Big revolving doors at FTC This is the second in a series of articles regarding problems facing the Fair Trade Commission, often dubbed the prosecutors responsible for the maintenance of law and order in the business sector. ― ED. By Park Si-soo Its a typical case of a revolving door system common in circles of influence — Fair Trade Commission (FTC) officials landing plum jobs at firms they had previously supervised after their retirement. The FTC plays the role of prosecutors with powers to investigate firms business practices and duly hand out large fines when warranted. It is no secret that companies big and small try to curry favor with its officials, making positions with the FTC one of the most coveted jobs among bureaucrats. However, allegations of collusion between the commission and businesses mean the Ministry of Government Administration and Home Affairs (MOGAHA) is now trying to toughen regulations regarding the post-retirement careers for senior public servants. Under the existing rules, during the first two years after retirement, they are banned from working at companies whose core business overlaps with issues they handled during their last five years in office. According to Rep. Yoo Eui-dong of the ruling Saenuri Party, 12 out of 25 director-level FTC officers successfully found a new job at a private company shortly after retirement between 2012 and 2014. Their new employers included SK Telesys, Lotte Confectionery, GS Retail, Hite Jinro and several major law and accounting firms. Many of them were found to have violated the Fair Trade Law. The role retired officials performed was, in most cases, handling issues related to state bodies, including the FTC. It was also confirmed that they had gained approval for reemployment from MOGAHA, which is responsible for implementing anti-corruption measures. The ministry refused to elaborate on the process of issuing approval. Other statistics released by Rep. Kim Sang-min of the ruling party showed a total of 56 FTC directors landed a new job at a private company after retirement between 2009 and 2013. I dont think the ministry is applying the anti-corruption measures strictly, said Kim Jin-won, a secretary for Rep. Yoo who released the statistics. I think they are still able to wield strong influence on the FTC using their extensive network of insiders. Another problem he highlighted was that retired FTC officials knowledge and experience allowed companies to be better prepared for legal battles when they are charged. In 2009, the FTC charged nine domestic liquor companies for price fixing, imposing 25.3 billion won in fines. This was then overturned by the High Court, with the Supreme Court upholding this verdict, stipulating there was nothing wrong with companies sharing information. In another case, the FTC lost outright last year in a high-profile lawsuit raised by 16 insurance companies, including Samsung Life Insurance, Hanwha Life and Kyobo Life Insurance. The regulator claimed that the companies had illegally maximized their profit with insurance policy collusion. The Supreme Court did not recognize this and made a ruling favorable to the companies. Legal experts familiar with the two cases say the FTC appeared to have cracked down on the companies with justifiable reasons, but firms benefited greatly in the courtroom from having veteran employees from the FTC to help prepare their defense. Such cases have led to a big discrepancy between punitive fines imposed on companies by the FTC and the amount modified by the court. The collective fines the FTC imposed in 101 cases involving big companies over five years from 2009 was around 3.59 trillion won. This was slashed by a staggering 45.5 percent by the courts or 1.63 trillion won, according to data from Rep. Lee Sang-jik of the main opposition New Politics Alliance for Democracy. I dont think the FTC is incapable, Lee said. The core problem is that retired FTC officials are doing better than the incumbents. [email protected]
Posted on: Fri, 23 Jan 2015 01:45:54 +0000
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