Second whistle-blower takes on Moon

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Second whistle-blower takes on Moon


Presidential Chief of Staff Im Jong-seok, left, talks with Cho Kuk, right, presidential senior secretary for civil affairs, at a hearing held by the House Steering Committee of the National Assembly on Monday. [KIM KYUNG-ROK]

A whistle-blower claims the Moon Jae-in Blue House tried to change the CEO of Korea Tobacco & Ginseng (KT&G) - despite the fact that Korea’s largest tobacco company is a private company.

Shin Jae-min, 32, who identified himself as a former deputy director of the Ministry of Economy and Finance, alleged that the presidential office ordered the Finance Ministry to pressure the Industrial Bank of Korea to block the KT&G’s CEO from serving a second consecutive term in a KT&G shareholders’ meeting. The government is the largest stakeholder in that bank. The bank, a public company, is the second largest stakeholder in KT&G.

But the Blue House’s effort was in vain, claimed the former government official, because foreign shareholders of KT&G protested the move to sack the CEO. The CEO was eventually re-elected.

Shin relayed the claims in a YouTube video that ran for 12 minutes and 33 seconds and which was uploaded on his personal channel last Saturday. Shin asserted he was aware of the shady attempt because he had worked in the ministry until last July before leaving the public service.

Shin didn’t mention when the Blue House handed down the order, but KT&G’s CEO Baek Bok-in was re-elected last March. Nor did Shin explain why the Blue House wanted Baek fired from the post.

Shin said he was aware of the Blue House maneuver because he personally heard about it while working in the ministry, but did not name his sources. Shin said he saw a report on the Blue House’s instruction in the deputy finance minister’s office around that time, inducing him to believe the deputy minister was aware of the Blue House’s intervention.

Shin, a Korea University graduate who passed the civil service exam in 2012, said he officially started his public service career in 2014 as a fifth-grade official in the country’s nine-rank public servant system.

Shin said he decided to go public with the Moon administration’s attempt because he hoped the Moon government would make good on its pledge to eradicate jeokpye, or “deep-rooted evils,” allowing civil servants to work without shame.

Previous administrations have been accused of trying to control the chief executives of KT&G and other private sector companies like steel giant Posco, especially those that used to be state-owned. Moon said his government would not follow such bad practices of the past.

Shin confided he tried whistle-blowing to local broadcaster MBC last May, but the report fizzled out.

Officials from the Blue House’s senior secretary for civil affairs office and the prime minister’s office clamped down on Shin’s Treasury Division after the MBC report was aired to track down the whistle-blower, said Shin, who added it was “painful” to pretend he was innocent.

In the end, the Blue House failed to hold him accountable for the leak, but Shin said it was emotionally hard for him to continue serving the government and thought he needed to convey his thoughts on the administration’s corruption to the general public in a better way.

Another reason why he was coming clean now, Shin continued, is because he signed a contract with MegaStudy, a major private education institute, a few months ago to teach students but found himself in a conundrum: He had to explain why he left the bureaucracy, a much-coveted profession in Korean society.

The Finance Ministry adamantly denied Shin’s statements in a press conference on Monday and said the Blue House never ordered the ministry to replace KT&G’s CEO. Koo Yoon-cheol, second vice minister of finance, vowed to take “necessary measures” against Shin when asked by reporters whether the government planned to take legal action against its former employee. The Blue House referred reporters’ questions on the issue to the Finance Ministry.

At one point in Shin’s YouTube video, he also accused the Moon Blue House of trying to replace the CEO of Seoul Shinmun, a left-leaning private newspaper based in Seoul. But Shin didn’t go into details.

In a text message to Blue House correspondents on Monday morning, Yoon Young-chan, presidential senior secretary for public affairs, vaguely said that the former chief executive of the newspaper served two more months after his original term ended due to a delay in procedures trying to appoint his successor.

Yoon went on to say “your colleagues” at Seoul Shinmun would know better whether the Blue House tried to change the CEO of the newspaper and told reporters to “reference the point” that the Finance Ministry is the largest shareholder of the company. Yoon called Shin’s claims “deeply regrettable.”

The newspaper said Monday in a statement that the Finance Ministry is the largest stakeholder of Seoul Shinmun, owning 33.86 percent in September, and that it chose a new CEO in early 2017 based on a “legal process,” inferring that the government had a large say in who would lead the newspaper next.

In a second video uploaded on his YouTube channel Sunday, Shin claimed that the Blue House “forcefully ordered” the Finance Ministry in late 2017 to issue 4 trillion won ($3.6 billion) worth of deficit-covering bonds despite opposition from the ministry, which feared the increase in national debt. Deficit-covering bonds are normally issued when the state’s spending exceeds tax revenues. The problem with the Blue House’s order, said Shin, was that tax revenues were actually higher in late 2017 than what the Finance Ministry first expected, leading the ministry to believe it could reduce the issuance of bonds.

But Shin quoted then-Finance Minister Kim Dong-yeon as saying that it was a “political judgement” not to reduce the issuance of state bonds in 2017, when Moon replaced former President Park Geun-hye in a snap election that May, because lowering the national debt-to-GDP ratio in the 2017 calendar year would make the past administration look good.

Had the government refused to carry out the Blue House’s order, the government could have saved at least 200 billion won or more in annual interest, Shin said.

The Finance Ministry refuted Shin’s claim on Monday that it was pressured by the Blue House, saying the decision to issue 4 trillion won worth of deficit-covering bonds was based on “internal debate.” Koo, the second vice minister of finance, said in a press conference Monday that he did not know the exact wording when asked whether former Finance Minister Kim referred to a “political judgement” from the Blue House.

Shin was the second whistle-blower in December to go after the Blue House after a former investigator at the Blue House special inspection bureau started leaking confidential information from his time at the office to the local press on Dec. 14. That first whistle-blower, Kim Tae-wu, accused the Moon Blue House of spying on private citizens and covering up corruption allegations about prominent figures close to the president.

Im Jong-seok, Moon’s chief of staff, and Cho Kuk, Moon’s senior secretary for civil affairs, appeared at the National Assembly on Monday to answer questions from lawmakers on the parliamentary House Steering Committee about the mushrooming surveillance scandal, but denied any blame on the Blue House. Cho blamed the former Blue House inspector of lying about his “lawful” work at the Blue House, stressing that Moon’s office has not once, “unlike the former administration,” spied on private citizens or made a blacklist. Cho continued he would have to be immediately fired if he ordered the Blue House special inspection bureau, which falls under his control, to spy on private citizens.

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