LH→Controversy Over Real Estate Speculation Moved to Civil Servant Special Supply, Police Still 'Watching'

Special Investigation Unit Observed by the Board of Audit and Inspection

Customs Valuation and Classification Institute building. [Image source=Yonhap News]

[Asia Economy Reporter Lee Gwan-ju] The real estate speculation allegations triggered by Korea Land and Housing Corporation (LH) are spreading to the 'special supply for public officials' (special supply). However, the government joint special investigation headquarters (Special Investigation Headquarters) has stated that it will first wait for the investigation results from the Office for Government Policy Coordination and the Board of Audit and Inspection.

The controversy over special supply for apartments in Sejong City originated from the 'ghost building' of the Korea Customs Service's Customs Valuation and Classification Institute (Customs Valuation Institute). Despite not being a target for relocation to Sejong City, the construction of the building was forcibly carried out aiming for special supply, and employees are suspected of receiving special allocations and gaining several hundred million won in market price differences.

Through the construction of the ghost building, 49 out of 82 Customs Valuation Institute employees received apartments through special supply. They even received acquisition tax reduction benefits on the grounds of being public officials relocating to Sejong.

Following this, controversy over special supply at the Ministry of SMEs and Startups also emerged. It was decided to grant special supply qualifications for five years starting July 1 next year to Ministry officials relocating from Daejeon to Sejong by August. However, since the distance between the government Daejeon office and Sejong office is only about 20 to 30 minutes by car, there are concerns that this is an excessive privilege.

As criticism of special supply continued, the ruling Democratic Party, government, and Blue House decided on the 28th to abolish the special supply system for public officials' apartments in Sejong City. In addition, the three opposition parties?the People Power Party, the People Party, and the Justice Party?have demanded a national audit. In response, the ruling party expressed reluctance, saying, "We need to wait for the police investigation."

In fact, police investigations related to the Customs Valuation Institute's special supply have not yet been conducted. A Special Investigation Headquarters official recently told reporters, "No complaints or investigation requests have been received by us (police) yet." He added, "We are monitoring the situation as we heard that the Board of Audit and Inspection is looking into it."

Summarizing these points, the controversy over special supply is expected to be first examined by the Office for Government Policy Coordination and the Board of Audit and Inspection, and if illegal activities are found, it will proceed to formal investigation through a request for investigation. Prime Minister Kim Boo-kyum ordered a strict investigation on the 18th to the Sejong Special Self-Governing City Support Group of the Office for Government Policy Coordination and the Public Service Management Office following the Customs Valuation Institute controversy. He instructed that necessary measures such as requesting an investigation be taken if illegalities are confirmed. The Board of Audit and Inspection also stated that, in addition to the Korea Customs Service, the Ministry of Economy and Finance, the Administrative City Construction Agency (Happy City), and the Ministry of the Interior and Safety could be subjects of audit related to this incident.

The problem arises if illegal profits were gained through special supply. The consensus is that investigation by law enforcement agencies is necessary to recover such profits. It also needs to be reviewed whether unfair gains can actually be recovered. Depending on how promptly the Office for Government Policy Coordination and the Board of Audit and Inspection act, the Special Investigation Headquarters' decision to start an investigation will also be affected.

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