Financial Public Enterprises One After Another 'Jeongpia'... The Unending Practice of Favoritism in Personnel Appointments (Comprehensive)

Forecast, Controversy Over 'Nakhwasan Insas' Amid Successive Political Figures
Public Enterprises Seeking Director and Auditor Candidates... Will the Same Practice Repeat?

[Asia Economy Reporter Song Seung-seop] Political figures with no expertise, known as ‘Jeongpia (Politics + Mafia),’ are continuously entering key positions in financial public enterprises. In particular, there are concerns that the typical ‘reward appointments’ practice at the end of administrations is being repeated in the position of standing auditor, which is supposed to monitor the misconduct and duties of the management.

According to the financial sector on the 4th, the Korea Deposit Insurance Corporation appointed Park Sang-jin, a former senior specialist of the National Assembly, as a new standing director on the 2nd. Park, who began his public service career after passing the legislative exam in 1995, ran as a Democratic Party preliminary candidate for Sokcho, Inje, Goseong, and Yangyang in last year’s general election. The term for a standing director is two years, and the president appoints them directly.

With this, the number of ruling party officials appointed as directors at KDIC under the Moon Jae-in administration has increased to three. Lee Han-gyu, appointed as auditor in October, is a former policy director of the Democratic Party. Kim Young-gil, the predecessor of Park as standing director, also served as policy director of the Democratic Party’s Policy Committee. Given the nature of managing public funds, external experts were mainly appointed, but officials from the same party have consecutively occupied key positions.

The same applies to other public institutions. Kim Jong-cheol, auditor of the Export-Import Bank of Korea, previously served as the representative lawyer of the law firm Sae Seoul. He is an alumnus of Kyung Hee University’s law department, like President Moon Jae-in, and provided legal advice during the presidential campaign, sparking parachute appointment controversies. He also served as an ethics review advisory committee member in the National Assembly and as a legal advisor to the Ministry of Health and Welfare.

Earlier, Lee In-soo, newly appointed auditor of the Korea Asset Management Corporation (KAMCO) and former chairman of the Cambodia Securities Exchange, faced controversy even before starting work. Although appointed by the president through an open recruitment process, the labor union strongly opposed him, citing a lack of expertise and experience, and even staged protests to block his entry.

Appointed via parachute instead of building expertise... Will the practice repeat with successors?

The auditor role in financial institutions involves auditing operations and accounting, and monitoring and checking management. The main task is to support internal control and systematic organizational management. However, despite the importance of the position, the reality is that the so-called ‘parachute’ practice has taken root.

Attention is also focused on successors to auditors of public enterprises whose terms expire one after another starting this month. The term of Lee Dong-yoon, auditor of the Korea Housing Finance Corporation, ends on the 8th. Lee served as the head of external cooperation for the Busan City Election Countermeasures Committee during Moon Jae-in’s presidential campaign.

The term of Park Se-gyu, auditor of the Korea Technology Finance Corporation, also ends this month. Park is a former operating committee member of the Damjaengi Forum. The Damjaengi Forum was formed on May 30, 2012, by about 50 university professors from the Busan and Gyeongnam regions to support Moon Jae-in, then the standing advisor of the Democratic United Party. In May, the terms of pro-government auditors, including Jeong Gyun-young of the Korea Minting and Security Printing Corporation, as well as those at the Korea Racing Authority, Korea East-West Power, and Korea Western Power, are also set to expire.

Professor Kim Dae-jong of Sejong University’s Department of Business Administration pointed out, "Even administrations that refrained from parachute appointments immediately after winning elections are now making such appointments as their terms near expiration. Considering that public institutions usually have terms of about 3 to 4 years, they expect political figures remaining in public institutions to assist even if the administration changes." He added, "Especially in financial public enterprises, where expertise is crucial, it is very concerning that parachute appointees lacking expertise are coming in."

This content was produced with the assistance of AI translation services.