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[Editorial] Misuse of state subsidies

Civic groups need to strengthen rules and enhance transparency over state funds

By Korea Herald

Published : June 7, 2023 - 05:30

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“Finders, keepers” is an English adage that usually refers to a situation where whoever finds something by chance is entitled to keep it. As far as South Korea is concerned, the “whoever” in question are some civic organizations and the “something” is state subsidies.

More importantly, those civic groups have not only kept the subsidies but also allegedly misused them by exploiting lax oversight and engaging in dirty embezzlement practices.

According to a report filed to President Yoon Suk Yeol, a government audit of 12,133 civic organizations which had received 6.8 trillion won ($5.2 billion) in state subsidies over the past three years, found a total of 1,865 cases of alleged irregularities. Of the total subsidies, 1.1 trillion won was used for allegedly improper purposes and 31.4 billion won was allegedly embezzled.

As the audit excluded small civic groups which had received less than 30 million won in state subsidies, the audit was carried out for about half of the total number of civic groups. If the audit is applied to all civic groups regardless of subsidy amount, the number of allegedly illegal spending cases is expected to go up dramatically.

Civic groups used a variety of allegedly fraudulent methods to line their pockets with the “blind money” from the government. The latest audit revealed that an activist group had spent state money to hold a lecture aimed at opposing the Yoon administration, while another agency involving inter-Korean relations used public funds to pay for individual office rent and family phone bills. Some civic group members went on personal overseas trips in the name of promoting cooperation with international institutions. And there were even preposterous alleged fraud cases in which paper companies were founded to receive state funds designed to help create new jobs. The list of morally questionable cases goes on and on.

It is not the first time the festering problems with civic groups in connection with state funds have been exposed. In a probe of ten civic organizations over six months from August 2022, the Board of Audit and Inspection found cases of embezzlement amounting to 1.7 billion won, which resulted in the indictment of 73 members from the groups.

The shocking revelations are evidence of negative perceptions about civic groups receiving government subsidies without regular audits and external oversight. Civic organizations must do some serious soul-searching about their original purpose and find the root of what went wrong.

After all, civic groups are supposed to keep an eye on the government and big conglomerates to prevent foul play while helping Korean society make progress in various fields with inspiring social campaigns and volunteer activities. Instead, some civic organizations and their members had been allegedly engaged in the embezzlement and irregular use of state funds -- the very crimes they should be helping to prevent, not only for their own organizations but also for state agencies and big businesses.

On Monday, Yoon ordered a stern crackdown on corruption of civic groups and a full recovery of misused state funds, according to presidential spokesperson Lee Do-woon.

The ruling People Power Party also slammed civic groups that allegedly committed fraud, with spokesperson Yoo Sang-bum calling them “criminal organizations” keen to steal state funds. Rep. Park Dae-chul, floor leader of the People Power Party, claimed the previous Moon Jae-in administration was responsible for the subsidy scandal, as it generously gave out funds to the civic groups that maintained a friendly stance with the administration.

Aside from the political dispute, it is a fact that the amount of government subsidies given to civic organizations reached 22 trillion won -- a rise of 2 trillion won -- during the Moon administration’s five-year term. The number of civic group recipients also climbed to 27,215 last year, up from 22,881 in 2016.

The government’s lax oversight of state funds must be fixed. A new set of spending and audit rules should be introduced to prevent irregularities. It is also important for certain civic organizations themselves to make efforts to restore their damaged reputation by enhancing transparency in the handling of state funds. State fund finders are no keepers, and the public does not want civic groups to become “Losers, weepers.”