Posted November. 19, 2008 02:59,
One cannot help but be at a loss for words at the results of the corruption investigation into state-owned corporations, which began after the Lee Myung-bak administration was launched.
A former executive at the Korea Land Corp. was found to have hidden 21 million won (14,502 U.S. dollars) worth of department store gift certificates under his bed. He had received them for helping a businessman get authorization for an apartment construction. Another executive at the Korea Midland Power Co. hid 20 million won in the ceiling of his restroom that he received for helping a businessman win a construction order. To make matters worse, the sons of the former chiefs of the Korea Land Corp. and the Military Personnel Mutual Fund were arrested for peddling their fathers influence. The first son got 45 million won (31,077 dollars) and the other 1.6 billion won (1.1 million dollars). The investigation results have infuriated the Korean people since their taxes fund state enterprises.
As many as 660 CEOs and executives of state-owned corporations were arrested or prosecuted without arrest. Prosecutors must not stop there but also bring about a sweeping reform of state enterprises. Unhealthy ties among politicians, bureaucrats and public companies must be severed so that corruption can be rooted out. Who wants to work hard and honestly pay taxes if staff at public enterprises enjoy high compensation and privileges despite their corruptive behavior with no check in place?
Incompetent and inexperienced political appointees are heading state-owned companies just because they share similar political values with the administration. They collaborate with unions for their safety and survival, and government agencies with their own problems at hand neglect oversight and tolerate corrupt behavior. Barring a dramatic change, state-owned companies will continue to splurge tax money.
The top four state enterprises in asset size -- the Korea Electric Power Corp., the Korea National Housing Corp., the Korea Expressway Corp. and the Korea Land Corp. -- are not free from corruption charges. Numerous jobseekers dream of working for these companies. The four companies, however, have been implicated in all kinds of corrupt practices such as diversion of public funds, bribery, preferential loans and illegal funding.
A criminal investigation and punishment alone cannot transform state enterprises. Major surgery is needed to remove the cancer of corruption. The president must declare war on corruption in the public sector.