‘Parachute appointments’ feared

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‘Parachute appointments’ feared

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With nearly two years left in the Park Geun-hye administration, there are already worrying signs that “parachute appointments” may land at many of Korea’s public institutions, including the nation’s sole power supplier as well as leading financial companies that are still heavily controlled by the government.

In Korea, the term “parachute appointment” is used to refer to those with political or business connections who are brought in to fill a position despite lacking the necessary experience.

The Korea Electric Power Corporation (Kepco) held a shareholders meeting on Monday at its headquarters in Naju, South Jeolla, where it voted to recommend adding former National Policy Agency chief Lee Sung-han to its audit committee.

The final decision will be made by President Park Geun-hye. The position was previously held by lawyer Ahn Hong-ryoul, who left to compete in the general election.

If Lee is appointed, he will receive an annual salary of 112 million won ($97,400).

On the same day, former Saenuri Party lawmaker Cho Jeon-hyeok, who is a non-executive director at the company, was also recommended to the committee.

Cho currently receives roughly 30 million won from the company each year, which would increase if the recommendation goes through.

The recommendations of the two officials have led to accusations that both are parachute appointments, largely because they lack expertise and experience in the energy industry.

Lee’s only experience is in law enforcement, where he worked for more than 30 years before retiring in August 2014.

Cho is a conservative education expert who once headed one of the nation’s most right-wing education civic groups that was founded in 2005.

During the 18th National Assembly, Cho was on the committee for education and science, and even competed to become Gyeonggi’s superintendent of education.

Cho earned the nickname “Korean Teachers and Education Workers Union Sniper” after he disclosed the names of 3,400 teachers who were members of the labor union, despite a 2010 court order making it illegal to do so. He was subsequently fined 340 million won by the court.

Cho went on to try his hands in the general election but failed to be elected into the National Assembly and subsequently returned to Kepco.

“My understanding is that Cho was recommended [for the auditing committee] because his expertise in the work was acknowledged,” a Kepco official said.

But the former lawmaker only attended only one or two of the five board meetings held so far this year. He didn’t even show up to the last three meetings held after February, which overlapped with preparation for the general election.

In the last two years, there have been a total of 30 board meetings where 80 issues were put up for discussion. Not a single issue faced objections from the members, which is particularly worrisome when considering that more members could be added that wouldn’t bring in additional expertise.

“There is no way to properly oversee the executives or the auditors, even if they don’t do their jobs,” said Jun Sung-in, a professor of economics at Hongik University. “The fact that executives and auditors who should be overseeing management are themselves swirled in the parachute controversy is a bigger problem.”

The financial industry is also seeing controversies emerge involving revolving-door appointments.

Rumors have been swirling at KB Kookmin Bank that the auditor position vacant since January 2015 will be filled by former Blue House official Shin Dong-churl.

Shin is a former Blue House secretary for national affairs and public communication. He was mostly responsible for connecting the Blue House with the National Assembly. Shin turned in his resignation the day before the general election earlier this month and has no prior experience in finance.

In response to the rumors, the Korean Financial Industry Union stressed that Shin has no prior experience and has longstanding connections with powerful politicians, which should disqualify him from the position.

“Appointing such a person as the auditor to the largest commercial bank in the country shouldn’t happen at all,” a union official said.

Some public financial companies already have several inexperienced government officials and lawmakers hailing from the Saenuri Party in high-ranking positions.

One of these is the Korea Deposit Insurance Corporation, which appointed Kim Young-back, a long-time politician who has made several failed attempts at running in the general elections, as a non-executive director.

“Parachute officials in most cases lack abilities and can’t do anything, and even if they are qualified, they tend to be focused only on short-term performance due to personal greed,” said Moon Hyong-koo, a professor of business management at Korea University. “In such cases, they will only harm the organization.”


BY CHO MIN-GEUN, KANG BYONG-CHOL AND LEE TAE-KYUNG [lee.hojeong@joongang.co.kr]



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