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Governance

Early awareness of corruption

Anti-Corruption Policies and Measures in the Korean Government
 
Early Awareness of Corruption: The Foundation of the Republic to the End of the Second Republic (1961)
 
(1) Early Governmental Approach to Corruption
“No sacred nation can arise out of a corrupt people. To found a sacred nation, the people must renew their spirit and disavow old and corrupt practices on a daily basis.” These were the resolute words uttered by Rhee Syngman, the first president of the newly born Republic of Korea, in his inaugural address. Though at the outset the Rhee government showed strong determination to combat and eliminate corruption in government and politics, and emphasized morality and dedication to the nation in public and civil service, it failed to distinguish corruption and bribery from other misdemeanors or felonies. That is, people understood corruption in the very narrow sense of it involving bribery or other similar deviations from law, and blamed aberrant and crooked individual public officials and government employees for its rise. The main measures and activities for tackling and preventing corruption thus amounted to ordinary audits and inspections performed by individual agencies.

As a matter of fact, the First Republic under the Rhee administration was plagued with chronic corruption, and the governmental measures taken by the President to combat it merely perfunctory. It was after the Second Republic arose that corruption began to be perceived as a particular form of political evil having its roots in dictatorship and tyranny.
 
(2) Anti-Corruption Measures of the Early Korean Government
 
1) Organizational measures
The Korean government adopted various measures to fight and prevent corruption in its earliest days (during the First and Second Republics), which centrally revolved around a number of governmental bodies, namely, the Accounting Office (1948-1963)[1]; the Inspection Board (1948-1955, and 1961-1963)[2]; and the Audit and Inspection Board (1955-1961).[3] The Accounting Office was the main authority on government accounting and inspection, with its statutory grounds found in the Accounting Office Act (Law 12), passed on December 4, 1948, and the Presidential Decree on the Accounting Office (Decree 51), declared on January 18, 1949. With the enactment of the National Government Organization Act (NGOA) on July 17, 1948, the Inspection Board was also set up as another governmental anti-corruption body. The main function of the Accounting Office was to oversee the accounting practices of civil servants and institutionalize accounting principles and standards in the early days of the fledgling republic that was in dire need of a public finance system and government accounting criteria.

Unlike the Accounting Office that was in charge of inspecting accounting results and practices government-wide, the Inspection Board was responsible for identifying and investigating allegations of corruption and wrongdoing by government employees so as to ensure the integrity of public service. It was, in other words, a body of duty inspection. In its early days, the Inspection Board wielded considerable power, as it was given the legal authority to seek out and determine disciplinary measures for all government employees proven guilty of any wrongdoing, irrespective of ranks or titles, be they the President, the Vice-President, the Prime Minister, Cabinet members, the head of the Accounting Office, judges, or other high-ranking public officials. The Inspection Board attempted to live up to its mission statement and ideals at first, investigating charges of misappropriation and bribery involving the ministers of agriculture and commerce & industry, even voting to expel them from their posts. In investigating and handling corrupt practices of the central members of the government elite, however, the Inspection Board frequently ran into conflicts with suspects. The Board was consequently abolished after the NGOA was amended on February 7, 1955, and replaced with the Audit and Inspection Board in November 1955 (Hwang, 1992).
Unlike the Inspection Board that probed allegations of corruption and wrongdoing by high-ranking officials in central governmental bodies, the Audit and Inspection Board, founded by a presidential decree, focused on the investigation of mid- and low-level public officials in corruption-prone agencies and organizations, such as police departments and tax offices.[4] Where the Inspection Board was granted the authority to decide whether public officials proven guilty of illegal and other forms of wrongdoing should be subject to disciplinary actions, the Audit and Inspection Board had no such power. The latter was authorized to report its investigation findings to either those in charge of appointing lower-level officials or the Disciplinary Committee only. Struggling under intensified political pressure, the Audit and Inspection Board was finally shut down under the pretext of organizational simplification, following Cabinet Decree 68 of August 29, 1960.

 The Inspection Board was revived in 1961, in the aftermath of the Audit and Inspection Board’s abolition, and was made to report its findings to the Prime Minister. The resurrected Inspection Board found its range of power and authority quite limited, however, as the military came to occupy the government. The new Inspection Board at first focused on investigating charges of corruption and wrongdoing by public officials and employees, and by the board members of government-operated enterprises. However, its scope of responsibilities broadened over time to include the auditing of all the administrative tasks of various organizations, and the eliminating of problems uncovered in the audit process. Whereas the former Inspection Board fixated on individual incidents of corruption, the later Inspection Board turned its focus to assessing the state of ethics across entire governmental organizations, thus showing signs that a new, more organization-centered approach to corruption was coming into being (BAI, 1998).

This dual system of audit and inspection, with two separate bodies handling government accounting and on-duty inspection separately, lasted until the end of the Second Republic. Nevertheless, anti-corruption efforts did not bear much fruit since the organizations in charge of such efforts so manifestly lacked independence. Governmental anti-corruption measures and activities in the first two Republics amounted to the audit and inspection of fragmented, individual incidents of corruption. Anti-corruption organizations, moreover, came to lose their power and significance as they failed to investigate and censure corrupt high-ranking officials and authorities under President Rhee’s prolonged one-man rule. Presidential heavy-handedness limited the ability of audit and inspection organizations to maintain political neutrality and effectively carry out the investigation and disciplining of powerful and corrupt officials throughout the First Republic. The Second Republic arose mainly in reaction against the pervasive corruption across Korean society that had been inspired by the corruption of the leading class. The Second Republic thus attempted to approach corruption in a very strict, rigorous, and powerful manner, resurrecting the Inspection Board. Nevertheless, the new Inspection Board’s function and authority remained quite limited, a situation highly problematic since government-wide anti-corruption efforts centered entirely on the Inspection Board’s (restricted) actions. In essence, the Inspection Board all but lost its power to perform its intended function after the military came to power.
 
2) Legal and institutional measures
The Government Employees Act (GEA), another piece of anti-corruption legislation, was enacted and promulgated by the First Republic on August 12, 1949. The GEA acted as the main legislative instrument to fight corruption, detailing the duties and obligations of government employees and the disciplinary actions should these not be fulfilled in an attempt to realize transparency and fairness. It also guaranteed the status of government employees. The Second Republic, for its part, enacted the Law on the Punishment of Electoral Frauds on December 31, 1960, defining the high-ranking officials, financial institutions, party executives, and the like who were involved in the fraudulent elections of March 15 as subject to punishment under law for their illegal actions. The Second Republic saw legislation and measures for preventing corruption multiply fueled by the strong desire of the new leaders to abolish the legacy of corruption left by the First Republic. Thus retroactive legislation was passed, including the Law on the Punishment of Antinational Activities (enacted on July 17, 1948) and the Law on the Punishment of Electoral Frauds. Moreover, the Special Penal Law on Illegally Amassed Wealth, enacted on April 15, 1961, was the first ever legislation in Korean history to define unfair and corrupt political practices and politicians themselves as serious targets of governmental anti-corruption efforts.
 
3) Ex-post control of corruption
In the early days of the Korean government, anti-corruption activities mostly amounted to the ex-post control, by institutions responsible for the inspection and auditing of accounting and duties, of corruption that already took place. During its career of 14 years and six months, the Accounting Office identified 43,721 cases of corruption in total, and ordered a total of KRW 290 million in damages in 3,570 (eight percent) of those cases. Requests for corrections were filed in 17,793 cases, KRW 1.9 billion or so in total were collected in fines and damages, 14,895 individuals were disciplined or censured, and 179 cases became grounds for legal, institutional, and administrative changes and improvements. In its early days, when it had the authority to conduct inspection of duties, the Inspection Board investigated and confirmed that the Ministers of Agriculture and Commerce had embezzled the budgets and received bribes for spending on elections. The Inspection Board countered these cases of corruption in the core elite with strong measures, including the removal of the officials involved from their posts. While some of the records on the Inspection Board were lost during the Korean War, the extant records tell us that the Inspection Board subjected at least 241 individuals to official disciplinary measures in and after 1951, with 53 percent or 128 of them removed from their posts. Almost 40 percent or 96 of these disciplined individuals were high-ranking officials in the government (BAI, 1998). The later Inspection Board, with its broader focus on organization-wide corruption, subjected a total of 212 individuals to disciplinary measures, requested 2,692 corrective measures, and reported 326 individuals to the police and prosecutors throughout the two years of its existence before it was finally merged with the Board of Audit and Inspection (BAI) in 1963 (BAI, 1998). By contrast, the Audit and Inspection Board that replaced the original Inspection Board, served disciplinary notices against 372 government employees found to be involved in 156 cases of corruption investigated between November 1955 and August 1960. An overwhelming majority of government employees subjected to disciplinary measures were at the Grade 4 or lower level, suggesting that the Audit and Inspection Board, in comparison to the Inspection Board, focused more on finding fault with lower-ranking officials than with their higher-ranking counterparts.
 
(3) Characteristics and Outcomes of Early Governmental Anti-Corruption Measures
The First Republic got off to an ambitious start, as far as anti-corruption efforts were concerned. However, the ideal of integrity it aspired to achieve gradually lost meaning over time, as President Rhee and his corrupt officials held on to power for 12 years,, failed to put anti-corruption on the policy agenda as a pressing issue, and avoided making commitments to fighting and ending corruption. The era of the First Republic was indeed one of rampant power-related corruption rooted in the increasingly strong ties between the governing party and businesses. Although the Rhee administration swore to fight corruption at its outset, “anti-corruption” never really moved from rhetoric to action. The administration was more concerned with making President Rhee’s rule permanent, amassing power and wealth in less than commendable ways in the process. Thus anti-corruption efforts were mainly conducted in an ex-post-facto manner—with audits and inspections launched into incidents of corruption that had already occurred—and corruption treated in the same light as other criminal offences. Such limited attempts at fighting corruption were made in an arbitrary manner, heavily dictated by the political necessities of the day.

On the contrary, under the Second Republic, which rose to power by promising to end the corruption of the First Republic, governmental anti-corruption efforts became much more serious and rigorous, with numerous new anti-corruption legislation passed supported by an amended constitution. Nevertheless, the new anti-corruption laws and systems of the Second Republic were rather politically motivated, fixated as they were on punishing the chief beneficiaries of the First Republic. Moreover, the new anti-corruption measures lacked a consistent, comprehensive structure, as they comprised mostly of individual statutory provisions, the contents of which were too abstract and vague to carry effective and binding force on implementation sites. The Second Republic, accordingly, failed to achieve the systemic and institutional reform of anti-corruption efforts it hoped for, with its failure to punish wrongdoers and corrupt officials in an uncompromising, strict manner rather spurring the coup d’état of May 16, 1960, which resulted in a military government.

In sum, though the First and Second Republics may have set up organizations specifically authorized to conduct audits and inspections, and though they each passed laws regarding the management of state affairs, they both ultimately failed to achieve systematic and thoroughgoing strategies for eliminating corruption. If anything, they each took unabashedly political approaches to corruption in environments where the factioning of political groups was already clouding the birth of a new democratic republic. As a result, corruption evolved into an integral feature of Korean politics and the government, with cozy relations developing and strengthening between politicians and government officials, on the one hand, and businesses, on the other.
 
[1] The Constitution, enacted on July 17, 1948, also required that a body like the Accounting Office be set up in order to “inspect the revenue and expenditure of the state annually, and report inspection findings and results to the National Assembly in the subsequent year.”
[2] The Inspection Board (August 1948 to February 1955) had its statutory grounds in the NGOA, which required a body under presidential supervision to oversee and inspect the auditing of government employees. The NGOA authorized the Inspection Board to “inspect allegations or facts of illegal or other forms of wrongdoing committed by government employees; discipline government employees found guilty of charges with the consent of the majority of Disciplinary Committee members; and demand the submission of written proof, documents, records, or statements from related organizations where necessary for inspection purposes.” Although the Inspection Board was originally intended to ensure the integrity of public service by conducting fair audits and inspections, it failed to achieve its founding objectives as the political neutrality of government employees became a mere slogan, while favoritism and patronage became integral features of the government. The governing party, accordingly, shut down the Board in the governmental reorganization drive of 1952.
[3] The Audit and Inspection Board came to replace the Inspection Board on March 7, 1955, as an anti-corruption governmental body placed under direct presidential supervision. Like its predecessor, the new Board also sought to investigate wrongdoing by government employees. However, its authority was confined to conducting investigations and reporting findings to the national legislature, and unlike its predecessor lacked the power to subject wrongdoers to disciplinary actions.
[4] See Five Decades of Auditing, published by the Board of Audit and Inspection in 1998.

Source: Korea Institute of Public Administration. 2008. Korean Public Administration, 1948-2008, Edited by Korea Institute of Public Administration. Pajubookcity: Bobmunsa.