[EDITORIALS]Scoundrels Gorged on Bailout Funds

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[EDITORIALS]Scoundrels Gorged on Bailout Funds

Bailout funds, which will cast a heavy burden on the shoulders of the people for a long time, should be spent properly with no waste in order to play their intended role and maximize their effects. At the same time, those responsible for insolvency should be strictly punished in order to reassure the taxpayers covering the additional tax burdens. The outcome of a special audit on management of bailout funds, conducted by the Board of Audit, clearly showed that such principles were totally ignored.

To raise and spend bailout funds was unavoidable despite institutional inertia and legal loopholes, because the nation's financial system was nearly collapsing. However, the outcome of the recent audit surpassed the worst predictions, enraging the public.

First, we are extremely shocked to learn that owners of troubled companies and insolvent financial institutions that received bailout funds diverted 7 trillion won ($5.4 billion) through various illegal methods. Making the matter worse, some companies and their majority shareholders shipped $400 million overseas and traveled repeatedly to foreign countries. They even spent hundreds of millions of dollars to play golf and gamble, feeling no guilt.

The Ministry of Finance and Economy, the Financial Supervisory Commission and the Korea Deposit Insurance Corp., which supervises working-level management of the bailout funds, spent money carelessly, even putting some of it in investment trust funds. We cannot help asking the authorities if they can still claim that they have properly managed the taxes paid by the sweat of the people.

Financial institutions that received bailout funds recklessly provided loans with no interest to their employees and increased their wages. One bank more than doubled the salaries of its executives over the past three years; we are at a loss for words at the serious level of amorality. Shameless bankruptcy trustees personally used golf club memberships that were supposed to be liquidated. This dumbfounds us.

We cannot deny the role and function of bailout funds only because there have been problems associated with raising and managing the money. However, when an audit without even authority to trace bank accounts can uncover such problems in less than six months, it suggests that there are more to be revealed. We have to ask the Korea Deposit Insurance Corp. what it has been doing until now.

There is no limit of time and place for holding the owners and executives of the troubled companies responsible. Radical reform of the slack management system is inevitable. The government should set forth integrated and systematic countermeasures instead of the sporadic measures carried out by the Korea Deposit Insurance Corp., the Financial Supervisory Commission and the prosecutors. Responsibility for insolvency should be demanded, and those responsible should be punished strictly.

The National Assembly should also plan a parliamentary inspection now that the problems in management of bailout funds have emerged. The Board of Audit should not slacken the reins when conducting additional audits. Prosecutors should thoroughly investigate what has been reported. The government should check the poor progress of collecting the bailout funds and the methods of payment. We emphasize again that identifying those responsible for the reckless management of bailout funds and severe punishments are the only measures that will root out future abuses of bailout funds.
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