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[Editorial] Blind spot
Loopholes in blind trust must be blocked
By Korea HeraldPublished : May 4, 2015 - 19:17
The Sung Woan-jong scandal is a typical corruption case in which a greedy businessman pursued his financial and political interests through collusive ties with influential people and bribery.
The scandal, which has already unseated the prime minister and is closing in on more associates of President Park Geun-hye, clearly shows that Korean politics is still dominated by dirty money.
What we find more troubling is that while Sung and other corrupt individuals in the case cannot avoid blame and punishment for pursuing personal greed, there were institutional loopholes that facilitated the detestable corruption.
The prime one is the flawed rules on conflicts of interest and blind trust for lawmakers. Under the current rule, lawmakers must not own more than 30 million won worth of shares related to their work. Such stocks should be put in blind trust, which are required to be sold within 60 days.
If the stocks are not sold within 60 days, their sale can be extended by 30 days, and the extension is virtually indefinite. Moreover, lawmakers can take the obligation to abide by the blind trust rule to an administrative suit. This is exactly what Sung did to retain his stocks in a construction company and sit on the powerful National Policy Committee of the National Assembly.
This paved the way for Sung to exert influence over financial authorities ― which are subject to supervision by the parliamentary panel ― so that his poorly performing company, which suffered from capital impairment, could receive bank loans amounting to 1.3 trillion won.
The problem is that Sung is not the only one who circumvented the rules. In the current parliament, which began its four-year term in 2012, seven lawmakers have put their stocks in blind trust, but not a single share in trusts have been sold.
One lawmaker who put stocks of his construction company and logistics firm in blind trust is on the Land, Infrastructure and Transport Committee, and another who has stakes in a rice firm is a member of the Agriculture Committee.
The National Assembly should urgently look into rules on conflicts of interest and blind trust and address problems. If not, we will see another Sung Woan-jong very soon.
The scandal, which has already unseated the prime minister and is closing in on more associates of President Park Geun-hye, clearly shows that Korean politics is still dominated by dirty money.
What we find more troubling is that while Sung and other corrupt individuals in the case cannot avoid blame and punishment for pursuing personal greed, there were institutional loopholes that facilitated the detestable corruption.
The prime one is the flawed rules on conflicts of interest and blind trust for lawmakers. Under the current rule, lawmakers must not own more than 30 million won worth of shares related to their work. Such stocks should be put in blind trust, which are required to be sold within 60 days.
If the stocks are not sold within 60 days, their sale can be extended by 30 days, and the extension is virtually indefinite. Moreover, lawmakers can take the obligation to abide by the blind trust rule to an administrative suit. This is exactly what Sung did to retain his stocks in a construction company and sit on the powerful National Policy Committee of the National Assembly.
This paved the way for Sung to exert influence over financial authorities ― which are subject to supervision by the parliamentary panel ― so that his poorly performing company, which suffered from capital impairment, could receive bank loans amounting to 1.3 trillion won.
The problem is that Sung is not the only one who circumvented the rules. In the current parliament, which began its four-year term in 2012, seven lawmakers have put their stocks in blind trust, but not a single share in trusts have been sold.
One lawmaker who put stocks of his construction company and logistics firm in blind trust is on the Land, Infrastructure and Transport Committee, and another who has stakes in a rice firm is a member of the Agriculture Committee.
The National Assembly should urgently look into rules on conflicts of interest and blind trust and address problems. If not, we will see another Sung Woan-jong very soon.
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Articles by Korea Herald
