On Thursday the Board of Audit and Inspection (BAI) announced the results of its inquiry into the Haengdam Island development project. At the center of its findings is the fact that the original plan of bringing in foreign investment went awry and so it essentially became the personal project of Kim Jae Bok, and yet the former head of the Korea Highway Corporation and certain figures in Cheong Wa Dae went to unreasonable ends to support the endeavor. Ultimately that left the highway corporation in risk of financial loss for agreeing to purchase shares in the Haengdam Island Development Company at a high price.
The whole process through which the project was pursued was a mess, and that was the case for both government and private involvement. The Ministry of Construction and Transportation approved of the project when it should not have, the Ministry of Maritime Affairs and Fisheries approved of the plans when they were not compliant with the rules. The president of the highway corporation ignored the advice of the legal experts in agreeing to buy shares in the development company. There were abnormalities in the credit rating company's appraisal of the company's corporate bonds and in the aquisition of those corporate bonds by Korea Post and the Korean Teachers' Credit Union. It is possible that dirty money changed hands in that whole during all that, but BAI does not have criminal investigative authority and so was unable to clarify if that was the case. The prosecution will have to carry out a thorough investigation.
Former Cheong Wa Dae senior secretary for personnel affairs Jeong Chan Yong, former Presidential Committee on Northeast Asian Cooperation chairman Moon Chung In, and presidential secretary for economic policies Jung Tae In all went too far in assisting Kim in what was in fact his personal project in order to have Kim's help in the so-called "Southwest Coast development project." They exceeded their authority in doing so, but BAI says their actions call only for official censure and that a criminal complaint would be difficult. One cannot indiscriminately fault BAI for its cautious interpretation of the law. It would only be natural for the prosecution, however, to actively survey the law to see whether they can be prosecuted for abuse of authority.
Kim is being charged with breach of trust. The Haengdam Island development project will continue, but at this point it is unclear whether it will proceed as originally planned. The contract stipulates that the Korea Highway Corporation gets a 10 percent stake in the project, and agrees to purchase 26.1 percent later on. There urgently needs to be clear follow-up action that minimizes the highway corporation's losses.
The Hankyoreh, 17 June 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Be Thorough With Haengdam Island |
