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Golden parachutes for gov’t bigwigs still shining

‘Because the committee is given the authority to bend the rule, most civil servants win lawsuits.’
Oct 09,2013
Government efforts to put some holes in the golden parachutes given to retiring senior civil servants aren’t having much effect.

According to a recent analysis of 1,263 senior officials who retired from 2009 to 2013, 40 percent of high-ranking police officials found jobs in the insurance industry after surrendering their badges, while 24 percent of retiring senior prosecutors found jobs at Samsung, SK and KT.

The analysis also showed that 58 percent of top officials at the Financial Supervisory Commission (FSC) found jobs at banks and securities companies after leaving their government posts.

Representative Kim Jin-tae of the Saenuri Party commissioned professor Kim Woo-ju’s Intelligent Web Business Laboratory at Yonsei University to use a social network analysis method to study the data.

The study discovered that 63 out of 157 senior police officials who retired during the past five years found jobs at insurance companies.

Of the 70 retiring senior prosecutors, seven were hired by Samsung Group, while SK Group gave jobs to another five. KT hired four. They were mostly given positions as outside directors or senior in-house lawyers.

Of the 113 retiring officials at the FSC, 66 were hired by major banks and securities companies. Former senior officials of the Board of Audit and Inspection were also snapped up by the financial industry. Sixteen out of the 47 retired auditors found jobs in banking.

According to the analysis, senior officials from the Minister of National Defense were most active in finding jobs in the private sector after their retirement. The data showed that 225 of them are working in the private sector, while retired police officials came second.

Among conglomerates, Samsung Group was the most active in hiring retired senior public servants. It hired 118 of the 1,263 officials who retired over the past five years. Hyundai Motor and other Hyundai affiliates including Hyundai Heavy Industries hired 75 while SK Group hired 27.

“When retired senior officials end up in the private sector en masse and create their network, it will eventually corrupt the relationship between the government and industries,” said Representative Kim.

Kim blamed poor government screening of post-retirement jobs for civil servants. Under the current system, the Government Public Ethics Committee is in charge of that screening.

The Public Service Ethics Act requires senior public servants to wait for two years before working in a private sector job closely linked to the government posts they held for their final five years as a civil servant.

According to the data from the Ministry of Security and Public Administration obtained by Kim, 1,362 senior public servants were reviewed for their post-retirement jobs over the past five years and 1,263 of them passed the process.

The ministry’s data, however, showed that many civil servants asked the committee to shorten the two-year buffer period and 92.7 percent of those requests were accepted.

Even when applications for the new jobs were turned down, senior public servants easily challenged the restrictions and won. According to Kim, 10 former civil servants filed administrative suits to challenge the ethics committee’s decisions to stop their employments from 2005 to this year, and seven of them won. The government doesn’t make much effort to enforce its rules. Since 2006, only eight officials were investigated for violating the ban and only two were prosecuted and fined.

According to Kim, an Air Force brigadier general retired from his post in December 2007 and started working for a defense technology company in February 2008. Although the Government Public Ethics Committee ordered him to stop, he continued to work for the company and quit in February 2011. He later stood trial, but his conviction came with a slap-on-the-wrist 3 million won ($2,790) fine.

“Because the committee is given the authority to bend the rule, most of the civil servants win lawsuits,” Kim said. “The current system gives them the impression that they can easily win even if they have to go to trial.”

Lim Ji-bong, a professor of law at Sogang University, said the current law must be revised to stop the government-to-lobbyist revolving door from spinning.

“The current Public Service Ethics Act has many ambiguities in defining the possible conflict of interest between a post-retirement job and the civil servant,” said Lim. “The law must be revised to provide more clear restrictions.”

BY KIM KYUNG-HEE [myoja@joongang.co.kr]