'Outsider' Reporter's Thoughts on Prosecution Reform, Episode 1 [Lee Hwan-joo's Perspective]

[Financial News] The journalism profession operates under a beat system. Reporters cover assigned news from specific teams within specific departments determined by their companies. For instance, the National Assembly team in the Political Affairs Department covers lawmakers, while the conglomerate team in the Industry Department covers Samsung Electronics Co., Ltd. Occasionally, special reporting teams are formed regardless of department for major events, but this is only temporary. Although alternative media outlets have recently emerged to break away from the beat system, the "barriers of beats" encountered in the field are higher and more solid than expected.
In the case of the Supreme Court of Korea and the Supreme Prosecutors' Office of the Republic of Korea (SPO), which were the reporter's previous beats, there are only about 30 to 35 officially registered reporters. Although non-accredited reporters can receive press releases from the agencies or engage in reporting activities, participation in events such as luncheons with the heads of the agencies or official ceremonies is restricted. To become an officially registered reporter, a reporter from a non-accredited outlet must build a history of reporting activities and article writing regarding the relevant beat, and then obtain a certain percentage of votes in a vote by the existing press corps.In particular, for legal reporters covering the Supreme Court of Korea and the prosecution service, the relationship between reporters and their sources is closer than in other beats.

The beat system benefits both the reporters covering stories and the organizations being covered. In an era when the number of registered reporters was few enough to be counted on two hands, exclusive access to, distribution of, and control over information constituted a form of power in itself. For reporters, the beat system likely served as a primary defense mechanism that prevented the emergence of new competitors and enabled an information monopoly, while for the organizations being covered, it made managing and controlling the press corps easier. As just one example, according to a senior reporter who previously covered the Ministry of Construction, now the Ministry of Land, Infrastructure and Transport (MOLIT), "we would drink with the officials in charge until late the night before, have lunch together the next day, and sometimes delay the publication of that day's embargoed article by one day through the consensus of the press corps." This is just a small example.
Due to factors such as the increase in the number of media outlets and the expanded guarantee of reporting rights, the beat system has become less entrenched than in the past. However, the practice of assigning beats continues within institutions such as Cheong Wa Dae, the National Assembly of the Republic of Korea, government agencies, the legal profession, and the police.
The press accreditation system is not entirely bad. Reporters, too, can acquire the minimum necessary knowledge to write an article within a short period by concentrating their reporting efforts on a specific industry or sector within a limited time.One of the best things about being a reporter is that you can ask questions on behalf of the people.Even if a reporter has just switched beats and is "completely blank" about the field, they can directly ask the person most knowledgeable in that area. This applies not only to public institutions such as government ministries but also to experts in specific fields, even when the reporter has no prior experience.Even if a reporter asks a very odd question, there is an incentive for the person answering to explain the matter to the reporter in as much detail and as simply as possible.Through this process, the source's remarks can be directly quoted and officially conveyed to readers,because if a reporter writes an article poorly, it requires greater effort from the source's perspective to correct or clarify it later.
Within the press accreditation system, as reporters accumulate years of experience and the number of beats they have covered increases, their perspective on events also expands.For example, when covering a socially significant event, one's perspective can vary depending on past experience covering a specific beat. Let us take the "Daejang-dong incident," which once caused a stir, as an example. A real estate reporter would likely write an article focusing on the massive development profits for developers and investors, as well as the presale profits for construction companies, resulting from the Daejang-dong development. A finance reporter, on the other hand, would be highly interested in the economic aspects, such as the non-performing PF loans of Busan Savings Bank—which served as the initial funding source for the incident—and the distribution of profits to the shareholders involved in the project. A reporter who has covered government ministries or local governments would concentrate their investigative efforts on regulations, including environmental and cultural heritage regulations, or preferential treatment and corruption related to permits and licenses during the Daejang-dong development process, as well as connections within the relevant local governments and key figures involved in policy decisions. A legal reporter would examine the role of former judges and prosecutors in eliminating legal risks during the promotion of the Daejang-dong project, the legal issues at the time, and whether the prosecution fabricated the indictment and whether the judiciary's judgment was close to the substantive truth or was a politically tainted ruling as the Daejang-dong incident escalated into the Daejang-dong Gate.The reporter previously diagnosed the essence of the Daejang-dong incident as a shameful aspect of a "Republic of Real Estate" involving corruption among the three branches of government—legislative, judicial, and executive—that constitute our country's power, as well as the media that should be monitoring them.In reality, the Daejang-dong incident escalated into a major scandal involving the massive real estate development profits of Hwacheon Daeyu Asset Management (capital power), former and current National Assembly members (legislative), Seongnam Urban Development Corporation (SDC) (administrative), former judges and prosecutors (judicial), and even former journalists at the center of lobbying and personal connections (media).
One interesting aspect of the Daejang-dong incident was that the prosecution's grounds for indictment and the direction of public criticism focused on "why Lee Jae Myung, who was Seongnam mayor at the time, did not recover more real estate development profits from the private sector." The implication was that he had granted preferential treatment to the private sector. However, this was contrary to the perspective of the existing real estate cartel, as the traditional view in Korea—which had the stigma of being a "Republic of Real Estate"—was based on a common dichotomy that "maximizing private profits through real estate development is 'good,' and public intervention is 'evil.'"
The Daejang-dong development project was initially pursued as a public development but was later converted to a private-sector project, following guidelines from 2009—during the term of former President Lee Myung-bak—which stipulated that profitable areas should be handled by the private sector while the public entity, Korea Land and Housing Corporation (LH), should undertake unprofitable projects. Subsequently, after Lee Jae Myung took office as Seongnam mayor in July 2010, he attempted to proceed with 100% public development through the issuance of local bonds, but Seongnam City Council, where the Grand National Party held a majority, blocked the process. Consequently, Seongnam Urban Development Corporation (SDC) proceeded with the project through a public-private joint development model, securing a 50% plus one share stake. The project gained momentum because having a public entity as a major shareholder allows for the compulsory acquisition of land, which is the most difficult part of a development project.In summary, the Daejang-dong project evolved from an attempted private development during the Lee Myung-bak administration to the pursuit of 100% public development during Lee Jae Myung's tenure as Seongnam mayor, ultimately culminating in a public-private joint development. Unlike other development projects, massive investment profits were possible because the prolonged duration allowed for the acquisition of land and other assets at low prices during a real estate downturn, while sales were carried out during a booming market.At the time, Seongnam-si claimed to have recovered approximately 550 billion won through the Daejang-dong project, including dividends (180 billion won), park construction costs (260 billion won), and infrastructure (110 billion won). President Lee Jae Myung also described it at the time as "the largest public benefit recovery project since the time of Dangun." Conversely, the prosecution maintained that only the 180 billion won in cash dividends constituted public recovery, arguing that the remainder could not be considered public recovery. Nevertheless, it is difficult to find instances in Korea where public benefits exceeding 100 billion won have been recovered from development projects. (To be continued)■ 'Lee Hwan-joo's Perspective' is an online-only feature that explores specific issues in various forms, such as reporter's notebooks and narratives, going beyond the traditional simple article format.[email protected] Lee Hwan-ju Reporter