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Ex-officials for hire: Advisers or lobbyists?

Apr 26,2005
Civic groups are raising concerns that former high-level government officials working as highly paid advisers at law and accounting firms are wielding their influence behind the scenes on behalf of their firms’ clients.
A recent survey by the Joong-Ang Ilbo of the 10 largest law firms and of four accounting firms with more than 100 employees found a total of 35 key former government officials working as advisers, many earning hundreds of millions of won annually as contract workers.
Jin Nyum, a former Finance Minister, is an adviser at Samjong KPMG, an accounting firm. Lee Keun-young, a former head of the Financial Supervisory Commission, is an adviser at a law firm. Han Duck-soo, the current finance minister, and Lee Hun-jai, the previous finance minister, were both once advisers at the law firm Kim & Chang.
These ex-officials are able to work for these firms because of what some call loopholes in a law that bars them ―in many, but not all cases ―from working for the private sector for two years after leaving public service.
The Public Service Ethics Act, which was designed to keep ex-public servants from using privileged information in business, bars them from working at for-profit companies with capital of more than 5 billion won ($5 million) and annual sales of over 15 billion won. However, this law does not apply to former government officials who are hired as contract workers.
Civic groups claim the advisers are effectively lobbyists. “Even if an adviser does not lobby the government directly on behalf of the firm he works for, his former staff automatically know what they should do,” said Lee Jae-myong of People’s Solidarity for Participatory Democracy. “The adviser’s presence has an impact on the government, and since advisers receive a salary, they should be subject to the Public Service Ethics Act, even if their work is contract-based.”
An official at the law firm of Lee & Ko said, “The purpose of hiring former key government officials is for them to take big cases, attracting more customers, rather than to seek their advice.” Lee & Ko does not have any former high-level government officials on its payroll.
But legal and accounting firms argue that these former government officials’ major role is giving managerial advice. They also say the knowledge and experience of the ex-officials should be used because their firms need to offer comprehensive consulting services to clients.
“It is more appropriate for a former economic bureaucrat to brief a foreign client on the overall Korean economy than a lawyer,” said a Kim & Chang official.
“It is unfair that former public officials have limits in working for private companies while civilians are chosen as public officials without restrictions,” said a bureaucrat-turned-adviser.
“While banning former public servants from using job-related information, the government should also relieve employment restrictions, letting them use their knowledge and experience.”


by Jung Kyung-min, Park Sung-ha


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