Prosecutors must answer to tearsWhen he was head of the Board of Audit and Inspection, Prime Minister Kim Hwang-sik recalled that he had received pressure while investigating problems involving construction project financing by savings banks. His confession implying a shady connection between the industry and politicians as well as senior government officials is now matched with evidence.
It has been discovered that Chung Jin-suk, senior presidential secretary for political affairs, served as an outside board member of Samhwa Mutual Savings Bank, which is under investigation for extending illegal loans. Some 30 percent savings banks’ outside board members have served in the legislative branch or in the government in some capacity.
Chung Chang-soo, first vice minister of land, transport, and maritime affairs, who suddenly resigned from office earlier this week, withdrew more than 2 trillion won ($1.8 billion) in deposits from Busan Savings Bank Group subsidiaries before their operations were suspended.
Prosecutors have been investigating whether information about the government plan to shut down the Busan bank group’s units was leaked because an elite group of customers withdrew more than 50 million won en masse over a couple of weeks before operations were suspended. They are yet to produce tangible evidence.
Former vice minister Chung insists he withdrew the savings because they matured, and presidential secretary Chung argued that he had not attended any of the corporate management meetings at the savings bank. Still, the latter must explain why he has not reported the board title three years after he was elected, bending a legislative law that requires a report on any other office that is held. Prosecutors also would have to determine whether the 10 government officials above the vice-ministerial level, including former vice minister Chung, were tipped off about the bank’s suspension to withdraw their deposits.
Few believe the savings industry debacle is a result of poor management. Corruption on a scale of trillions of won could not have gone on for so long without government patronage and protection.
The savings banks whose operations were suspended raised billions of won in secret funds through irregular lending practices. Prosecutors must uncover where and to whom exactly these funds went to. This savings bank scam is an unforgivable crime that took advantage of innocent clients. Prosecutors must answer to their tears and anger with a thorough investigation.