[EDITORIAL] Let's Not Repeat Public Funds Fiasco

A recent Joongang Ilbo series has revealed that public funds have indeed been mismanaged. The report indicated that taxpayers will ultimately have to shoulder 60 trillion won ($50.2billion) out of 110 trillion won ($92 billion) in public funds. While the ratio of tax burden in national income will exceed 20 percent mark next year, taxpayers will be obliged to take the additional burden of paying for the bungled management over the next several years.

The government's shortcoming and outright failings in spending the 110 trillion won strikes us as appalling. The public funds were created and managed without a blueprint. Five trillion won was injected into two investment trust companies in June, but at that time there was no clear reason given as to why that specific amount was needed and whether the companies could be stabilized by the infusion. Things were in such a state of disorder that it was not until several months later that the proper steps were taken and memorandums of understanding were signed. The mismanagement of public funds was almost predictable. The amounts and the periods of assistance were decided by what seemed like a coin toss. The banks and companies squandered the money. It is not clear who should be held responsible for spending that 110 trillion won. By law, the Korea Deposit Insurance Corporation is supposed to conduct legal procedures and supervise the spending, but no one believes that this corporation has real power. Circumstantial evidence points to the Financial Supervisory Service or the Ministry of Finance and Economy as the offices that pulled the strings. Furthermore, there was no transparency in the decision-making process. The formal supreme decision makers, the Steering Committee of the Korea Deposit Insurance Corporation and the Management Supervision Committee of the Korea Asset Management Corporation, neither keep records of their meetings nor make them public. What is of the utmost importance is to find out who is responsible. Only then can we hold those responsible accountable.

The mismanagement of public funds can be prevented only when the procedures governing their distribution and use are transparent and a trusted single entity is charged with their supervision. As the parliamentary investigation begins next week, we hope these steps will be taken into consideration and that we can learn valuable lessons from past failures so as not to repeat them.