Probe finds more Moon-era corruption involving renewables

The government on Monday accused the previous administration of mismanaging an additional 582.4 billion won ($442.2 million) in taxpayer money for renewable energy projects like installing solar panels.

Park Ku-yeon, first deputy chief of the Prime Minister's Secretariat’s Office for Government Policy Coordination, speaks on a government probe into renewable energy projects during a press briefing at the government complex in central Seoul on Monday. [YONHAP]

The government on Monday accused the previous administration of mismanaging an additional 582.4 billion won ($442.2 million) in taxpayer money for renewable energy projects like installing solar panels.

The Office for Government Policy Coordination said a widened nationwide investigation, expanded from a limited probe last year, identified an additional 5,359 cases of irregularities involving government energy funds from between 2019 and 2021, during the preceding Moon Jae-in administration.

Investigators found illegalities in 3,010 renewable energy projects that received financial aid, including 489.9 billion won in government-backed loans from 2019 to 2021, according to Park Ku-yeon, first deputy chief of the office, in a press briefing at the government complex in central Seoul.

The Office for Government Policy Coordination operates under the Prime Minister's Secretariat.

Irregularities included excessive loans that inflated the cost of installing solar power facilities through fake tax invoices or falsified documents.

Some entities applied for loans with falsified documents by pretending to be agricultural or livestock production facilities, such as mushroom or insect breeding farms, in violation of the Farmland Act.

This marked the second round of investigations into alleged corruption regarding subsidies for solar power and renewable energy projects, a key initiative of the Moon government.

This followed an initial probe by the office with the Ministry of Trade, Industry and Energy last September, which found that at least 261.6 billion won was misused for solar power and other renewable energy projects backed by the electric power industry infrastructure fund in the Moon government.

That probe unearthed 2,267 cases of illegalities or mismanagement by 12 local governments over five years.

The Moon government's solar power and renewable energy initiative received some 12 trillion won from the infrastructure fund since 2018.

The electric power industry infrastructure fund gets 3.7 percent of all electricity bills paid in Korea.

Both investigations found a total of 7,626 irregularities during the five-years of the previous administration, resulting in 844 billion won in government subsidies being misused or mismanaged.

The probes looked into 6 trillion won in projects.

On Monday, the Office for Government Policy Coordination and the Industry Ministry said their joint investigation of 25 local governments that received large subsidies from 2017 to 2021 found 1,791 cases of irregularities in projects related to power plants, resulting in 57.4 billion won being misused.

The probe found 172 cases in which a total of 26.6 billion won was illegally used between 2018 and 2022 as a result of mismanagement of research and development projects, including budget waste, double billing, nonpayment of project costs and neglect of equipment.

The office said it has sought to redeem 40.4 billion won and requested investigations into 626 cases. It also asked that government officials allegedly involved in 85 cases face censure.

In consultation with financial authorities, the government will take measures to recover unfair loans. It will also ask relevant ministries to submit improvement measures and strengthen project managment.

Park stressed that the investigation was in line with President Yoon Suk Yeol's order to investigate the Moon administration's decision making regarding solar power projects.

"The expansion of new and renewable energy projects is inevitable in the government's response to climate change, and solar power is a key business type," Park said in the briefing.

He stressed that the latest probe was "not about the necessity of the projects but on how efficiently the necessary projects were managed and whether there are any improvements needed."

The Government Policy Coordination Office said in a statement that it will "promote strong improvements in the system, continuous tracking and follow-up management to eradicate corruption" in energy projects.

BY SARAH KIM [kim.sarah@joongang.co.kr]