Government and Ruling Party at Peak Crisis, Card to Expand Public Officials' Asset Disclosure

'2·4 Supply Plan' Loses Momentum Amid Speculation Obstacles... "Regime Failure" Criticism Intensifies
Real Estate Registration System Expanded to All Public Officials Below Grade 5 and Public Institution Employees
Retiree Investigations Lagging, May Remain Mere Slogan of 'Root Cause Eradication'

[Asia Economy Reporters Jo Gang-wook and Moon Je-won] The government and ruling party's push for a pre-reporting system for all public officials' real estate property registration and transactions appears to reflect the heightened sense of crisis over the recent allegations of land speculation by employees of Korea Land and Housing Corporation (LH) related to the 3rd New Town development. The '2·4 Supply Plan,' introduced as a measure to curb soaring housing prices, has lost momentum due to speculation scandals, and even civic groups are pouring criticism, calling it a 'failure of the administration.'

However, despite this declaration of a 'war on speculation,' suspicions of speculative activities among public officials are spreading widely across regions and ranks, leading to criticisms that these measures are merely too little, too late. It is practically impossible not only to uncover suspicions of proxy ownership and insider information use but also to retroactively apply sanctions to recover speculative profits accrued to date.

◆ Speculation keeps emerging... Expansion of property disclosure = The real estate speculation allegations triggered by the LH scandal have revealed the raw truth that speculation is occurring nationwide, centered on planned development sites such as new towns and industrial complexes, involving public officials and politicians in a comprehensive manner. Accordingly, the ruling party, government, and the Blue House announced on the 19th a plan to register all public officials' real estate assets and introduce a pre-reporting system for real estate transactions. This reflects a determination to transparently disclose all public officials' assets and comprehensively prevent wealth accumulation through the use of insider information. Especially amid widespread distrust of the government and local governments' own investigation results and persistent public anger, which has even altered the political landscape of the Seoul and Busan mayoral by-elections, threatening the ruling party's political base, this can be seen as a kind of 'extreme remedy.'

The real estate registration system plans to expand the current obligation to register assets, which applies to public officials at grade 4 and above, to include public officials at grade 5 and below involved in real estate policy and all employees of public institutions. The real estate reporting system requires public officials involved in real estate policy and employees of public institutions to report every real estate (land and housing) transaction to their institution heads. The government’s plan is to recover up to five times the amount of any unfair gains. However, there are criticisms that while the scope emphasizing 'all public officials' is broad, it lacks detailed investigative guidelines for issues such as proxy transactions.

Professor Cho Ju-hyun of Konkuk University’s Department of Real Estate said, "I fully understand the government and ruling party’s determination," but added, "The important thing is not the scope of 'all,' but rather focusing intensively on areas with conflicts of interest. If that is not done, it could end up being merely a show."

Prime Minister Chung Sye-kyun, Acting Leader of the Democratic Party Kim Tae-nyeon, and Chief Presidential Secretary for Policy Kim Sang-jo attended a high-level party-government-Cheongwadae meeting on measures to eradicate real estate speculation held at the National Assembly on the 19th. They are turning away after taking a commemorative photo. Photo by Yoon Dong-ju doso7@

◆ Investigation of retirees and retroactive application of recovery impossible = Despite these measures, concerns remain that investigations into former public officials, including LH retirees, are superficial, raising fears that rooting out speculation among public officials may remain just a slogan. Moreover, the 3 to 5 times recovery measure for unfairly obtained profits faces challenges in proving 'use of confidential information' and controversies over retroactive application, making its actual feasibility uncertain. Among the 20 LH employees implicated in the 3rd New Town land speculation allegations, some purchased land whose official price has doubled over the past 10 years.

Even if current and former employees are prosecuted for violating the Anti-Corruption Act and convicted, the current forfeiture system is practically difficult to apply because land compensation has not been made. It is known that about 1,500 LH retirees from 2013, when the government decided to investigate, until last year are subject to investigation.

There is also criticism of the government’s delay in mentioning LH organizational restructuring plans and especially using this speculation scandal as a justification for establishing another 'roof-on-roof' supervisory body called the 'Real Estate Transaction Analysis Institute.'

Seo Jin-hyung, president of the Korea Real Estate Society and professor at Gyeongin Women’s University, pointed out, "Various measures are being discussed to prevent a recurrence of incidents like the LH scandal, but they are only temporary measures," adding, "The standards for public officials’ real estate transactions should be strengthened, and ordinary citizens should be allowed freer transactions. However, given the nature and purpose of the Analysis Institute, it is likely to pressure ordinary citizens’ real estate transactions, which could lead to the opposite effect."

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