hankyoreh

The Federation of Korean Industries building in Seoul‘s Yeouido neighborhood

With the Special Prosecutor’s investigation turning up a series of allegations that the Blue House asked the Federation of Korean Industries (FKI) and chaebol to provide financial support to conservative and right-wing organizations on a “whitelist” that it had prepared, records made public on Feb. 5 confirmed that the FKI directly provided more than 2.5 billion won (US$2.19 million) on a total of 61 occasions to 38 conservative and right-wing groups and individuals over three years, from shortly after Park Geun-hye‘s inauguration as president in 2013 through 2015.

These facts are included in the record of transactions between 2013 and 2016, including deposits and withdrawals, from a bank account associated with the FKI’s “social collaboration fund,” which Minjoo Party lawmaker Park Young-sun received from the Financial Supervisory Service (FSS). The social collaboration fund is supported by dues collected from member companies and operated to fund programs designed to benefit society; this fund was also used to support conservative and right-wing organizations. Since the FKI‘s social collaboration transactions are only conducted through its primary bank account, the deposit and withdrawal records can be regarded as conclusive evidence for determining which organizations it funded and how much funding it provided. This is the first time that specific records of the FKI’s funding have been confirmed since the Special Prosecutor launched its investigation into the Blue House‘s whitelist.

Contributions by the four largest chaebol groups to FKI social collaboration fund

The records show that the FKI frequently provided from as little as 2 or 3 million won (US$1,750-2,600) to as much as tens or hundreds of millions of won at a time to conservative and right-wing organizations. The organizations that were funded include all of the organizations the Blue House reportedly requested funding for, namely the National Action Campaign for Freedom and Democracy in Korea, the Korea Parent Federation, the Council of Patriotic Organizations and the Korean Disabled Veteran’s Association by Agent-Orange in Vietnam War. The FKI was reportedly reluctant to act on the Blue House’s request to fund the Korea Freedom Federation, the Korean Veterans Association and the Korean National Police Veterans Association, since these were funded by the central government or local governments, and it only provided financial assistance to the Korean National Police Veterans Association.

Other organizations that received funding are the Mir and K-Sports Foundations, which triggered the Choi Sun-sil influence-peddling scandal and the outcry over the government’s cozy relationship with the chaebols; conservative organizations such as the Parent‘s Hearts Volunteering Group, the ROK Marine Corps Veterans Association, Zeitgeist and Young’s Liberty Union; and anti-communist groups including the Network for North Korean Democracy and Human Rights, the Youth Forum of North Korea Democratization and Open North Korea.

Categorized by year, more than 600 million won (US$527,000) was paid to 10 organizations (including the Korea Parent Federation, the Korean National Police Veterans Association and the ROK Marine Corps Veterans Association), with one payment going to each organization, in 2013. The amount of financial support increased each year, with more than 820 million won paid to 27 organizations on 36 occasions in 2014 and more than 1.08 billion won paid to 14 organizations on 15 occasions in 2015. But these payments were suddenly cut off in 2016, apparently as a result of the scandal that broke early that year about illegal funding for the Korea Parent Federation.

By organization, the largest amount of funding (806 million won) went to the Center for Free Enterprise, an organization affiliated with the KFI that has taken the lead in opposing economic democratization, followed by the Korea Parent Federation (215 million won), the K-Sports Foundation (200 million won), the National Action Campaign (165 million won), a group of conservative-leaning intellectuals called the Korea Forum for Progress (160 million won), the Mir Foundation (139 million won) and a conservative online media company called Byte (145 million won).

The funding for the Korea Parent Federation was made via a borrowed-name bank account registered to the Bethel Gospel Missionary Welfare Foundation. The Korea Parent Federation received the largest number of payments (seven), while the National Action Campaign and Byte each received four payments and a conservative media outlet called Media Watch received three payments. Media organizations that received funding included Byte (145 million won), conservative newspaper the Korea Economic Daily (60 million won), Media Watch (50 million won), an internet media company called All in Korea (35 million won) and Economy Talk (5 million won).

A large number of the organizations that received funding from the FKI are opposed to the impeachment of President Park Geun-hye and are leading the right-wing assemblies protesting the candlelight rallies. Considering that these organizations had previously been active participants in assemblies opposing economic democratization and supporting the state authorship of Korean history textbooks and the dissolution of the Unified Progressive Party, the Blue House will be hard-pressed to deny accusations that it basically used FKI funding to orchestrate pro-government demonstrations. Furthermore, the FKI‘s funding of conservative and right-wing organizations runs completely contrary to the purpose of its social collaboration fund.

“Until 2012, the FKI only supported purely charitable volunteer groups and cultural, artistic and academic organizations. But after Park Geun-hye became president in 2013 and Lee Seung-cheol became vice chairman of the FKI, we began providing a funding to a wide variety of conservative and far-right organizations. During a meeting of senior managers, Lee said that funding conservative groups was a very good thing to do and even told us to work harder to come up with more [groups to support],” said one senior official at the FKI.

Considering that the number of conservative and far-right groups funded by the FKI far exceeded the 15 for which the Blue House reportedly requested funding in Jan. 2014 and that this funding started back in 2013, it’s very likely that the whitelist was composed during the first year of Park’s time in office and that requests for funding were made not once but on several occasions. And since the FKI’s total amount of funding over the three years does not add up to the 3 billion won that the Blue House reportedly requested in Jan. 2014 and the 7 billion won that was reportedly requested through the FKI and the group of the four largest chaebols, it’s also possible that the chaebols provided funding directly without going through the FKI.

While the FKI admitted that it had “funded conservative and right-wing organizations at the request of the Blue House,” it said it “could not confirm the specific organizations funded or the amount of the funding.” The FKI also refused to explain why it had supported media organizations such as Korea Economic Daily and Media Watch. The explanation provided by Media Watch was that it had “received a magazine subscription fee from the FKI.” But the yearly subscription fee to Media Watch is just 50,000 won (US$44).

By Kwack Jung-soo, business correspondent and Lee Jeong-hun, staff reporter

Please direct questions or comments to [english@hani.co.kr]