
A large number of retirees from the Korea Land and Housing Corporation (LH) re-employed as private construction companies, and the controversy over the “all respects” arose after being driven by their workers, and LH showed no internal re-employment regulations. It is said that even though retirees form a tight relationship with the incumbent, there is no way to check it even though they wield enormous authority by taking over the state project as a monopoly. Considering that public institutions in the financial sector, such as the Financial Supervisory Service, Korea Investment Corporation, and the National Pension Service Fund Management Headquarters, have imposed restrictions on reemployment for the majority of employees, it is evaluated that LH has virtually neglected the issue of respect for the whole.
According to LH on the 11th, 7 employees, including the president, vice president, auditor, and standing directors (4), are restricted from reemployment. They are subject to employment screening for three years after their retirement date, and employment in private companies is restricted. LH has no internal regulations that prevent re-employment restrictions for other executives and employees except those subject to the Public Officials Ethics Act. As of the end of last year, 9566 employees are working at LH, and except for seven, it is a structure that can exert influence across the industry.
Compared to other public institutions, LH’s restrictions on re-employment were also lax. FSS employees with level 4 or higher are restricted from re-employment at an organization related to the work of the department where they worked for three years after retirement and five years before retirement. About 80% of all employees are restricted from reemployment. The Bank of Korea and Korea Deposit Insurance Corporation are also restricted from re-employment for employees of level 2 or higher, which account for about 15%.
The Korea Investment Corporation and the National Pension Fund Operation Headquarters, which are not otherwise regulated by the law, prevent re-employed executives and employees from exerting excessive influence through their own bylaws. If a retiree gets a job as a private company for work within one year, Korea Investment Corporation restricts new transactions and additional agreements with the employee for six months. The National Pension Fund Management Headquarters also has the same level of control as its bylaws.
On the other hand, LH’s bylaws are evaluated to declaratively block contact with retirees. According to the LH Code of Conduct for employees, it is prohibited to play golf, eat meals, engage in speculative entertainment, and travel with retirees who are job-related. In case of unavoidable contact, they are asked to report to the boss. The code of conduct for executives and employees is evaluated to prove that retirees can exert a wide range of influences on incumbent LH employees.
In particular, considering the fact that the scale of LH’s private contracts has increased significantly in recent years, the influence of LH retirees is estimated to have expanded even more. The contract for architectural design services, which was less than 100 billion won until 2016, has more than tripled to 289.5 billion won in 2019. Last year, more than 200 billion won contracts for architectural design services were signed. This was the period when Minister of Land, Infrastructure and Transport Byun Chang-heum served as LH president. An industry insider said, “LH’s practitioners also tend to act without reluctance to the culture of’sharing with each other’ while watching the government send the president, vice president, and thanks with a parachute, and they take care of bids from familiar personnel. I lost” he said.
The industry is evaluating that Minister Byeon’s construction project management service review conducted by competitive bidding has increased the proportion of LH internal members to create a structure that makes it easy to drive work to the entire government. Until 2018, LH consisted of two internal judges and five external judges, but since December 2019, the number of internal judges has been expanded to three.
An official in the construction industry said, “It is almost impossible to get a vote from LH’s internal judges, which corresponds to 3 out of 7 votes, only after several months of preparation and effort for receiving an order enter into the evaluation.” Companies that couldn’t enlist LH retirees in their thoughts often give up participation,” he said.
Rep. Song Eon-suk said, “It is unfortunate that the number of private contracts increased dramatically while Minister Byeon Chang-heum served as LH president.” He pointed out that there is a need to prepare screening criteria and expand screening targets.”
In the construction industry, the current government has pointed out that the government, emphasizing the function of the public, has lavishly raised the powers of LH and others, and that illegal and expedient acts that used interests in the government and public enterprises are inevitably overwhelmed.
Various unfair contracts made by LH are also being questioned by external organizations such as the Audit Office. In May of last year, the Board of Audit and Inspection was informed of the misconduct of Research Fellow A, affiliated with LH.
It was found that about half of the corruption activities of LH employees recently were caught by external agencies. It is a proof that internal control functions have been lost. In 2019, when Minister Byeon was in office, it surged to 23 cases. Of these, only two cases were filed by LH to an investigative agency.
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