Never-ending corruption

The list of malpractices committed by a subsidiary of state-run Korea Electric Power Corporation (Kepco) underscores how corrupt a state entity can be when it is left unsupervised.

Police discovered that Kepco Knowledge, Data & Network Co. (KDN) lobbied lawmakers to block a bill unfavorable to its business.

In addition, police found numerous documents were cooked so that executives could divert a handsome sum of money for nonexistent business trip expenses.

In a separate case, prosecutors are investigating executives from the same company on charges of pocketing bribes and expensive gifts like sedans from their subcontractors.

In a stunning turn of events, one public company is under investigation by both police and prosecutors on different sets of corruption allegations.

Their lobbying skills were clever and well orchestrated. The company immediately formed a task force after a bill was proposed to restrict subsidiaries of large state companies from public software procurements to protect small and midsize software firms. They handpicked two lawmakers each from ruling and opposition parties to target. The lawmakers received 10 million won (about $9,000) to 18 million won each in political donations of about 100,000 won in the names of the company’s 500 employees. Kepco KDN attempted to take advantage of the current system that offers tax deductions for small political donations by identified individuals. Company executives also bought hundreds of books during occasional publication events organized by these lawmakers. In the end, the bill was passed without the restrictive clauses for public enterprises.

Kepco KDN’s employees and executives charged expenses of about 1.1 billion won for nonexistent business trips. Some senior officials were even indicted for receiving cars and cash bundles from a subcontractor. According to what the prosecution has found, the company won 13 contracts from Kepco KDN.

If all the charges are true, the company represents a composite of public-sector corruption. It received hefty graft from subcontractors in exchange for favors, fraudulently used corporate funds after fabricating documents and paid bribes to lawmakers to protect their interests. The government must set an example for the reform of public enterprises starting with this company. The four legislators also must be thoroughly investigated for their role in passing the law so that they can be brought to justice if the charges against them turn out to be true.

JoongAng Ilbo, Nov. 19, Page 34