2nd LD) Misplaced subsidies to be retrieved from December

(ATTN: RECASTS lead, headline; UPDATES with parties' meeting, government
investigation; RESTRUCTURES and TRIMS)
By Shin Hae-in
SEOUL, Oct. 22 (Yonhap) -- The snowballing scandal over ranking officials'
alleged snatching of state farming subsidies entered a new phase Wednesday, as
authorities said misplaced funds will be retrieved beginning December and hinted
at disclosure of the names of illegal money takers.
Recent reports revealed at least 500 billion won (US$367 million) in government
subsidies intended to support rice producers went to millions of ineligible
applicants over the past four years, triggering widespread anger among the
nation's farmers.
Amid the social fracas, the government began to probe 1.1 million people who have
received the money since the subsidy system was established in 2005. Among them,
at least 200,000 people are believed to have illegally pocketed the funds,
including some 4,000 public servants.
The case, which first made headlines after the vice health minister was found to
have applied for the money by falsely claiming she farmed rice, has been growing
into an explosive corruption scam involving several high-ranking officials and
legislators. The disgraced vice minister was replaced Tuesday as the fourth
Cabinet member to leave the office since President Lee Myung-bak was inaugurated
late February.
Subsidies that went to ineligible recipients will be recollected beginning Dec.
20, after the first phase of the investigations are complete, the prime
minister's office said in a press release.
Fines of up to twice the amount of the received funds will be slapped on the
illegal recipients, and government officials will be subject to tougher
investigation, the office added.
Facing growing pressure from farmers demanding disclosure of the names of
officials who pilfered their money, the state audit board said it will restore
the formerly discarded files, purportedly holding names of more than 200,000
illegal recipients.
"We discarded the list for the sake of personal protection, but decided to
restore it to ease the social turmoil," Kim Hwang-sik, chairman of Board of Audit
and Inspection, told an unscheduled press meeting Wednesday.
Making the list again would take about two weeks, the chief auditor had said last
week, not answering whether it would be made public immediately.
The rice farming subsidy system was established in 2005 under the Roh
administration to support low-income farmers who protested the opening of the
Korean rice market to cheaper imports. Only those who actually produce rice --
excluding those who simply own rice paddies -- are eligible for the state
subsidies.
Political parties, meanwhile, agreed to open an independent probe from Nov. 10
through Dec. 5. Eighteen legislators will lead the parliamentary investigation
team.
As many here question the efficiency of the ongoing investigations by legal
authorities and the government, parties agreed Monday on the necessity of a
separate probe by the parliament. Prosecutors are currently investigating the
former vice health minister and two ruling party legislators, unable to expand
the scope of investigation without the names of the accused people.
Intense partisan disputes linger along the way, however, as rival parties are
locked in a blame game over which government is more to blame for the growing
scam.
Holding the former Roh Moo-hyun government accountable for failing to address the
errors in the subsidy system earlier, the ruling Grand National Party hinted at
calling the former president as a witness in the scheduled investigation.
"Former President Roh is one of the many that could be called for questioning,"
the party's floor leader Hong Joon-pyo said. "There is a need to get to the
bottom of suspicions that the audit board deliberately discarded audit data under
Roh's orders."
Roh's aides said calling him in as a witness was out of the question.
"(It is) an apparent political move that is not even worth a response," said Kim
Kyung-soo, Roh's secretary.
The main opposition Democratic Party warned its rival against "clouding" the key
issue.
"This is not a matter of which government is to blame," party leader Chung
Sye-kyun said. "Both the former and the incumbent governments should pay the
price."
Many of the ranking officials now under suspicion have worked for both Roh and
Lee administrations, implicating both sides of the political divide.
Observers say officials and legislators who own land likely applied for the
subsidies in order to evade heavy property taxes, as the country's tax law
requires individuals to farm the land for at least eight years to receive tax
deductions. It does not require proof that applicants are the actual farmers.
hayney@yna.co.kr
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