Suspicious subsidies

The energy industry has always maintained cozy ties with the government. That has not changed under the liberal government despite its promises to be completely different from past conservative administrations. According to documents received by the opposition Liberty Korea Party lawmaker Yoon Han-hong from the Seoul metropolitan government, city subsidies for mini-solar panels installed on apartment balconies mostly went to companies affiliated with the ruling party. Of a 24.9 billion won ($21.8 million) subsidy paid from the Seoul city budget, half — or 12.4 billion won — landed in the pockets of three cooperatives run by loyalists of the ruling Democratic Party (DP). The other half was spread among 29 enterprises.

Green Dream Corp. made the most among the three cooperatives. Its share of subsidies in the first half reached 1.63 billion won, compared with 165 million won for all of 2016. Its head used to lead a youth committee of the Woori Party, which was merged into the ruling DP. He ran for the legislature twice backed by the party but lost. The other two cooperatives also have pro-DP civilian activists as their head or in senior positions.

The three ganged up on a unit of Korea Electric Power Corporation (Kepco) to steal its business of supplying solar panels to schools sponsored by the Seoul city education office. They claimed a state entity was stealing business opportunities from private players, meaning them. The Kepco unit suspended its business in September and is discussing solutions with the three cooperatives close to the ruling party.

Any company with the right technology can bid for solar panel projects subsidized by a government. But it is questionable whether the three cooperatives are greater than their competitors. The subsidy that fattens their bottom lines comes from taxpayers. The Seoul city government must explain why half of its subsidies went to the three. Otherwise, the ruling party cannot avoid criticism.