Speaking on October 23 at a meeting with his senior presidential secretaries, Moon excoriated the existence of corrupt hiring practices, setting the wheels in motion for what is now a sweeping investigation into financial services firms and public institutions at the provincial and national level. (Image: Yonhap)
SEOUL, Nov. 8 (Korea Bizwire) — “Looking at the recent corrupt hiring practices revealed at certain public institutions, the extent makes one wonder whether corruption has become the norm rather than the exception.”
Speaking on October 23 at a meeting with his senior presidential secretaries, Moon excoriated the existence of corrupt hiring practices, setting the wheels in motion for what is now a sweeping investigation into financial services firms and public institutions at the provincial and national level.
Moon’s outrage was in response to a pair of corrupt hiring cases that surfaced recently. On September 11, The Hankyoreh reported casino Kangwon Land had through an internal investigation uncovered illegal hiring practices conducted in 2012 and 2013. Though the presence of wrongful hiring was in itself perhaps not shock-inducing, the number of employees hired through such means certainly was. Of the 518 employees hired, 493 of them had been employed on the strength of improper solicitation by another party, a clear violation of The Improper Solicitation and Graft Act.
While the public reeled from the revelations that a state-owned enterprise had engaged in nepotism to the tune of 95 percent of all staff hires, more was to follow. On October 17, National Assembly Member Sim Sang-jung disclosed in a parliamentary inspection of the Financial Supervisory Service that Woori Bank had given an unfair advantage to 16 entry-level employees hired in 2016, recruits that were related in one way or another to persons of interest to the bank, the National Intelligence Service and the Financial Supervisory Service.
On September 11, The Hankyoreh reported casino Kangwon Land had through an internal investigation uncovered illegal hiring practices in 2012 and 2013. (Image: Yonhap)
As “corrupt hiring” became a widely recognized keyword, with the Woori Bank and Kangwon Land stories gaining significant traction in the media, Moon’s order at the October 23 secretaries’ meeting to investigate and punish all perpetrators guilty of corrupt hiring has unleashed the full force of the government.
Currently, the National Police Agency, the Prosecution Service and the Financial Supervisory Service are each spearheading investigations into the past five years of hiring practices at 1,100 public institutions. Already, about 40 public institutions and commercial banks are either suspected of or are somehow linked to direct and/or indirect involvement in corrupt hiring practices, according to the Ministry of Strategy and Finance.
Among the guilty suspects are state-owned enterprises like the Korea District Heat Corp and the Korea Electric Power Corporation, workplaces considered “dream jobs” for their job security. Public anger was already palpable due to the scandal at Woori Bank, which led to three manager-level employees losing their jobs and ultimately resulted in the resignation of bank director Lee Kwang-gu.
The regulatory agencies themselves are not immune to the probe, as former assistant deputy director Lee Byeong-sam found out when he was arrested on November 3 on charges of fabricating select job applicants’ work experience, among other actions, last year. Lee bears the ignominy of being the first individual arrested for corrupt hiring practices under the Moon administration.
In a country where unemployment continues to be a problem, with figures provided by the OECD showing the month-on-month unemployment growth rate to be the highest among 25 member countries in August (except Austria), lack of opportunities is keenly felt here. Referred to as “parachuting in”, the occurrence of nepotism is no secret to South Koreans; chances are most have suffered or know of a story where “the boss’s friend’s son” has swooped in for a job that applicants prepare for months in advance.
Public anger was already palpable due to the scandal at Woori Bank, which led to three manager-level employees losing their jobs and ultimately resulted in the resignation of bank director Lee Kwang-gu. Bank jobs are also highly coveted for their job security. (Image: Yonhap)
Furthermore, with concerns that income inequality may be growing, reports that the average salary among the public institutions being investigated amounts to 74.4 million won (led by the Korea Racing Authority with an average salary of 95 million won) have only stoked the flames.
The government is hoping the prevailing societal sentiment will aid in its investigations. Multiple government agencies including the National Police Agency have created online and offline reporting systems in a bid to encourage whistleblowers to step forward. Sources in the financial industry have made the point that institutions, either deliberately or simply by following through on company protocol, have gotten rid of documents that would be the only evidence for building a case, hamstringing investigative efforts. As such, testimony by witnesses will be crucial and are to be investigated thoroughly.
Despite Moon’s well-meaning intentions, there are voices expressing skepticism as to whether the investigations will truly be able to stamp out corrupt hiring practices. One financial services industry veteran pointed out that the numerous cases being brought to light were proof that the culture itself was corrupt, and had been entrenched for a long time.
“It appears to me that there are limits to preventing future occurrences or unearthing every case of corrupt hiring by investigating the last five years or so,” he said.
S.B.W. (sbw266@koreabizwire.com)
