The homepage of the US-Korea Institute at Johns Hopkins SAIS
Though the Liberty Korea Party and the South Korean conservative press claim that the suspension of funding to the US-Korea Institute (USKI) constitutes blackballing by the administration of Moon Jae-in, the controversy is rooted in the fact that the USKI received more than 20 billion won (US$18.9 million) in funding over 12 years without letting the government and the National Assembly know how it was spending that money. Jae H. Ku, who has now been USKI director for 11 years, has reportedly gone beyond “guaranteeing the independence of a research institute” on numerous occasions. He recently appropriated US$80,000 from his budget without making a report about it.
Half of the budget spent on payroll
The Korea Institute for International Economic Policy (KIEP), a think tank funded by the South Korean government, has provided just over 20 billion won in funding to USKI from its establishment at the Johns Hopkins School of Advanced International Studies (SAIS) in 2006 until last year. This year’s proposed budget for USKI – released on Apr. 9 by Lee Hak-young, the ranking lawmaker with the Democratic Party on the National Assembly’s National Policy Committee, who received it from KIEP – amounted to 2.16 billion won (over US$1.91 million dollars).
Half of the total budget was slated to be used for payroll (over US$1.07 million), including US$140,000 for the director and US$79,000 for the deputy director. The programs and projects that are USKI’s primary function only accounted for about one quarter (US$518,940) of the total budget. This included just US$212,800 for 38 North, a website well-known in South Korea that specializes in North Korea’s nuclear weapons and missile trends, and US$174,540 related to Korean Studies and the Korean language.
“The US-Korea Institute says it submitted between 3,000 and 5,000 pages in settlement materials each year, but these were seminar proceedings and columns that bore no direct relation to the statement of accounts. The actual statement of accounts consisted of a single page that listed the total amount spent on each program,” KIEP said. This implies that the USKI only reported the total amount spent on each program without providing any proof of expenditures.
“There is also evidence that Ku abused his authority over the budget,” said Kim Jun-dong, former deputy director of KIEP and currently a senior analyst for the institute. The statement of accounts for 2016 submitted in July 2017 showed that US$80,000 was spent on a joint seminar with the Hoover Institution at Stanford University that did not appear in the original business plan. This was not reported after the fact, not to mention discussed beforehand, and Ku reportedly failed to provide an acceptable response when asked about it.
“They apparently had another joint seminar with the Hoover Institution in July 2017, but we had no idea how much money was spent on the seminar or what kind of seminar it was,” Kim said.
Bipartisan criticism of spy agency-style budget totals
Since the USKI receives more than 2 billion won (US$1.89 million) in funding each year, the National Assembly has continued to bring up the lack of transparency in the USKI’s budget execution since about 2014. During this process, the sparks were kindled by the materials that the USKI sent to the National Assembly in Aug. 2017 for its 2016 budget and settlement. This report was only two pages long and only included the total amounts, with project details lumped together to prevent readers from knowing how the money was used, as the National Intelligence Service does.
“These two pages are a report for 2.1 billion won. It only contains headings for how much was spent on payroll and projects. Even a neighborhood savings circle in the countryside would do better than that,” Rep. Lee Hak-young told a plenary session of the National Assembly’s National Policy Committee.
The next day, a senior expert member of the National Policy Committee asserted that the USKI “lacked adequate control and oversight for its inadequate submission of settlement materials, the perfunctory operation of its board of directors and the long tenure of its director.”
Rep. Kim Sung-won, a lawmaker with the Liberty Korea Party, gave KIEP a tongue-lashing: “I’ve never seen a single page [of settlement materials] turned in for the use of 2.1 billion won. What grounds are we going to have for next year’s budget?”
The email from KIEP’s deputy director that the Liberty Korea Party cites as evidence of the Blue House’s involvement in the suspension of funding was sent on Oct. 30, 2017, two months after both the ruling and opposition parties challenged the lack of transparency in USKI’s budget.
By Kim Nam-il, Song Ho-jin, and Heo Seong, staff reporters