS spokesperson alleged in response, “We know it’s a little tough, but we have conducted research and think we can make it. We are constantly monitoring how money is spent and how each center is operated.”

[ “Government Employee or Journalist, Empty the Room by Closing Hour!”]

The government, which has been unilaterally pushing for a press-control plan, the so-called “Advanced Media Support System,” launched the removal of the article-delivery room in the main building of the Central Government Complex, Sejongno, Jongno-gu, Seoul, by partly closing down the press-support administration office and the article-delivery room.

An insider of the Korean Overseas Information Service visited the press-support administration office next to the journalists’ room on the fifth floor of the Central Government Complex at around 4:00 p.m. on August 30 and notified the staff to “empty out the place before closing because the press-support administration office will be removed.”

The press-support administration office is where three government employees stay all the time in order to support the correspondents of three ministries including the Ministry of Government Administration and Home Affairs (MOGAHA) and the Ministry of Unification. The government launched the construction work immediately after the closing hour, and press-support administration office and the common room next to the article-delivery room were removed by August 31.

Government employees who lost offices are doing their tasks at desks placed within the article-delivery room.

Concerning the removal of the press-support administration office, Korean Overseas Information Service explained the “‘Geochang Massacre Committee’ and the ‘New Address Transmission Board,’ subsidiaries of MOGAHA, are currently located on the fifth floor of the MOFAT (Ministry of Foreign Affairs and Trade) complex, but they need to move in here.”

“The Korean Overseas Information Service said it would discuss the transfer procedures of the article-delivery room with the journalists, but seeing the construction work being enforced, we can see whether it meant it or not when it said it will talk with the journalists,” said a correspondent.

The Korean Overseas Information Service also urged the correspondents to the Ministry of Foreign Affairs and Trade to empty the journalists’ room on the second floor of the ministry building in Doryeom-dong, Seoul, and to transfer to the new article-delivery room on the first floor.

“Since August 12, construction of the integrated briefing center at the Central Government Complex has been suspended,” said the Korean Overseas Information Service on August 30. “Now that the government has agreed to guarantee the current level of access to the source as requested by the journalists, we’d like for them to cooperate so that the construction work can at least resume from next week.”

The correspondents to the Ministry of Foreign Affairs and Trade, who have been boycotting the use of the new article-delivery room and the briefing room established by the government’s press control measure, decided to finalize their response by September 3.

Journalists corresponding to the Ministry of Foreign Affairs and Trade are raising objections that the press-control measure by the government and the “guideline on the press-support,” a prime ministerial order for the fulfillment of the measure, are likely to encroach the journalists’ right to have access to sources.

[Outline of ‘the Merger of 4 Press Organizations’]

On August 31, the outline was revealed for the merger of four press organizations established as the statutory organization of the Newspaper Act: the Korea Commission for the Press (KCP); the Korea Newspaper Circulation Service; the existing Korea Press Foundation; and the Committee for Local Press (CLP) (set up by the Special Act for Local Press Development).

On the same day, the Ministry of Culture and Tourism held a public hearing at the Korea Press Center in Taepyeongno, Jung-gu, Seoul, and announced the following three draft plans: a grand merger that combines the four organizations into one; a midway merger that combines the KCP of Press Foundation with CLP; and a small merger that combines KCP with CLP.

Also proposed was the detailed draft plan to establish a special CLP as a subsidiary of the newly set up statutory organization, the Integration Committee. The special CLP will be set up based on the structural difference between newspapers sold within a province and those sold nationwide.

In order to eliminate the instability of the fund and profit raising projects on the side of the Press Foundation, it was also proposed that the Integration Committee takes over and reconstructs the functions and the organization of the Press Foundation and takes over most of the projects as well.

The Ministry of Culture and Tourism has been discussing the merger of the four organizations since April, saying that their tasks overlap. Because KCP and the Korea Newspaper Circulation Service in particular have only existed for less than two years since the enactment of the Newspaper Act in the second half of 2005, the discussion to merge them is arousing criticism that it is the proof that “the Newspaper Act was drafted without prior planning.”

The draft plan for merger announced that day is a condensed version of the conclusion drawn by the research team for the roadmap of press-support integration, a subsidiary of the Ministry of Culture and Tourism, consisting of five members: Choi Yeong-jae (Hallym University); Mun Jong-dae (Dong-eui University); Kwon Hyeok-nam (Chonbuk University); Kim Chang-yong (Inje University); and former executive officer of KCP Kim Ju-eon.

“The most reasonable way is to merge the three organizations excluding the Korea Newspaper Circulation Service,” says Professor Mun. “When the Korea Newspaper Circulation Service is merged, the opportunity cost of other projects will be diminished because most of the Integration Committee fund will have to be injected into the Korea Newspaper Circulation Service.”

“The other three organizations beside the Korea Newspaper Circulation Service are hoping to achieve independent management based on government subsidies rather than being combined with the Korea Newspaper Circulation Service. In case of the draft plan to merge all four organizations, the biggest obstacle is to how to coordinate the differing views of each organization,” he added. The Ministry of Culture and Tourism will publicize the final report in September after reflecting on the opinions given during the public hearing.

The annual budgets of the four organizations, when added up, total to 150 billion won (as of 2007). The reason the Ministry of Culture and Tourism is steering for merger despite the contradicting interests among the members of organizations is because the budget is being wasted.

“What we need to question in the fundamental sense is not the necessity of the merger but that of the existence of the organizations,” said professor Hwang Geun of Sun Moon University in a phone-interview with Dong-A Ilbo. “And that’s because the Newspaper Act, on which the new organizations are based, is almost a purposive law set up to target newspapers that are critical to the government, such as Dong-A Ilbo or Chosun Ilbo.”

“We also have to consider the fact that the merged organization can have a bigger influence on the newspaper market,” says law professor Mun Jae-wan of Hankuk University of Foreign Studies.

[Chair of Defense Research Center Resigns for Seo Ju-seok’s NLL Article]

Chief researcher Shim Gyeong-uk (female), who has been chairing the Security and Strategy Research Center of the Korea Institute for Defense Analyses (KIDA), resigned from office, taking responsibility of the situation engendered by the release of article concerning the North Limit Line (NLL) written by former Presidential Chief Secretary for Unification, Diplomacy and Security Policy Seo Ju-seok.

According to Ministry of National Defense and KIDA on August 31, she expressed her will to resign to president of KIDA Kim Chung-bae on August 28 and was accepted.

When Seo, who was employed by the KIDA as a chief researcher, aroused controversy by releasing an article on Hankyoreh Daily on July 28 contending that “the argument that the NLL is the territorial limit is unconstitutional,” Chairperson Shim showed his willingness to resign in order to take responsibility as the head of the center, said a person related to KIDA.

“As the leader of the center, I should have strictly revised the article (written by former presidential secretary Seo) about NLL but I didn’t, and this added pressure to my organization. I’m taking responsibility for that,” explained Shim.

In the article, Seo said, “Right after the truce agreement, the UN commander defined the NLL. If we accept it as the ‘territorial limit,’ then it means that a UN commander drew the order for our territory. In addition, if this line is the territorial limit, the Military Demarcation Line on land should also be a national border, but nobody argues so.”

Regarding this, Minister of National Defense Kim Jang-su hinted his unpleasant feelings on August 29 during a general meeting of the National Defense Committee of the National Assembly, saying “The article was released at a very inappropriate point in time when the people and the press are showing great interest in the South-North Korean summit. I’ll inquire into facts and take necessary actions.”