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

December 15, 2018, in Courtroom B219 on the Underground level 2 of Seoul Administrative Court. A sentence was handed down on the revocation of disposition of former chief of Central District Prosecutors’ Office, Lee Young-ryeol, who was expelled a year and eight months ago for having given 2 million won of special activity expenses which are supposed to be used only for confidential investigations, as incentives to prosecutors at the Ministry of Justice in envelopes. 

The result was a victory for former chief prosecutor Lee. The court reversed the dismissal of former chief prosecutor Lee Young-ryeol, stating that the disciplinary action was too excessive. The court’s decision to reinstate chief prosecutor Lee was the last step in the process of clearing the prosecutors who were surrounded by the allegations of misuse of special activity expenses.

Most prosecutors who were involved in money envelope case were given non-indictment decision, and those who were charged were acquitted. The ‘special activity expenses cash envelope wave’ that shook the prosecution organizations fizzled out in May 2017. Chief Prosecutor Lee resigned a day after his reinstatement.

Looking closely into the court’s ruling, it wasn’t necessarily in favor of former chief prosecutor Lee. Regarding Lee’s practice of enveloping special activity expenses, the court stated, ‘it violates the budgetary guideline of the Ministry of Strategy and Finance.’ It was an important decision by the court on the misuse of special activity expenses, but it was not widely publicized. Four years have passed since then.

On April 13, 2023, The Supreme Court’s special 2 nd Division ended another administrative case. In the administrative lawsuit against the prosecutors’ office to revoke the refusal to disclose information filed by Newstapa and three civil organizations including Sedojab, the ruling of ‘discontinuance of trial’ was finalized.

Two months later, on June 23, the substance of prosecutors’ special activity expenses called ‘black budget’ came out from its cabinet for the first time. In accordance with the court’s ruling, the Supreme Prosecutors’ Office and Seoul Central District Prosecutors’ Office disclosed the records of their special activity expenses and business promotion expenses and a part of their specific business expenses from January 2018 to September 2019.

Newstapa and civil organizations analyzed the information the prosecutors’ offices submitted and found that the Supreme Prosecutors’ Office produces and manages three types of records including evidence of special expenses and receipts.

However, when Newstapa looked into the details, we found out that three records related to special activity expenses from January to April 2017 were missing. Two of the tree records from June to August were also missing.

How mush special activity expenses did the Supreme Prosecutors’ Office use during the period when the data was missing? It is estimated to be about 7.4 billion won. This is how we calculated it. 

The total amount of special activity expenses executed by the Supreme Prosecutors’ Office in 2017 was 16 billion won. If we count the special activity expenses executed from May to December 2017, which is recorded, the special activity expenses executed by the Supreme Prosecutors’ Office in 8 months added up to 8.6 billion won. Therefore, the record of 16 billion minus 8.6 billion, or 7.4 billion won of the national taxes evaporated into thin air. There is no way left to verify where the 7.4 billion won of special activity expenses was used.

Given that special activity expenses are strictly a governmental budget, and the records of execution of them must be managed as public records, there are three ways in which a prosecutors’ special activity expenses records can disappear. 1) the prosecutors never made the record in the first place, 2) the records were produced but destroyed, and 3) the records were lost.

The first case is the possibility of the records not having been created at all. According to the enforcement decree of the Management of the National Funds Act, the enforcement decree amended in November 2007, states, ‘When the treasurer performs a disbursement, he or she must complete the disbursement form and submit it in the disbursement book,’ (Article 39) and ‘In relation to the creation of an expense report, the officer must make expenditures in accordance with the expense report and record the results in the expenditure book.’ (Article 44)

Only after this process, the governmental budget is deposited into the national treasury account managed by the Bank of Korea. Prosecutors’ special activity expenses cannot be an exception. Without a disbursement form or expense report, no special activity expense budget can be allocated to the prosecutors’ office. If tax money was spent without these documentations, it would mean that prosecutors could withdraw a large amount of cash from the treasury whenever they wanted to without any process. This is realistically impossible. The next case is record destruction. In this case also, the problem is serious. In April, Newstapa and three civil organizations prepared for the possibility of prosecutors discarding the records of special activity expenses right after the Supreme Court’s decision.  

We immediately filed a request with the Supreme and Seoul Central District Prosecutors’ Offices for the disclosure of records disposal information. 

If special activity expenses were disposed of following the regular procedure, the disposal information must have remained. We checked the disposal information record of the Supreme Prosecutors’ Office from 2017 to 2022 but could not find any trace of them disposing of the record of special activity expenses. In the end, there is only one case left.

There is the possibility of the prosecutors’ losing the record or disposing of the record without any authorization. In case of unauthorized disposal of public records, it is punishable by imprisonment for up to 7 years or a fine of up to 30 million won. Attorney Ha Seung-soo (Sedojab Co-CEO / Newstapa Expert Advisor) stated, “According to the Ministry of Strategy and Finance guidelines, the person who receives cash must leave a receipt or a confirmation of the execution details, even for special activity expenses,” and added “It is shocking that not even a receipt is left.”

The Supreme Prosecutors’ Office cannot explain but just repeats “it does not exist” Newstapa asked the Supreme Prosecutors’ Office why there was no record of special activity expenses from a certain period of time but was only told, “Some old materials have been identified as not existing”. To further question why it does not exist, the Supreme Prosecutors’ Office just repeated, “It does not exist.” Sedojab, The Center for Freedom of Information and Transparent Society, and Citizens’ Action Network called for a thorough investigation, stating “if the prosecutors’ office cannot come up with a satisfactory explanation on the missing records of special activity expenses execution, it should be revealed through a national investigation or special prosecutor.”