The Korea Herald


[Editorial] Uproot subsidy fraud

Government inspection finds 10 NGOs pocketed subsidies of 1.74 billion won

By Korea Herald

Published : May 19, 2023 - 05:31

    • Link copied

Subsidy irregularities by some nongovernmental organizations detected through inspection by the government are shocking.

The Board of Audit and Inspection said on Tuesday it found that 10 NGOs are suspected of embezzling a total of 1.74 billion won ($1.3 million) from subsidies they received from the government. It also said that it had asked the police to investigate 73 people on charges of embezzlement, fraud and violation of the subsidy law.

The board selected NGOs whose accounting was dubious based on the government subsidy management system, news reports and tip-offs, and inspected them from August last year to February this year.

A nonprofit organization misappropriated 1.53 billion won from a subsidy of 2 billion to 3 billion won it received each year from the Ministry of Culture, Sports and Tourism and the Ministry of National Defense for participating in their project to encourage reading books in barracks.

A senior official of the group in collusion with its treasurer registered their acquaintances as false lecturers, paid them more than 138 million won in fees for a total of 407 lectures, and retrieved the money. The official even exaggerated the number of lectures.

They also used illicit tricks of overpaying suppliers then getting back the inflated portions, demanding suppliers return part of payments later for a reason that related projects were canceled and paying salaries to false employees. The embezzled money was spent on funding a business run by the official’s children, buying their homes and purchasing an equestrian horse for a granddaughter of the official.

The chief executive of a women’s rights group participated in a project of the Ministry of Gender Equality and Family to get certain documents accepted into the UNESCO Memory of the World Register. The executive often traveled abroad personally but filed false reports for work and received 100 days of wages in connection with the project. The official was found to have actually worked 27 days.

Another group participated in a project involving young residents of Ansan, Gyeonggi Province, from which many students lost their lives in the Sewol ferry sinking in 2014.

The group received the subsidy under the pretext of running a program in which young people read books on history and humanities and discuss them. However, it held seminars on North Korean leader Kim Jong-un's New Year messages and his late grandfather Kim Il-sung's anti-Japanese struggle. It could be said that tax was used for pro-North Korean instigation.

Government subsidies to private nonprofit organizations surged during the presidency of Moon Jae-in from 3.55 trillion won in 2016 to 5.44 trillion won in 2022. But the Moon administration did not check the use of such subsidies properly.

Nonprofits play an important role of supplementing the government, which cannot afford to address all societal problems intensively. Their mandate is to promote the public interest and serve the public good. Particularly, they are of a great help to the disadvantaged.

Owing to these contributions, tax money is being used to support them. Irregularities by some groups blinded by selfish interests and desires break down trust in the pure causes of other NGOs and shakes the foundation of a civic society.

Governments of the past concentrated support on civic groups that were on the same ideological wavelength. The Moon administration increased subsidies to nongovernmental organizations greatly, but managed their use poorly. Change of subsidy recipient groups depending on the governing philosophy of the administration is inevitable to some extent, but NGOs' behavior of lining the pockets of their executives and their families with subsidies must not recur.

The latest inspection must not end as a one-shot crackdown. The government ought to beef up its monitor of state subsidy continuously.

Subsidy embezzlement by entities in an NGO's clothing must come to light through a thorough investigation. Aside from criminal punishment of those involved, the embezzled money must be recovered in full.