(If the statistics are not corrected) I will ruin the organization and the budget.
It has been confirmed that during the Moon Jae-in administration, the Blue House (BH) and the Ministry of Land, Infrastructure and Transport exerted pressure on the Korea Real Estate Board and Statistics Korea to systematically distort national statistics related to real estate, income, and employment. Officials from BH and the Ministry reportedly made threatening remarks to the statistical personnel at the Korea Real Estate Board and Statistics Korea, stating that if they did not participate in the manipulation, they would ruin the organization and the budget.
The Board of Audit and Inspection announced the results of the audit titled 'The Current Status of Major National Statistics Preparation and Utilization' on the 17th.
According to the Board, BH and the Ministry exerted pressure on the Korea Real Estate Board to manipulate housing statistics a total of 102 times from January 2018 to October 2021. In particular, after receiving advance information on housing price fluctuations, they directed that if the results were unsatisfactory, the fluctuation rates should be lowered.
Specifically, in the fourth week of August 2018, when the housing price in Seoul was reported to be high at 0.67% in a weekday survey, BH pressured the Korea Real Estate Board to lower the fluctuation rate, reflecting the withdrawal of the Yongsan and Yeouido development plans and the effects of the Aug. 27 measures. The headquarters of the Korea Real Estate Board contacted its branches to lower the sample prices, and the final fluctuation rate was lowered to 0.45%.
In the third week of June 2019, when the sales price of dwellings in Seoul shifted to a standstill (0.00%) after a 31-week decline, the Ministry pressured the Korea Real Estate Board to manipulate the statistics to maintain the downward trend. A Director from the Ministry lobbied the Korea Real Estate Board, saying, "I received contact from BH. If this continues, our line will be ruined," and ultimately, the Korea Real Estate Board adjusted the sample prices downward a total of 43 times and announced a fluctuation rate of -0.01%.
A similar incident occurred in the second week of July 2020. Right after the announcement of the July 10 real estate measures, when the fluctuation rate actually came out high at 0.12%, BH strongly reprimanded, saying, "What is the Ministry doing now?" The Ministry demanded that the Korea Real Estate Board lower the fluctuation rate to below 0.09%, and the headquarters of the Korea Real Estate Board directly modified the sample prices 149 times to announce a rate of 0.09%.
BH and the Ministry violated the Statistics Act by receiving the statistics they were preparing in advance. Despite the Korea Real Estate Board's request to stop the continuous requests for advance submissions of statistical data on 12 occasions, these requests were ignored. During this process, when the employees of the Korea Real Estate Board rejected BH's requests, the President of the Board received direct contact demanding a weekday survey from BH and instructed the staff to "cooperate with BH."
From August to October 2020, there were severe distortions in statistics, with the fluctuation rate of sales in Seoul announced as 0.01% consistently over 10 weeks. At that time, private statistics showed significant discrepancies, ranging from 0.22% to 0.43% weekly.
There was also pushback within the Korea Real Estate Board. When BH demanded that the numbers be lowered in August 2018, an employee from the Seoul branch protested, asking, "Does actively reflecting mean we should massage the data?" On July 4, 2019, a Director from the Ministry summoned the head of the Korea Real Estate Board, threatening, "If you don't cooperate properly, I will ruin the organization and the budget."
To conceal the facts of the statistical distortions, the Korea Real Estate Board manipulated data by raising thousands of sample prices to market rates from 2019 to 2020, including retroactively adjusting past sample prices that had already been published. After the introduction of new samples in July 2021, they also manipulated announcements by arbitrarily dividing the increase in fluctuation rates over several weeks to prevent a sharp rise.
Income statistics were also distorted. When household income decreased in the second, third, and fourth quarters of 2017, Statistics Korea manipulated the statistics to make it appear that household income had increased by arbitrarily applying a 'weight for employed persons' that was not included in the sample design. Particularly, when the income quintile ratio indicating worsened income distribution for the first quarter of 2018 was recorded at the worst level since 2003 at 6.01, the government again changed the weighting application method, lowering it to 5.95.
This was a measure to inflate the achievements of the income-led growth policy promoted by the Moon Jae-in administration. As the results of income-led growth fell below expectations, the government artificially improved the statistics to distort the policy's effects.
Employment statistics were also distorted under pressure from the Blue House. In 2019, BH pressured Statistics Korea to announce that the increase in non-regular jobs was due to 'parallel surveys,' and Statistics Korea accepted this without evidence and released the distorted explanation.
Based on the results of this audit, the Board of Audit and Inspection has taken disciplinary actions (14 people) and personnel notifications (17 people) against 31 individuals related to BH, the Ministry, the Korea Real Estate Board, and Statistics Korea. In particular, 22 key personnel were referred to prosecutors last September on charges of abuse of power, obstruction of work, and violations of the Statistics Act. An official from the Board of Audit and Inspection emphasized, "National statistics have been manipulated for political purposes, severely damaging their credibility."
In response to the audit results, an official from Statistics Korea stated, "Statistics Korea has been striving to produce accurate statistics to gain the public's trust, and in the future, we will enhance objectivity and transparency through institutional improvements in the process of preparing and announcing national statistics."