Day 3 of national audit sees ruling and opposition parties clash across 9 committees

Legislation and Judiciary Committee erupts in shouting match over speaking rights

AI hacking of financial sector emerges as flashpoint

'FSC data insufficient' vs. 'call Kim Yong-beom as witness'

FSC Chairman Lee Eok-won delivers a work report at the National Assembly's Political Affairs Committee national audit on Thursday. [Yonhap]
FSC Chairman Lee Eok-won delivers a work report at the National Assembly's Political Affairs Committee national audit on Thursday. [Yonhap]

On the third day of the national audit Thursday, ruling and opposition parties clashed sharply over major policy issues facing the Lee Jae Myung administration in its second year — including a proposed overhaul of the criminal justice system, a recent AI-based hacking attack targeting South Korean financial institutions, and controversy over the introduction of single-stock leveraged ETFs.

The National Assembly launched audits across nine standing committees, including the Legislation and Judiciary Committee, the Finance and Economy Planning Committee, and the Political Affairs Committee.

The Legislation and Judiciary Committee erupted in a shouting match from the outset, as committee chair Seo Young-gyo and People Power Party lawmaker Kwak Gyu-taek traded shouts of "Stop interfering" and "Give me the floor" in a tense standoff over speaking rights.

The Democratic Party highlighted the launch of the new Public Prosecution Service on Friday as the fulfillment of its prosecutorial reform agenda, urging the agency to make proper use of its authority to request supplementary investigations. The People Power Party, by contrast, said the agency had rushed into operation under an acting leadership structure and drew attention to what it called a public safety vacuum left by the abolition of direct investigative powers.

Also drawing fire were allegations that prosecutors had fabricated charges against President Lee Jae Myung, the question of whether to withdraw the indictment in his ongoing trial, and the circumstances behind the withdrawal of Kim Seung-won as a candidate for justice minister.

The Political Affairs Committee's audit heated up from the start after it was revealed for the first time that the suspected mastermind behind hacking attacks targeting South Korean financial institutions may be a 26-year-old individual living in China's Guangdong Province.

Committee chair Yoo Dong-su convened a plenary session before the audit began, and lawmakers from both parties agreed to approve as witnesses the chiefs of the country's five major banks: Lee Hwan-joo of KB Kookmin, Jeong Sang-hyeok of Shinhan, Lee Ho-seong of Hana, Jeong Jin-wan of Woori, and Kang Tae-yeong of NH NongHyup Bank.

Democratic Party Rep. Park Sang-hyeok, who leads his party's side on the Political Affairs Committee, said at a party national audit strategy meeting that "hackers have already automated and sophisticated their attacks using AI, yet banks conducted only nine AI-based simulated hacking exercises over five years — and those only began this year." He added that "the gap between the spear and the shield is widening."

Park said financial institutions' spending on information security last year actually fell 5.9 percent compared with 2022, even as banks' interest income rose by 4.5 trillion won ($3.36 billion) over the same period. "It was not a matter of lacking money — it was a lack of will," he said.

He added that the committee would summon the heads of the five major banks and other financial institution chiefs as witnesses at the Financial Supervisory Service national audit on Oct. 19 to hold them accountable for neglecting security investment despite rising profits. "We will also secure concrete commitments on expanding security investment and addressing vulnerabilities, so that security is seen not as a cost but as an investment in better financial services," he said. "We will also move quickly on regulatory reform."

The audit of the Financial Services Commission, Korea Development Bank and Industrial Bank of Korea got off to a charged start when the police questioning of People Power Party Rep. Kim Jae-seop on the first day of the national audit became an immediate flashpoint.

Kim, speaking in a personal statement, said: "We are here to conduct a national audit, and regardless of party affiliation, shouldn't the first concern be that a member of the legislature was summoned for police questioning? I find the criticism directed at me from the ruling party deeply regrettable, insulting and unconscionable, and I will demand an apology." In response, committee chair Yoo, a Democratic Party member, expressed regret, saying he believed Kim "must have understood the situation and gone through considerable difficulty."

The early portion of the Political Affairs Committee audit was dominated by a standoff between the two parties over document submissions and witness approvals. Democratic Party Rep. Son Myeong-su directed his criticism at the FSC, saying: "Hacking incidents have occurred across so many financial institutions that the public is deeply anxious and worried. We need to thoroughly identify the causes and draw up countermeasures, but that requires data — and the data has not arrived."

People Power Party Rep. Park Sung-hoon, meanwhile, took aim at the ruling party for opposing the designation of former Cheong Wa Dae policy chief Kim Yong-beom as a witness, saying that "public losses from single-stock leveraged ETFs rushed to market a week before local elections reached 54 trillion won." He said he had "deep regrets over the ruling party's attempt to block the National Assembly's efforts to uncover the truth and turn this into a hollow, toothless hearing."


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