Some lawmakers earmark budget for their profit

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Some lawmakers earmark budget for their profit


Left: Red dots are real estate properties owned by Rep. Kang Ghil-boo of the ruling Saenuri Party. The new road is marked with a red line. Right: The 24 red dots show properties along a newly approved road extension owned by Rep. Joo Seung-yong of the NPAD. [Daum]

The Gilcheon Industrial Complex in Ulju County, Ulsan, was built in 2005 on a large stretch of farmland with the central government’s support. The complex is about 15 minutes by car from Ulsan Station and a four-lane road was built to the complex from the city. Rep. Kang Ghil-boo of the Saenuri Party, who represents the district, secured additional central government funding of 28 billion won ($25.71 million) from 2007 to 2010 and built another four-lane road to the industrial park.

In a 2009 report of his legislative activities, Kang bragged that he made enormous efforts to persuade officials of the Ministry of Planning and Finance to earmark the funds. After the new road was built, former farmlands around it went up in value from 60,000 won per square meter to 340,000 won.

Kang owned 4,509 square meters of land in four locations within 700 meters (0.43 miles) of the new road. According to Kang’s asset disclosures, the value of the four plots went from 52.83 million won in 2004 to 423.49 million won this year.

Aside from making laws, the main power of a lawmaker is finding ways to get parts of the national budget to his or her own district, traditional pork barrel politics. The JoongAng Ilbo analyzed the asset disclosures of 300 lawmakers along with original drafts of budget bills over the past decade, the budget revisions, transcripts of the lawmakers’ deliberations and the lawmakers’ public reports of their own activities.

The analysis showed that some lawmakers who secure budgets for infrastructure projects in their districts often owned properties nearby - within 2 kilometers of the development projects - prompting questions of why they wanted the budget in the first place.

And sometimes they owned properties outside the districts they represented.

In the National Assembly’s audit of the Incheon International Airport Corporation in 2006, Kang asked the Ministry of Transportation and Construction, the predecessor of the current Ministry of Land, Infrastructure and Transport, about a possible plan to use Gimpo International Airport as an international shuttle hub to help a new development project in the Magok area of Seoul’s Gangseo District, where Gimpo is located. Kang encouraged the ministry to approve the plan and it was.

As it turned out, Kang owned a 346.5-square-meter plot in Magok that he purchased in 1978. Its value was 1.48 million won per square meter in the 1990s, which went up to 8.49 million won in 2009. The Seoul Housing Corporation paid Kang 1.3 billion won for the land in 2006.

Kang, who served as vice minister of the transportation and construction from August 2000 to April 2001, was once a lawmaker for the Uri Party, the predecessor of the current main opposition New Politics Alliance for Democracy (NPAD). From 2004 t0 2007, he worked as the deputy chief policymaker for the National Assembly’s Construction and Transportation Committee and the Special Committee on Budget and Accounts.

After winning the 2008 election as an independent candidate, Kang switched to the Saenuri Party and was reelected in 2012.

“My properties were family-owned lands that my father used as farms even before I was born,” Kang told the JoongAng Ilbo about the land in Ulsan. “Those inherited agricultural lands had nothing to do with the state-funded projects.”

In the case of the Magok development project, Kang said he cannot remember the details.

Rep. Joo Seung-yong of the NPAD, who represents Yeosu, South Jeolla, often bragged that he has steered more than 2 trillion won of national budget money to the Jeolla region throughout his career. In the 2014 report describing his legislative activities, Joo said he had won 26.5 billion won to expand a road connecting the villages of Hwayang and Sora in Yeosu.

Along that road Joo owns 24 properties totaling 3,010 square meters. As the construction to expand the road will begin, most of Joo’s lands will be purchased by the South Jeolla Provincial Government.

“This area used to be the center of Yeosu in the past, so they were not cheap,” a real estate agent based in the village of Sora said. “But there was no possibility of a new development project other than the road expansion, so there were no sales for the past decade.”

The total value of Joo’s lands went up by 150 million won over the past year.

Joo, a three-term lawmaker who also served as Yeosu mayor, chaired the National Assembly’s Committee on Land, Infrastructure and Transport from 2012 to 2014.

The NPAD lawmaker defended his efforts to win the road expansion project.

“I didn’t win the project to receive higher compensation for my lands,” he said. “I inherited all the properties in Sora. Talks on expanding the road there went on for four decades, but it was never realized. In fact, most of my properties are directly connected to the road, so it is actually a serious infringement upon my property rights.”

The JoongAng Ilbo’s analysis discovered more cases of development projects pushed by lawmakers with properties in the vicinity.

Rep. Hong Moon-jong of the Saenuri Party sponsored a bill that expanded the Howon Interchange of the Seoul Ring Expressway in 2013. The project considerably improved traffic in Uijeongbu, home of Kyungmin College, which Hong owns.

“The school is the biggest institute in the city,” Hong said. “The project did nothing but improve the life of the residents.”

Rep. Park Dae-dong of the Saenuri Party owns 886.96 square meters of land in Buk District of Ulsan, his constituency. He pushed initiatives to expand the national budget for the development projects in the region and the value of his properties went from 348.93 million won in 2012 to 412.1 million won in 2015.

The JoongAng Ilbo tried to contact Park, but he was not available.

“If lawmakers know they own properties in the vicinity of development projects and still lobbied the government to increase the budgets, we cannot tolerate it,” said Rep. Woo Sang-ho of the NPAD.

Rep. Ahn Cheol-soo of the NPAD said it is urgent for the National Assembly to establish a law to prevent such conflicts of interest.

When a new anti-graft bill known as the Kim Young-ran law was first submitted to the legislature in 2013, the draft included clauses to prevent such conflicts of interest for lawmakers. Those clauses were removed during deliberations.

Critics said the behind-closed-doors budget deliberation system invites conflicts of interest and urged the National Assembly to reform its practice.

The subcommittee on budget deliberations first conducts a review to cut budgets and carries out discussions to increase budgets later. While the talks over cuts are partly open to the public, the deliberations over increases are closed. No transcript is created for them.

“We need a mandatory system to keep records of the budget increase discussions,” said Jung Chang-su, a professor of Kyung Hee University’s College of Humanities and head of the National Finance Institute. “The budget deliberation period should be longer and a standing committee must be created to oversee the budget issues at all times, so that all the proposals can be reviewed thoroughly.”

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