Amid audit, opposition attacks

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Amid audit, opposition attacks

Opposition lawmakers launched an attack against the Park Geun-hye administration over the scandal involving two nonprofit foundations, powerful Park associates and conglomerates as the National Assembly resumed its audit of the government on Tuesday.

Rep. Woo Sang-ho, floor leader of the main opposition Minjoo Party of Korea, vowed in the morning that the remainder of the audit will be focused on suspicions surrounding the Mi-R Foundation and K-Sports Foundation. “The Legislation and Judiciary Committee and committees on economic issues will address the illegality of their creation and operation and allegations that they strong-armed conglomerates to raise massive funds,” he said. “The Education, Culture, Sports and Tourism Committee and other concerned committees will address the foundations’ abuses of power.”

The 20-day National Assembly audit of the government and public offices started on Sept. 26, but the ruling Saenuri Party boycotted the sessions to protest a motion, passed by the opposition parties, demanding the dismissal of Agricultural Minister Kim Jae-soo two days earlier. The boycott ended on Sunday and the audit resumed Tuesday.

The Mi-R Foundation was launched last October to encourage cultural exchange and support companies involved in cultural products. The K-Sports Foundation was opened last January to promote Korean sports. Within two days of its launch, the Mi-R Foundation collected 48.6 billion won ($43.9 million) from 19 conglomerates, including Samsung, Hyundai Motor, SK and LG groups. The K-Sports Foundation raised 38 billion won within six days of its launch.

“Whenever the government created a foundation to push forward a policy, companies habitually made contributions,” Rep. Ki Dong-min of the Minjoo Party said. “They had no choice because they didn’t want to displease the government. This also created a cozy relationship between the politicians and businesses.” He argued that the Federation of Korean Industries (FKI), the largest business lobby group representing mainly conglomerates, should be dismantled.

Following the scandal, the FKI said it will dismantle the two foundations and create a new cultural and sports foundation, promising transparency in its operation. But the move invited further criticism, as some claimed it involved Park associates and was an attempt to destroy evidence concerning the two foundations. Choi Soon-sil, a longtime friend of Park, was accused of using her influence in the creation and operation of the foundations. An Chong-bum, presidential senior secretary for policy coordination, was suspected of having strong-armed conglomerates to make massive contributions.

The People’s Party held a press conference on Tuesday during which Reps. Yoon Young-il and Choi Gyung-hwan said the Mi-R Foundation enjoyed a special benefit when Korea and Iran agreed to a project known as “K-Tower.”

When Park visited Iran in May, a memorandum of understanding was signed on the cooperation on construction of a cultural and business tower. The Farhangian Reserve Fund of the Islamic Republic of Iran, Korea Land and Housing Corporation and Posco Engineering and Construction signed the deal, they said.

The agreement concerned the building of a so-called K-Tower in Tehran and an I-Tower in Seoul. “One of the organizations to promote Korean cultural exchange will be the Mi-R Foundation, which was established by 16 Korean companies,” Article 2 of the memorandum of understanding stated. The lawmakers said an investigation should take place into the arrangement.

“It was extremely rare that a particular private group was stipulated in a memorandum of understanding signed by cabinet members during the president’s state visit,” Choi said. “The operator should have been decided later through bidding to ensure transparency, but that process was skipped and the Mi-R was specified. This has fueled suspicion that some powerful people actually influenced the decision.”

They also said it was questionable how the Land and Housing Corporation discovered the newly created foundation and named it as the operator. They said the state-run company must clearly reveal who it consulted to award the project to the Mi-R.

At the Strategy and Finance Committee, Rep. Kim Jong-min said Prime Minister Hwang Kyo-an must have lied about the government’s unusually speedy authorization of the two foundations. They were authorized to launch only one day after filing applications, and Hwang said last month that these were not exceptions, as there have been similar cases in the past.

Since the Lee Myung-bak administration, Kim said, only three foundations have obtained permission one day after filing applications - and these instances involved government-sponsored groups for the 2013 Universiade in Gwangju, the 2022 World Cup games and 2018 Pyongyang Winter Olympic games.

“From 2008 until this year, 149 nonprofit foundations were established and it took on average 27 days for their applications to be processed. Only the Mi-R and K-Sports foundations won the permits one day later,” he said. “Either Hwang lied, or he was falsely briefed.”

BY SER MYO-JA [ser.myoja@joongang.co.kr]

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