District Claws Back $130,000 Over Plagiarized Report

In South Korea, an appeals court has sided with Busan’s Haeundae District in a long-running dispute between the local government and a public consulting firm that was awarded a contract to draft a long-term development strategy.

The saga began in 2020 when the Haeundae District government awarded a contract to an unnamed public consulting firm to draft a report entitled Haeundae 2040 Vision and Strategy for the Next 20 Years. The contract was worth 500 million won ($365,000) and included an up front payment of 50 million won ($36,500) with the remainder of the payments to be made over the course of the project.

However, the report was almost immediately beset with problems. The original deadline was for November 2021 but was extended twice. Also, after an interim report was submitted, plagiarism suspicions arose, with the government noting that the report borrowed verbatim text from similar documents written for other local governments.

In December 2022, the Haeundae District terminated the contract with the company and demanded the return of 180 million won ($130,000) in payments (including the 50 million won up-front payment. However, the company claimed that it had said the project was 77% complete and that no reimbursement was necessary.

A lower court largely sided with the contractor. It found that, while the termination of the contract was valid, the project was too far along and could still be of some use to the government.

The government appealed and now the appeals court has reversed that decision. The court analyzed the provided report and found that the plagiarized deliverables had no value to the government and that the completion percentage was meaningless as the stated goal of the project was to finalize the report after surveys and public hearings.

Since all of the issues were caused by the contractor, the court ordered them to repay the government the 180 million won they had received up to that point. It is unclear if the contractor plans to appeal this decision.

All in all, it’s a major win for the local government. That said, it’s far from the first time that a government report has been challenged this way. However, it may be one of the last.

A Tale of Two Counties

In March 2023, I wrote about the case involving grant writer Jean McCorquodale and the County of Santa Clara in California.

In that case McCorquodale, allegedly through political connections, was awarded a massive no-bid contract to write a book detailing the history of the county and its government. However, in June 2022, a report from the Mercury News found that roughly one-fifth of the book was plagiarized from various sources.

At the time, it was reported that the book had cost taxpayers $500,000. However, by the time the smoke cleared, that figure was raised to $1 million.

Santa Clara County, unlike the Haeundae District, did not file a lawsuit against McCorquodale. Instead, the country determined that the expense of such a lawsuit would likely exceed the value of any money that might have been recovered.

The country, understandably, just wanted to move on from the ordeal. With little hope of significant financial recovery, there simply wasn’t more to do.

Why the Haeundae government opted to file a lawsuit likely comes down to various factors. Differences in the legal systems is one, but it also appears that the Haeundae District government had a much better contract for this kind of recovery. This latter point is backed up by the county’s civil grand jury, which found that the county government had failed to specify the scope of the project or provide adequate oversight.

However, even then it wasn’t simple. The lower court ruled against the government. It took an appeal and a review from the Korean Copyright Commission appraisal to get to this point. Even then, it’s unclear if this was the best option financially as we don’t know how much the government spent on the case.

Still, the ruling does set a precedent in Korea. Low-quality and plagiarized work is not acceptable in these kinds of reports. They can and will result in your being forced to pay back any money you received from the project.

But that precedent comes at an odd time and it is unclear how much of an impact it will have in our changing landscape.

How AI Changes Everything

One of the more interesting elements of this story isn’t what happened, it’s when it happened. The project was awarded in 2020 and was canceled in December 2022.

ChatGPT famously launched to the public in late November 2022.

AI has impacted nearly every aspect of our lives one way or another. However, one of the biggest impacts has been on plagiarism.

If this project had been launched in 2023 or 2024 instead of 2020, I can almost guarantee that it would look very different. Instead of relying on traditional copy/paste plagiarism, the contractor likely would have used AI to generate some or even all of the content.

This risk is not hypothetical. Just last month we examined the case of an expert witness who provided 3M a report that relied heavily on AI. This caused 3M to withdraw the report and attempt to disqualify their own witness as an expert. However, he was forced to testify about his use of AI, significantly damaging his and 3M’s credibility in the case.

So what happens when contractors use AI to write these kinds of reports? Though AI detection is improving, reliance on AI detection alone remains a risky proposition. This is especially true in a high-stakes situation like these reports, where hundreds of thousands of dollars are often on the line.

Ultimately, this comes down to having better agreements in place when granting these kinds of contracts. Those contracts need to not only clearly set expectations that the work will be non-AI, non-plagiarized, etc. but also provide for penalties if it fails to live up to those expectations and ways to check for compliance.

One core component of this is going to be ensuring that the final product is not the only deliverable. Notes, drafts and other material used to create the final product should be provided as well. The ability to check HOW a report was created is as important as the content itself.

However, I’m skeptical that governments will learn that lesson anytime soon, especially if their contractors are reluctant to provide the information in question.

Bottom Line

In the end, what separates Haeundae from the other cases above isn’t just a different legal system, it’s a much better-defined contract. The Haeundae District made it clear what their expectations for the project were, and though it took a while to get there, the courts eventually sided with them.

Whether you’re a government, a business or any other organization hiring a contractor for a report, you need to ask yourself one question: If it goes sideways, do you want to be where the Haeundae District is or do you want to be where Santa Clara County is?

It’s the old adage about planning to fail being better than failing to plan. Having airtight agreements in place with your contractors not only helps protect you if things go wrong, it also makes it much less likely that they will.

But that’s the problem. It’s easy to skip doing that in the heady days when two parties are coming to an agreement. Thinking about potential pitfalls is difficult, especially when there is so much optimism.

Still, it’s important to do so. Plagiarism, unauthorized use of AI, copyright infringement, etc. are all just some of the potential risks. It’s worth taking the time to review both the legal and ethical issues such a project might raise and head those off before the contract is signed.