KCIJ Newstapa - Korea Center for Investigative Journalism

[Opening the Prosecutors’ Safe⑥] Prosecutor General’s Special Activity Expense Managed in Two Accounting Books

The Korea Center for Investigative Journalism(KCIJ)-Newstapa has been conducting the Prosecutors’ Office Budget Watch Project with three civic groups: Catch the Tax Thieves, The Center for Freedom of Information and Transparent Society, and Citizens’ Action Network.

This is our second collaboration to oversee the budgets and actual expenses of the institutional power, following Tax Thieves at the National Assembly Project of 2020, which tracked down more than 80 lawmakers who misused taxes and made them restitute more than KRW 200 million.

After a legal battle for 3 years and 5 months, the joint investigation team obtained 16,735 pages of expense records of several expense categories, such as including special activity expenses, from prosecutors’ offices nationwide. It’s the very first time that a media or civic group acquired the records via freedom of information request.

This project aims to identify tax misuses as with institutions of power. The true nature of prosecutors’ budget, which had been hidden for decades, will soon be revealed.

The investigation will continue in coming months as more expense records are to come in. – Editor’s note

It has been confirmed that there is a so-called “Prosecutor General’s share of special activity expenses,” which can be withdrawn in cash whenever the Prosecutor General wants and that the Prosecutor General Lee One-seok’s share of special activity expenses accounts for about half of the prosecution’s total special activity expenses.

Newstapa’s investigation on the matter revealed that the Prosecutor General’s share of special activity expenses was managed in a specific bank account and spent up to KRW 150 million at a time. More specifically, the prosecution managed the Prosecutor General’s share of special activity expenses by creating a “double ledger.” Apart from the ledger that oversees the entire special activity expenses for the Prosecutor General, Newstapa was the first to find another ledger prepared and managed by the Prosecutor General’s Secretariat

KRW 150 million of taxpayers’ money spent leaving evidence written on a piece of A4 paper

On Dec 19, 2017, KRW 150 million of special activity expenses for the prosecution was paid to someone in cash. The only evidence is a receipt written on a piece of A4 paper. The recipient is unknown because the prosecution masked the information.

▲ A receipt that is evidence of expenditure for the prosecution’s special activity expenses. The receipt dated Dec 19, 2017, states that KRW 150 million of special activity expenses was paid to someone.

Newstapa analyzed 6,805 pages of evidence of expenditure for the special activity expenses received from the prosecution to examine the execution system of the special activity expenses.

First, the materials on the prosecution’s special activity expenses were classified by month. The evidence of expenditure in the monthly materials can be classified into four sets: A, B, C, and D. Set A contains information on the special activity expenses “paid regularly” to District Prosecutors’ Offices throughout the country, and Set B contains information on the special activity expenses that was also regularly distributed to about 15 people.

▲ Newstapa’s analysis of the materials of the prosecution’s special activity expenses revealed that the evidence of expenditure for the special activity expenses was classified into four sets: A, B, C, and D

The aforementioned evidence of expenditure for KRW 150 million of special activity expenses is included in the fourth set, which is Set D. Compared to other sets of material, the amount of special activity expenses spent at a time was quite large in this set. There were countless high expenditures such as KRW 50 million, 80 million, etc., and there were also many expenditures amounting to hundreds of millions of won.

The cover of Set D reads “Execution Details of Special Activity Expenses”. The execution authority of the expenses is written on the left, and it is the Prosecutor General. On the bottom of the cover is the signature written by the Prosecutor General himself.

▲ The ledger of “the Prosecutor General’s share of special activity expenses” was discovered by Newstapa for the first time.

Based on this, Newstapa confirmed for the first time that there is a so-called “Prosecutor General’s share of special activity expenses,” which the Prosecutor General has full authority to spend at will and that the prosecution keeps a separate ledger to manage it.

Half of the prosecution’s total special activity expenses is the Prosecutor General’s share

From May 2017 to Sep 2019, the special activity expenses spent by the prosecution was KRW 29.2 billion of which about KRW 15.6 billion was paid regularly to High Prosecutors’ Offices, District Prosecutors’ Offices, and branch offices throughout the country, and about 15 people every month.

The remaining KRW 13.6 billion was allocated as the Prosecutor General’s share of special activity expenses, which the Prosecutor General had full control over. The Prosecutor General’s share of special activity expenses is literally the money that the Prosecutor General can spend in cash whenever he wants.

▲ The so-called “Prosecutor General’s share of special activity expenses” that the Prosecutor General can spend will account for nearly half of the prosecution’s total special activity expenses.

Now, let us look at how the special activity expenses for the Prosecutor General were executed monthly based on the materials for the special activity expenses from Sep 2019 when President Yoon Suk Yeol was the Prosecutor General.

The total amount of special activity expenses executed by the prosecution in Sep 2019 was KRW 800 million. At the beginning of the month, 48.4% of the expenses, which is about KRW 390 million, was sent to District Prosecutors’ Offices nationwide. This was the regular payment that was described above. The remaining KRW 410 million was the Prosecutor General’s share of special activity expenses, which Prosecutor General Yoon Suk Yeol had full control over.

▲ An analysis of the materials for the special activity expenses for the prosecution in Sep 2019, when President Yoon Suk Yeol was the Prosecutor General, revealed that 51.6% of the total special activity expenses was allocated as the Prosecutor General’s share of special activity expenses.

The prosecution manages the Prosecutor General’s share of special activity expenses through a separate bank account

Newstapa continued to investigate the Prosecutor General’s share of special activity expenses. In the process, we were able to find some surprising facts that had been hidden and concealed all this while.

▲ Wage request letter written by the Supreme Prosecutors’ Office

It was a document called “wage request letter” among 6,805 pages of materials for the prosecution’s special activity expenses that led us to investigate the Prosecutor General’s share of special activity expenses.

According to the wage request letter written by the Supreme Prosecutors’ Office in Aug 2019 when Yoon Suk Yeol was the Prosecutor General, the Supreme Prosecutors’ Office transferred the Prosecutor General’s share of special activity expenses, KRW 410 million, which had been deposited in Shinhan Bank account to another bank account on Aug 28, 2019.

▲ Wage request letter written by the Supreme Prosecutors’ Office in Aug 2019, when Yoon Suk Yeol was the Prosecutor General

Such flow of funds was also captured in the wage request letters of others, including the former Prosecutor General Moon Moo-il. This means the prosecution transfers the Prosecutor General’s share of special activity expenses to a specific bank account every month to manage it separately.

In other words, the Prosecutor General’s share of special activity expenses was kept in this bank account for the Prosecutor General to take the money out of the account whenever he wanted to spend it. It is a very bizarre budget execution system where the head of the agency keeps a separate account to spend national taxes, which cannot be found in any ordinary government agencies.

The Prosecutor General’s special activity expenses and two different ledgers

There is another thing that you need to pay attention to regarding the execution of the Prosecutor General’s share of special activity expenses. Two ledgers or double ledgers have been found in relation to the Prosecutor General’s share of special activity expenses.

The name of the first ledger found by Newstapa is the Record of Expenditure Details. It is one of the materials corresponding to Set C among the four (A, B, C, and D) sets of special activity expenses related materials classified arbitrarily by Newstapa. The Record of Expenditure Details appears to be a ledger that oversees the entire amount in the bank account for the Prosecutor General’s shares of special activity expenses.

▲ Record of Expenditure Details, the first ledger prepared by the prosecution to manage the Prosecutor General’s share of special activity expenses

However, in addition to the Record of Expenditure Details, which is the first ledger, another ledger was found, which is titled Execution Details of Prosecutor General’s Special Activity Expenses. It was none other than the Prosecutor General’s Secretariat that prepared and managed this ledger.

▲ Execution Details of Prosecutor General’s Special Activity Expenses, the second ledger prepared by the prosecution to manage the Prosecutor General’s share of special activity expenses

It was revealed for the first time that the Prosecutor General’s Secretariat, not departments such as the executive office of the Supreme Prosecutors’ Office, manages some of the Prosecutor General’s share of special activity expenses in a separate manner. As mentioned earlier, this ledger corresponds to Set C among the four types of expenditure evidence arbitrarily classified by Newstapa. This ledger seems to be of a more private nature than the first ledger.

Secret safe at the Supreme Prosecutors’ Office that keeps the Prosecutor General’s special activity expenses in cash

So, why does the prosecution manage the Prosecutor General’s share of special activity expenses in double ledger?

There is a possibility that they keep the Prosecutor General’s share of special activity expenses, which has been withdrawn in cash, in a secret safe. Newstapa identified several public records including a ruling related to the special activity expenses for the prosecution in the course of our investigation. In the meantime, we found a clue to the secret safe in the administrative litigation ruling related to the “money envelop dinner" case of Lee Young-ryeol, the former chief of Seoul Central District Prosecutors’ Office.

The plaintiff (Lee Young-ryeol, the former chief of Seoul Central District Prosecutors’ Office) ordered A who works in the secretariat of the chief prosecutor to make him two “encouragement” envelopes containing KRW 1 million each, and A took out KRW 2 million in cash from the “special activity expenses safe in the secretariat of the chief prosecutor” and prepared two envelopes.
From the ruling of Seoul Administrative Court (2017Goohap78919)

A part of the ruling describes in detail the execution structure of the special activity expenses, in which cash is kept in the “double safe” in the secretariat of the chief of the Seoul Central District Prosecutors’ Office for Lee Young-ryeol, the former chief of Seoul Central District Prosecutors’ Office to take out money whenever he wants. If there was a safe that kept the special activity expenses in the office of the chief of the Seoul Central District Prosecutors’ Office, what would the Prosecutor General’s office be like?

The Finance Division of the Seoul Central District Prosecutors’ Office withdraws KRW 18 million in cash and gives it to me, and the money is managed in a “double safe in the secretariat of the chief prosecutor.
From the ruling of Seoul Administrative Court (2017Goohap78919)

In contact with former and current prosecutors, Newstapa was also told that there is a secret safe that stores the Prosecutor General’s cash in the Operation Support Division of the Supreme Prosecutors’ Office or the Prosecutor General’s Secretariat. Although it cannot be concluded, it is highly likely that there is a secret safe in the Prosecutor General’s Secretariat, just like the secretariat of the chief of the Seoul Central District Prosecutors’ Office

Anatomy of the Prosecutor General’s share of special activity expenses

The execution system of the prosecution’s special activity expenses, which has been confirmed by Newstapa so far, is summarized as follows:

1. About half of the prosecution’s special activity expenses is allocated as “regular payments” sent to prosecutors’ offices throughout the country.

2. The other half is the Prosecutor General’s share of special activity expenses.

3. The Prosecutor General’s share of special activity expenses is transferred to a specific bank account and managed separately.

4. The Prosecutor General can withdraw money from the account whenever he wants.

5. The bank account for the Prosecutor General’s share of special activity expenses is managed through two different ledgers.

6. One is the Record of Expenditure Details, which oversees the Prosecutor General’s share of special activity expenses, and the other is the Execution Details of Prosecutor General’s Special Activity Expenses, which is separately prepared by the Prosecutor General’s Secretariat. It is presumed to be a ledger related to cash in the Prosecutor General’s secret safe.

In short, the Prosecutor General’s share of special activity expenses is transferred to a specific bank account and managed separately through two different ledgers. The Prosecutor General is the only person with full authority to spend this money at will. There is only one conclusion that these analysis results point to.The prosecution is spending taxpayers’ money in a way that other government agencies cannot imagine.

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