There is something called “Special business expenses” which are used by the government. This money is usually provided to government officials who carry out special tasks such as investigation, inspection, budget plans and research.
Recently, the issue of special business expenses has received spotlight through the Constitutional Court chief justice nominee, Lee Dong-heub’s misappropriation of special business expenses. Lee used this money, which is public money given to him for special tasks, for personal purposes by keeping the money in his personal account and investing it at financial market products. However, he insisted that he just followed traditional practices and special business expense is used as personal money in other institutions as well.
<2012-2013 Budget Plan for Special Business Expense>
(Unit: 1,000,000)
Institution |
2010 |
2011 |
2012 |
2013 |
Variation |
Board of Audit and Inspection |
3,049 |
3,496 |
3,605 |
3,926 |
▲ |
National Policy Agency |
424,704 |
435,989 |
440,042 |
443,381 |
▲ |
Ministry of Employment and Labor |
4,792 |
4,808 |
4,664 |
4,442 |
▼ |
Fair Trade Commission |
438 |
463 |
691 |
1,032 |
▲ |
Korea Customs Service |
9,479 |
9,670 |
10,302 |
10,631 |
▲ |
Ministry of Education, Science and Technology |
153 |
170 |
89 |
63 |
▽ |
National Science & Technology Commission |
0 |
0 |
61 |
62 |
△ |
Ministry of Patriots and Veterans Affairs |
15 |
15 |
15 |
16 |
△ |
National Human Rights Commission of Korea |
215 |
215 |
247 |
248 |
△ |
Prime Minister’s Office |
608 |
581 |
503 |
482 |
▽ |
Anti-Corruption & Civil Rights Commission |
294 |
381 |
393 |
395 |
△ |
Ministry of National Defense |
7,705 |
7,928 |
11,046 |
10,802 |
▼ |
National Tax Service |
46,187 |
49,767 |
50,160 |
47,917 |
▼ |
Ministry of Land, Transport and Maritime Affairs |
224 |
224 |
210 |
250 |
△ |
National Assembly |
11,224 |
12,396 |
17,743 |
17,875 |
▲ |
Financial Services Commission |
106 |
106 |
106 |
108 |
△ |
Korea Metrological Administration |
17 |
17 |
18 |
19 |
△ |
Ministry of Strategy and Finance |
858 |
858 |
1,009 |
1,030 |
△ |
Ministry for Food, Agriculture, Forestry and Fisheries |
1,794 |
1,775 |
1,601 |
1,650 |
△ |
Rural Development Administration |
20 |
28 |
30 |
34 |
△ |
Supreme Court of Korea |
17,456 |
17,657 |
18,063 |
18,170 |
▲ |
Office of the President |
5,539 |
5,494 |
5,814 |
5,730 |
▽ |
Cultural Heritage Administration of Korea |
22 |
22 |
22 |
22 |
ㅡ |
Ministry of Culture, Sports and Tourism |
54 |
55 |
80 |
82 |
△ |
The National Unification Advisory Council |
117 |
117 |
119 |
120 |
△ |
Korea Communications Commission |
212 |
212 |
257 |
258 |
△ |
Defense Acquisition Program Administration |
94 |
94 |
96 |
90 |
▽ |
Ministry of Justice |
30,387 |
34,096 |
37,118 |
40,137 |
▲ |
Ministry of Government Legislation |
9 |
9 |
9 |
10 |
△ |
Military Manpower Administration |
19 |
19 |
39 |
67 |
△ |
Ministry of Health & Welfare |
256 |
42 |
42 |
44 |
△ |
Korea Forest Service |
332 |
350 |
352 |
340 |
▽ |
National Emergency Management Agency |
547 |
560 |
578 |
591 |
△ |
Korea Food & Drug Administration |
245 |
270 |
278 |
283 |
△ |
Ministry of Gender Equality & Family |
45 |
224 |
223 |
224 |
△ |
Ministry of Foreign Affairs and Trade |
14 |
14 |
14 |
15 |
△ |
Nuclear Safety and Security Commission |
0 |
0 |
11 |
33 |
△ |
Public Procurement Service |
1,001 |
1,028 |
1,071 |
1,085 |
△ |
Small & Medium Business Administration |
19 |
19 |
21 |
22 |
△ |
National Election Commission |
857 |
1,315 |
1,325 |
1,385 |
△ |
Ministry of Knowledge and Economy |
156 |
162 |
162 |
162 |
ㅡ |
Truth and Reconciliation Commission |
277 |
0 |
0 |
0 |
ㅡ |
Statistics Korea |
3,120 |
3,120 |
3,098 |
3,049 |
▽ |
Ministry of Unification |
30 |
59 |
44 |
57 |
△ |
Office of Mister for Special Affairs |
342 |
342 |
342 |
313 |
▽ |
Korea Intellectual Property Office |
82 |
84 |
85 |
99 |
△ |
Korea Coast Guard |
29,045 |
32,123 |
33,372 |
33,613 |
▲ |
Ministry of Public Administration and Security |
743 |
855 |
914 |
848 |
▽ |
Multifunctional Administrative City Construction Agency |
10 |
10 |
14 |
12 |
▽ |
Constitutional Court of Korea |
1,040 |
1,040 |
1,065 |
1,082 |
△ |
Ministry of Environment |
140 |
133 |
144 |
139 |
▽ |
△ : Increased less than 100 million / ▲ : Increased more than 100 million
▽ : Decreased less than 100 million / ▼ : Decreased more than 100 million
In order to understand the current state of special business expenses, the Center for Freedom of Information (CFOI) requested information disclosure to the Ministry of Strategy and Finance with regard to each institution’s budget plan of special business expenses between 2010 and 2013.
The total budget allocated for special business expenses in 2013 is 652.445 billion won. Sixty-eight percent of the total budget, which is equivalent to 443.381 billion won, is allocated to the National Police Agency followed by the National Tax Service, Ministry of Justice and Korea Coast Guard.
Among 51 institutions that receive the money for special tasks, it is 35 institutions that increased their budget compared to 2012. More than 100 million won was increased on the budget plans of eight institutions including the National Police Agency (△3.3 billion), Ministry of Justice (△3 billion), Korea Coast guard (△240 million), National Assembly (△130 million), Korea Customs Service (△320 million) and Fair Trade Commission (△340 million). Remaining 27 institutions also increased the budget ranging from a low of 1 million to a high of 60 million.
There are only 16 institutions that the budget is same or reduced. The National Tax Service showed the most dramatic decrease in its budget (▽ 2.24 billion) followed by the Ministry of National Defense (▽240 million) and the Ministry of Employment and Labor (▽220 million). Other than this, the Office of the President, Statistics Korea, Ministry of Public Administration and Security, Prime Minister’s Office, Korea Forest Service, Office of Minister for Special Affairs, Ministry of Environment, Defence Acquisition Program Administration, Ministry of Education, Science and Technology and Multifunctional Administrative City Construction Agency decreased their budget for special business expenses ranging from a low of 2 million to a high of 84 million won. The Ministry of Knowledge and Economy and Cultural Heritage Administration of Korea kept their budget same.
<Source: EBS>
After the incident of Lee Dong-heub, the Ministry of Strategy and Finance banned prepaying special business expenses and notified each institution that special business expenses more than 300,000 won a month should be paid with credit card keeping records the reason and amount of the payment. However, potential of the misappropriation of special business expenses still remains as there is no need to keep records for the cases under 300,000 won.
A reform such as keeping receipts and records for every payment made is necessary to prevent this. Otherwise, special business expenses can always turn into a blinded tax.