On July 3, 2021, prosecutors concluded a high-profile criminal investigation into the premature shutdown of the nation’s second oldest nuclear reactor. Charges of abuse of power have been filed against former Blue House and Energy Ministry officials, including former Minister Baek Woon-gyu and Presidential Secretary Chae Hee-bong.
Let us recap why this particular case is drawing so much attention. In 2017, President Moon Jae-in decided to decommission the Wolsong-1 reactor earlier than planned, in line with his policy of abandoning nuclear power in favor of renewable sources, which experts call ill-conceived. It was formally justified on economic grounds, but soon, it was found out that the decision was grounded in a biased study that underestimated the economic viability of the reactor. As a result, in June 2018, Moon’s cabinet shut down the newly renovated nuclear power plant and suspended construction of the other two, resulting in a huge loss to the national treasury: the state-owned Korea Hydro & Nuclear Power Co. spent 700 billion won ($626 million) on repairs.
The case was taken up by the Bureau of Audit and Inspection (BAI), who demanded to see the documents for analysis, but just before that decision in December 2019, three Department of Commerce, Industry and Energy government officials destroyed 444 files of relevant documents in the middle of the night.
324 of these files were successfully recovered at BAI, and in October 2020 a state audit found that the economic viability of the reactor had been unreasonably underestimated in favor of early closure. The ministry and the state-owned Korea Hydro & Nuclear Power plant (KHNP) deliberately underestimated the income of power units and labor costs. As a result, BAI brought into question the overall credibility of the reactor’s economic calculation process, claiming that one of the leading figures in mishandling the data was Minister Baek Woon-gyu.
On December 2, 2020, the prosecution requested arrest warrants for three officials suspected of removing documents related to the controversial nuclear reactor closure, and on December 4, the Daejeon Central District Court issued arrest warrants for two of them.
On December 23, 2020, the three officials were charged with destroying documents and aiding and abetting a crime and attempting to obstruct an audit.
Meanwhile, rumors appeared that former Minister of Trade, Industry and Energy Baek Woon-gyu and Chae Hee-bong, who was then Blue House Industrial Policy secretary, were among the officials who may be subjected to the investigation. The governing party then went on to condemn the audit of this story as an abuse of power by the BAI and an attempt by the Bureau to meddle in politics. BAI emphasized, however, that the inspection was not intended to decide whether the nuclear phase-out policy was right or not, but whether the officials concerned had complied with procedural requirements.
On January 14, Im Jung-seok, President Moon Jae-in’s former chief of staff, wrote on Facebook that BAI chief Choi Jae-hyun had crossed the line.
But the biggest scandal took place when the TV channel SBS reported on January 29, 2021 that among the deleted documents were a number of files on inter-Korean energy cooperation, including the planned construction of a nuclear power plant in the North. Allegedly, the deleted documents included reports titled “North Korean Nuclear Power Plant Implementation Plan” and “Examination of Inter-Korean Energy Economic Cooperation,” which were prepared from May 2 to 15, 2018, and were kept in a special folder called “Pohjois,” a Finnish word meaning north.
This has already caused much commotion – it turns out that Moon insists on building a nuclear power plant in the North, as opposed to his policy of phasing out nuclear power in the South, and a number of conservative politicians have openly called it “an action that benefits the enemy“. Especially since the document was drafted shortly after the first summit talks on April 27, 2018. The Blue House countered by saying that such invectives are “irresponsible incitement to deceive the people“.
On January 31, Kim Chong-in, the interim leader of the conservatives, demanded a quick and transparent investigation “for their own good“.
On February 1, Reunification Minister Lee In-Young denied media claims that Seoul planned to help Pyongyang build a nuclear power plant after the 2018 inter-Korean summit. In an interview with TBS radio, he noted that the issue concerning the construction of nuclear power plants in North Korea was never discussed and that the ministry conducted an urgent check, but found no information concerning any definite plans to build nuclear power plants in the North.
On the same day, February 1, the Ministry of Industry, Trade and Energy of the Republic of Korea released an internal document concerning the plan to build a nuclear power plant in North Korea. The decision was made due to the need to stop unnecessary discussions. According to a ministry representative, the document touches on just some ideas for possible inter-Korean economic cooperation projects that could have been implemented after the April 2018 summit. The document offers three possible options for the project, but there are no specific plans. The ministry stressed that it was just a “working level idea,” part of a political brainstorming session that took place after the April 2018 summit, adding that the idea was rejected without further consideration and was not shared with outside parties.
The content of the document, though, was rather interesting. In it, three options were analyzed: building a nuclear power plant in North Korea, building it in the demilitarized zone, or building nuclear reactors in South Korea and then transferring their power to the North.
Conservatives were not satisfied with the explanation, and the opposition recalled that during the summit Moon allegedly handed Kim some flash drive: was it not the plan? Then, if the document was purely for internal use, why is it so detailed and why does it specifically say that it is an “unofficial position”? “It’s hard to imagine officials making such a plan on their own initiative, without instructions from above.” Therefore, a parliamentary inquiry was demanded.
In response, Senior Presidential Secretary for Political Affairs Choi Jae-sung said that the contents of the flash drive that President Moon Jae-in gave to North Korean leader Kim Jong-un during their April 27, 2018 summit should never be disclosed. By accusing the opposition party of “black propaganda,” he actually threatened to silence his critics.
Meanwhile, on February 4, investigators requested an arrest warrant for Baek Woon-gyu on charges of abuse of power and involvement in the removal of documents related to the reactor shutdown.
In parallel, the BAI was working on a response to the broader question of the illegality of Moon’s energy policy, with its head, Choi Jae-hyun, repeating that government officials must follow legal procedures even when fulfilling presidential campaign promises.
On March 5, the Bureau said it found no irregularities in the steps involved in the development of the Moon Jae-in government’s nuclear-free policy. This is a vital point, demonstrating the unbiased stance of the BAI: a political investigation would have found something to complain about.
On June 30, 2021, former Commerce, Industry, and Energy Minister Baek Woon-gyu and former Presidential Secretary for Industrial Policy Choi Hee-bong were finally charged with abuse of power and interference in business in the government’s decision to close the reactor.
Baek is suspected of colluding with the president’s then-secretary in the process, while Choi is accused of pushing KHNP to shut down the reactor despite the company’s opposition. The former minister is also suspected of involvement in the removal of documents related to the reactor closure by three subordinates of the ministry. The head of the company, Jeong Jae-hoon, was also charged with neglect of duty and interference in business.
If the “reasonable rumors” that Moon was so fond of in his fight against Park Geun-hye are to be believed, then it seems that one fine day the president had vociferously asked one of his associates when will the reactor finally be shut down. Having learned about it, the minister grasped the “party line” and when his subordinate brought him the feasibility study, according to which the reactor can operate for at least two more years, he reacted with the phrase: “you want to die”? Officials then had to manipulate the numbers of the feasibility study to shut it down immediately. According to the investigation, the decision caused 148.1 billion won ($131 million) in damage to the company.
So, the attempt of the authorities to ruin the case has unequivocally failed, and the recent departure into politics of the head of the BAI only adds more urgency to the issue. There remains the question of the weight of the compromising evidence related to the DPRK’s energy assistance plans.
According to the author, it appears that no one was ever intending to spend billions of South Korean taxpayers’ money to build a nuclear power plant in North Korea, even if it was a light water reactor, which cannot be used to create nuclear weapons. The issue was about the concept and the never approved plans. Alternatively, the nuclear power plant might not necessarily have to be built, but to begin sending money there under the pretext of its construction in trust that the North regime will avoid “engaging in provocations” is certainly an option worthy of consideration. In fact, some different attempts to boost North Korean energy in exchange for “good behavior” have occurred from time to time, but we’ll touch on them some other day.
But, if we consider the “scandal with the Finnish titled folder” from the point of view of the logic of political struggle, we can remember how Moon used a similar story to defeat the military structures and military intelligence. At issue are the state of emergency plans that were envisaged in case the Korean Constitutional Court would not have upheld Park Geun-hye’s impeachment decision but rejected it. It was reasonable to imagine that the masses would have continued to linger in the streets and the authorities had to devise plans for this eventuality. Nevertheless, Moon made it a “case of military conspiracy” without regard to the fact that they had to be carried out within the law. And the author wouldn’t be surprised if, in the face of the upcoming election, conservative forces were to try and play this card, accusing Moon of directly pandering to the enemy and violating the National Security Act.
Konstantin Asmolov, PhD in History, leading research fellow at the Center for Korean Studies of the Institute of the Far East at the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.