[INTERVIEW] A CALL FOR AN INCREASE IN CIVIL SOCIETY’S TRANSPARENCY: KOREAN COUNCIL EMBEZZLEMENT SCANDAL
- Program: CPBC (Catholic Peace Broadcasting Corporation) Radio <Yeollin Sesang Oneul>
- Host: Yoon, Jae-Sun
- Interviewee: You, Han-Beom, Executive Director of Transparency International Korea
Corruption could be prevented if the information on its activities is voluntarily made public
53.2% of citizens responded that a regular external accounting audit is needed
Government aid is a tax; Government must act in case of insufficient accounting
A special treatment on civic organizations is unnecessary
Advanced countries enforce external accounting audits on organizations over a specific annual earning
* Disclaimer: The following transcript may differ from the actual broadcast. For more accurate information, please check out the broadcasted version.
YOON JAE-SUN, HOST: Previously, we discussed a press conference of Yoon Mi-Hyang, a democratic party candidate who was recently elected to represent the National Assembly. In light of the situation where the Korean Council for Justice and Remembrance for the Issues of Military Sexual Slavery by Japan (Korean Council) is currently being accused of false accounts and misappropriating public donations. More and more people are raising questions on the establishment of transparency and openness in the overall administration of civic organizations. Consequently, the activities of civic organizations have been shrunken than ever, in addition to the ongoing COVID-19 crisis.
We will further discuss this issue with Mr. You Han-Beom, Executive Director of Transparency International Korea. Are you here with us, Executive Director You?
YOU HAN-BEOM: Yes, thank you for having me today.
HOST: The scandal of Yoon Mi-Hyang and the Korean council’s public donation embezzlement is currently calling for transparency in the overall civic organizations in our society. To begin with, what are your sentiments on this particular incident?
YOU: I have just watched the press conference, and I must say that I find it to be very much regretful. The Korean council has been receiving an enormous endorsement from Koreans and the international community for their contribution to revealing the truth of Japanese military sexual slavery and regaining the honor of its victims and survivors through demanding compensation for the past 30 years. However, the recent scandal on their false accounts has substantially damaged the public trust in their work.
HOST: Needless to say, criticisms must be raised if the situation calls for one, but we should not denounce the work that the activists have been doing until this day. However, it is also true that transparency in the administration of civic organizations must be ensured under any circumstances. Do you have any idea how we should ensure the transparency of civic organizations in terms of accounting?
YOU: Civic organizations are voluntarily formed groups that work independently for the sake of the public interest. Even if they are not necessarily funded by donations or government support, willingly opening up their information related to the organization could prevent potential corruption in the first place and allow them to live up to their social responsibility.
No matter the size, or the role of countless civic organizations, I believe that the full disclosure of information on their accounting must be taken into account to ensure the organization’s accounting transparency. This is especially necessary when it comes to organizations that are funded by public donations or government funds because it would inevitably involve the intentions of the donors and the tax of the people. Consequently, there must be a process to reveal and find out whether the funds were correctly used for their intended purposes.
HOST: So, what you are arguing is that truthfully opening out to the public is necessary. Some are also suggesting to implement a policy which mandates every civic organization to receive an external accounting audit for every certain period – what do you think of this suggestion?
YOU: I have also read a survey result saying that 53.2% of Koreans think that the mandatory implementation of external accounting audits could serve as a solution to this crisis. That would be the ideal option, of course, but the biggest problem would be the lack of budget. Although there are some big organizations with plenty of budgets, the majority of civic organizations struggle without even the minimum budget. Consequently, it would not be realistically feasible to make every organization receive audits from a professional accounting company since it would cost a great deal.
HOST: According to what you just said, that would be the case of the majority of civic organizations that are of a size below a certain level. Don’t you think that the government should cover this external auditing cost?
YOU: I believe that is hardly a case for the majority of the civic organizations. However, say, if an organization is receiving government aid, using some of it to cover their audit costs could be a solution. As I have mentioned before, a transparent opening should be the underlying policy for every civic organization. Even if they lack a certain degree of professionalism, I believe every one of them must go through an annual auditing process, make their accounting report available online, and open up all their accounting documents anytime if suspicion is raised.
HOST: Due to the growing concern that calls for auditing done by the government itself, the Ministry of the Interior and Safety is currently working towards a collective management system gathering all the information on donations and its use, which would start operating from the upcoming January. Do you think this new system would help ensure the accounting transparency of civic organizations?
YOU: That could be one of the solutions in terms of assuring fundraising transparency. If there is a cost covered by the government, the government would have the right to lead the audit in case of a false report, since that very cost would be from tax.
HOST: Are there any examples from other countries on ensuring accounting transparency of civic organizations that we could take notes from– Germany, for instance?
YOU: I think you might have asked that question because our headquarter of Transparency International is based in Germany. In the case of Transparency International Korea, we already have several experiences with promoting projects which were funded by Transparency International. All branches of Transparency International must fix their external audit cost at 1% out of the total budget for projects of a specific size. After the project completion, an external audit result must be submitted.
HOST: I see that you were already following that kind of system.
YOU: Yes, that is how we have been doing. In the case of small projects, we are submitting every document that could prove our expenditure, including receipts, rather than conducting an external audit since the total budget is rather small. Every local branch of Transparency International must be reapproved by the headquarter every three years, including us as the South Korean branch. If any problems arise in the triennial accounting and business report, the branch approval is automatically canceled.
Furthermore, according to my research, other countries have a far stricter standard on to what extent should public corporates go through an external audit. In the case of the US, organizations with more than 300 million won of annual gross earnings are required to undergo external audits; in the UK, the baseline is set on 750 million won.
HOST: We could say that the regulations of the US are inherently stricter.
YOU: In the case of the US, several civic organizations are serving the role of watchdogs by monitoring the accounting of other civic organizations.
HOST: Letting civic organizations keep an eye on their peers could be a solution. Some are also voicing out that a lack of governmental support on civic organizations is unreasonable, although they are expected to follow an extremely high standard of morality and transparency. This claim is especially relevant in times of COVID-19, where civic organizations are currently excluded from receiving emergency support despite their growing budgetary difficulty since their projects are often reduced or even canceled at this point. What is your opinion on this?
YOU: Civic organizations are voluntarily formed groups based on the sole purpose of public interest and resolution of the multiple problems that might arise in our society; in other words, nobody is forcing them to do anything. I do not personally think that civic organizations should somehow be given special treatment since there are plenty of other marginalized people or businesses in our society. Nonetheless, I agree that broad support is needed in times like these to overcome the grave difficulty that our society is facing today.
HOST: I have heard that the United States or many European countries are implementing a governmental fund on non-profit civic organizations to keep up their employment status – is that true?
YOU: It is. An acquaintance of mine is working for a civic organization in the UK, and they chose to lay off their employees. At the same time, the government guarantees 80% of their original salary, rather than maintaining their employment status. That is how the UK is currently supporting employment in current times of COVID-19, where a lockdown is taking place.
HOST: I see that an unemployment benefit is given as the UK government considers the status quo as temporary unemployment. Apart from the issue of accounting transparency, concerns on the overall administration principles of civic organizations are being raised as well. I understand that these concerns are alluding to the comments of the survivors of sexual slavery, where they blamed the Korean council for taking advantage of them. What do you think of this criticism, in a sense that we should bring a change in how civic organizations administrate?
YOU: This isn’t necessarily related to our projects, but my thoughts are with activists who are directly working with victims and survivors. The press very much highlighted the conflicting opinions between the Korean council and the survivors for this particular case, and I believe that a close discussion between the two parties are far more critical than opinions outside them, not to mention that a publicization could take place if the situation calls for one. Nonetheless, since donations of citizens and governmental funds were put into the project of the Korean council, accounting transparency must be ensured without a doubt. Still, it should be taken differently from the approach to solving the issue of Japanese military sexual slavery.
HOST: I will ask you a rather direct question. There are some cases where activists who once worked for civic organizations became politicians. This has been a topic of an ongoing debate from the early 90s, on whether it is appropriate or not. What is your opinion on this matter?
YOU: My stance is that it is virtually possible. In a nutshell, I see politics as a process where people wishing to bring a change into this society through diverse values are gathered together in the hopes of solving conflicts. As a result, I do not view the political engagement of people who were already delving into critical social issues as necessarily inappropriate or problematic. However, it should be noted that politics and civic organization’s activities are two inherently different sectors, which is why I do not think they are virtually connected.
HOST: To wrap up, I feel like that this incident may have discouraged many activists, volunteers, and supporters who have been ceaselessly working for NGOs with their goodwill. Would you like to give any words of encouragement to these people?
YOU: I am not sure if I am qualified to do so, but I firmly believe in the importance of civic organization’s role in our society because multiple problems are bound to occur, and the government is utterly incapable of handling every single one of them. According to the Transparency International’s Corruption Perception Index (CPI), South Korea has ranked 39th out of 180 countries, a result that has much more improved than before. In countries with higher CPI than ours, civic organizations are already taking up much more prominent positions in their respective societies, not to mention that their works are more active than ours.
As a result, I hope that we could use this scandal of the Korean council as an occasion to raise the civic transparency of our society. I think it also reflects how the social demand on civic organizations has been raised, as well as their social responsibilities. I would like to thank and encourage all the activists and supporters who are striving to this day under hard conditions.
HOST: I see. We were live with You Han-Beom, Executive Director of Transparency International Korea, and discussed the solutions to raise the transparency of civic organizations. Executive Director You, thank you for speaking with us today.
YOU: The pleasure was mine. Thank you.
Translated by: Jaerin Kim