The president of a nonprofit organization that received a subsidy from the South Korean government to “support the registration of records related to the damage caused by Japanese comfort women in the Memory of the World (Memory of the World) by the United Nations Educational, Scientific, and Cultural Organization (UNESCO)” has been found to have received an unfair payment for his trip to the United States, where he met his son and daughter-in-law. There was also a civic organization that was caught using a community recovery subsidy to support the victims of the sinking of the cargo ship “Sewol” without permission. On April 17, the Audit Office conducted an intensive audit of the current state of execution of government subsidies from 2017 to 2021 during the Moon Jae-in administration and issued a report on the audit of the actual state of support for nonprofit private organizations, including such cases. The Audit Office requested police investigations on suspicion of embezzlement, fraud, and violation of the Subsidy Law four times since March this year for cases that require prompt investigation. The investigation requests were made to 73 persons from 10 private organizations. The Audit Office ordered the Ministry of Culture, Sports and Tourism (equivalent to the Ministry), the Ministry of Women and Family Affairs, and other relevant ministries and agencies to correct the situation by canceling or returning subsidies, and notified them to prepare improvement plans. The Ministry of Women and Family Affairs selected two private organizations, one in the form of an incorporated association and the other in the form of an incorporated foundation, as subsidy providers to support the registration of “Voices of Comfort Women” in UNESCO’s Memory of the World, and awarded them a subsidy of 400 million won for four years from 2018 to 2021, according to the Audit Office. The government subsidized 400 million won (about 44 million yen at the current exchange rate) for four years from 2018 to 2021. Mr. A, the president of the foundation, assumed overall responsibility for the project in 2018 and signed a contract to work three times a week on a daily basis to receive labor costs. However, Mr. A received wages of 6658,524 won (approximately 740,000 yen) even though he did not actually work for 74 days out of 100 total working days. Mr. A was not in Korea for 24 days from June 18 to July 11, 2018, to see his son and daughter-in-law who were studying in the United States. However, he pretended as if he had been working while abroad and received his salary. From July 16 to 18 of the same year, he was in Taiwan, and from September 27 to October 19, he was in Switzerland, but received his salary. After that, Mr. A continued to work on UNESCO “Memory of the World” registration-related auxiliary projects for three years from 2019 to 2021; although he did not work full-time in 2021, he received 10.8 million won (about $1.2 million) in personnel expenses over a nine-month period, which he used as living expenses. In May of this year, the Audit Office requested the police to investigate Mr. A for fraud and violation of the Subsidy Law. In Ansan City, Gyeonggi-do, three civic groups were found to have embezzled subsidies related to the “Community Recovery Program” under the “Sewol Damage Assistance Act. One civic group used approximately 4 million won (approximately 400,000 yen) of the community restoration subsidy for purposes unrelated to the purpose for which it received the subsidy, such as public relations expenses and rental fees. Two other organizations were also found to have inappropriately spent subsidies on lecturer fees and the production of video lecture materials. At another organization that subsidizes culture-related projects, the general manager was found to have embezzled 1.057 billion won (approximately 117 million yen) of the subsidies in conspiracy with the accounting staff. The embezzled money was used to finance his children’s business, purchase a horse for his granddaughter, and support her study abroad expenses. There were also cases of embezzlement of subsidies by signing false contracts with family-owned companies or by pretending to have newly developed products that were already on the market. According to the Audit Office, the amount of government subsidies supported by the Korean government in 2021 will reach 97.9 trillion won (approximately 10.84 trillion yen). This is 38.3 trillion won ($424 million) more than in 2017. President Yun Suk-yeol said at the State Council (cabinet meeting) in June this year, “Those who receive subsidies, which are the people’s taxes, have an obligation to always provide honest and accurate evidence (data) as to where and how they spent this subsidy.” Reporter Duk-ho Son
