The Korea Herald


[Editorial] Corrupt energy projects

New corruption cases in renewable energy projects show lack of oversight

By Korea Herald

Published : June 16, 2023 - 05:31

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The previous Moon Jae-in administration launched an ambitious policy initiative to shift the country’s energy policy toward clean and renewable sources while phasing out nuclear power generation.

As with other past large-scale government projects, however, many of President Moon’s renewable energy projects fell into a trap of insider collusion and corruption, involving not only those at private companies, but also government officials including those in charge of energy policy.

Rampant corruption cases involving the Moon administration’s energy projects demonstrate what usually happens when a huge amount of taxpayer money is allocated to a new state initiative without vigorous auditing and third-party oversight.

On Tuesday, the Board of Audit and Inspection said it asked the prosecution to investigate 38 people on suspicion of illegal acts and corruption. The suspects include Gunsan, North Jeolla Province, Mayor Kang Im-jun, former public officials, heads of local governments and a professor at a public university.

In one case, two mid-level government officials allegedly colluded to illegally change the purpose of a land site for a solar power business at the request of solar power firms in January 2019. One of them even forged related documents before a parliamentary hearing was held to identify suspicions. After quitting their government posts, they landed CEO and vice president jobs, respectively, at the company that had secured the right to build a solar power farm at the site in question.

The BAI revealed that Kang selected a company led by his fellow high school alumni as the preferred bidder for a solar energy project, even though the firm was not qualified to take on the project. Kang also arranged a host of favorable business favors for the company. The BAI estimated the Gunsan city government lost more than 11 billion won ($8.6 million) due to the irregularities.

In another case, a professor in North Jeolla Province fabricated data to obtain a license to run a wind power business in the Saemangeum area through a company nominally run by his brother. The professor did not start the construction at all and instead sold the company to a foreign firm for $50 million, reaping a huge profit for himself.

The BAI has also been investigating 250 employees from eight public institutions for allegedly failing to disclose personal interests in connection with solar energy businesses in a bid to secure illicit benefits or advantages.

Not only corrupt bureaucrats, but also lax oversight of government subsidies resulted in wasted taxpayer money. In September last year, the Prime Minister’s Office launched an investigation into 12 municipal governments to identify problems with their renewable energy projects. The findings from the probe showed that a total of 2,267 irregularities had led to 261.6 billion won in tax waste.

The government watchdog also said there are still many corruption cases yet to be uncovered. Given that a whopping 45 trillion won of state funds and bank loans was poured into renewable energy projects during the Moon administration and there was apparently widespread corruption, it is almost unfathomable how much in state subsidies was stolen or misused by corrupt bureaucrats and their friends in the private sector.

On Wednesday, President Yoon Suk Yeol asked the office of the presidential secretary for civil service discipline to carry out a thorough investigation into officials entangled in the solar power projects.

But the presidential office said Yoon’s request for a thorough investigation is limited to the decision-making line of the Moon administration involved in the solar projects only -- not its broader line of decision-making. The explanation seems to be aimed at blocking unnecessary political attacks from the main opposition Democratic Party of Korea, previously the ruling party under Moon.

It is important to keep conducting investigations to uncover the deep-rooted networks of corruption involving renewable energy projects. Equally important is the need for the government to strengthen oversight for state-led projects while setting a realistic road map for the country’s renewable energy policy.