Assembly holds first Busan Savings hearing
Over 100 high-ranking government officials gathered yesterday at the National Assembly for the start of the legislature’s hearings into the massive Busan Savings Bank scandal and to uncover the extent to which government officials were involved in the bankruptcy.
Members of a special committee slammed the police and prosecutors’ investigations, calling them insufficient, and heard testimony from various officials who reported the results of their respective probes into the corruption scandal.
“Had the Busan Regional Tax Office thoroughly conducted a tax inspection,” Grand National Party lawmaker Lee Jong-heuk said, “the office would have found the poor management of Busan Savings Bank [in advance].”
Lee added that the Board of Audit and Inspection, despite knowing about the group’s dire financial status, failed to take any measures before the banks closed down.
Shin Kuhn, a Democratic Party lawmaker, said, “Prosecutors had already been aware of problems at the local savings banks before the group went bankrupt, but they didn’t conduct a full-scale investigation, leading the banks to become ‘piggy banks’ for some people.”
Ruling and opposition party lawmakers also wrangled over who would take the witness stand at a hearing slated for Aug. 10 and 11.
“When Prime Minister Kim was commissioner of the Board and Audit and Inspection, he reported Busan Savings Bank Group’s poor financial status to President Lee last May, but there was no action [from the government],” Shin Hak-yong, a DP lawmaker, said. “We want Kim to be a witness at the hearing to listen why the government didn’t take any measures at the time.”
At a Feb. 22 luncheon with senior reporters, Kim said that he had received pressure from “50,000 different places” while investigating illegalities and insolvencies at savings banks when he was head of the board.
Also at the National Assembly hearing, a task force under the Prime Minister’s Office released its report yesterday on ways to reform the Financial Supervisory Service.
The report from the task force, which President Lee created in May, suggested several measures, including diffusing the Financial Supervisory Service’s authority to the Korea Deposit Insurance Corporation and releasing records of the FSS’ dealings with the troubled banks to the public.
Several FSS officials as well as a former commissioner of the Board of Audit and Inspection, Eun Jin-su, allegedly received bribes from Busan Savings Bank Group in return for turning a blind eye to the group’s debt-stricken banks.
But experts said that the report from the Prime Minister’s Office failed to make any breakthroughs and that the president’s efforts to rein in the authority of the FSS ended in vain.
They said more sensitive matters - such as launching an independent consumer protection center or separating the inspection department for financial firms from the FSS - should have been discussed.
By Kim Hee-jin [firstname.lastname@example.org]
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