A half-baked probeDeputy Prime Minister for Economic Affairs Hong Nam-ki apologized for the wrongdoings of employees of the Korea Land and Housing Corp. (LH). He vowed zero tolerance for the employees found to have committed speculation and a seizure of their ill-gotten gains. Hong said the government would force civil servants involved with redevelopment and housing policy to report their property transactions. The announcement was made on Sunday with ministers of the interior and safety, land, infrastructure and transport, the prime minister’s chief of staff and head of the National Tax Service. Despite the grandiose manner, the announcement lacked substance.
The government and ruling Democratic Party (DP) have already vowed punitive actions after the investigation. The people know that LH employees won’t be punished just because they purchased land in areas designated for a new town project. They will face criminal action if they are found to have used insider information or gotten loans in illicit ways.
The seizure of ill-gotten property gains is also hard to understand. Profits can only be made after the sale of the land or reception of compensation from the government. Proving them to be illegal gains can be difficult. The mandate on government employees to report land transactions also raises concerns as they could make the purchases through the names of relatives or acquaintances.
The people won’t be satisfied unless they see real results. Many senior government employees or politicians could have also made investments through insider tips. A comprehensive investigation on transactions on all major real estate projects should come first.
The government has left the case in the hands of the Land Ministry and the new national investigation headquarters in the police. The government has left out the prosecution which has expertise in cracking down on property speculators. The move raises suspicion of trying to restrict the investigation to LH employees and prevent it spilling over to higher government employees.
A poll by the JoongAng Ilbo showed a plunge in approval rating for President Moon and the DP. Their promise of generous relief checks has not helped. Many are angered by the real estate mess and scandal. The Blue House, government and DP must read the graveness of the situation as a collective crisis is looming due to broad distrust in the administration.