Facing the music in South Korea

Syngman Rhee in 1956

Corruption scandals involving presidents and top-flight business leaders are to South Korea what coq au vin is to France. Vote-rigging allegations drove Syngman Rhee (president from 1948 to 1960) into exile in Hawaii; after they left office, both Chun Doo-Hwan (1980-88) and Roh Tae-Woo (1988-93) were tried and found guilty of mutiny, treason, and bribe-taking; Kim Young-Sam (1993-98) wasn’t jailed for corruption, but his son was; Roh Moo-Hyun (2003-08) was impeached and later committed suicide amidst bribery allegations. And that’s just a sampling.

Now, as we saw yesterday, it’s President Park Geun-hye’s turn to face the music. Choi Soon-sil, her friend of forty years, has already been taken into custody for a scheme, in which both women were involved, to squeeze money out of the huge – and hugely corrupt – conglomerates called chaebols that are at the heart of the country’s economy and that invariably play a big role in every major South Korean financial scandal.

Park Geun-Hye

In July of last year, according to the charges, Park met individually with the heads of the seven largest chaebols and demanded that they fork over millions to two Choi-run institutions, the Mir Foundartion and the K-Sports Foundation. Park refuses to quit over this affair, but national outrage is mounting steadily, and opposition parties are on track to impeach her. Something’s got to give, and soon.

Naturally, the whole ugly mess has also plunged the chaebols – for what feels like the hundredth time – into yet another calamity of their own making. For them, this crisis comes at an inopportune time. They’ve already endured years of weak domestic sales and low export levels. Now, thanks to the current scandal, the possibility of serious legal consequences looms – and something close to chaos reigns. “Normally,” one leading business figure told the Korea Times, “companies have an idea about what their business plans will be like around this time of the year. But as far as I know, many haven’t even begun drawing up plans yet due to increasing uncertainties.”

Hyundai Motor Chairman Chung Mong-koo attends the company's opening ceremony for the year in Seoul in this January 2, 2012 file photo. South Korea's smartphones and cars may have won global acceptance, but back home Koreans are increasingly disturbed by the influence the chaebol have over their lives. That very public anxiety is coming at a sensitive time for the conglomerates as they prepare the transtion to a third generation of family owners and face a strong, unwelcome, focus of attention in the run-up to 2012's parliamentary election. Hyundai Motor's Chung Mong-koo was sentenced to a three year jail term in 2007 for fraud which was suspended in exchange for community service and a $1 billion charity donation as he was deemed too important to the economy to be jailed. To match Insight KOREA-CHAEBOL/ REUTERS/Kim Hong-Ji/Files
Hyundai Chairman Chung Mong-koo

One after another, the superstars of South Korean business are being called on the carpet. On the weekend of November 12-13, prosecutors interrogated Chung Mong-koo, chair of Hyundai Motor Group, Lotte Group chairman Shin Dong-bin, and Lee Jae-yong, vice chair of Samsung (and next in line to run the whole shop) about their firms’ irregular money transfers to Choi’s foundations. Two days later, as part of a probe of a suspicious payment made by Samsung to a company owned by Choi and her daughter, hard drives and financial records were confiscated in a raid on the offices of Samsung’s advertising unit, Cheil Worldwide. It now appears that Samsung (which makes up a whopping 17% of the South Korean economy) donated a total of over $15 million to Choi’s foundations, in addition to which it reportedly offered no less than $3.1 million to pay for Choi’s daughter’s equestrian training in Germany. Yes, you read that right: $3.1 million for one person’s equestrian training.

This is, as it happens, precisely the kind of royal extravagance that has turned so many South Koreans against the self-indulgent excesses of their political and corporate elite. More on that tomorrow.

13 thoughts on “Facing the music in South Korea

  1. Well most of your comments is correct. howeve regarding Preesidnet Roh moo hyun is not correct. He do not have bribe scandal. Her oppopsition party has set up and the money which her spouse received, well which is not quitely receiving is landing from and she wrote down a credit for lent. However which was not accepted to court.

    1. Rho moohyun did not killed himself but was killed by someone. This is not a fact since any evidence was found but Koreans truely believe that he was killed…

    2. Yes he had been related to bribe scandal and his so-called ‘gang members’ took a lot of money. His family also received millions so president roh was prosecuted for “inclusive bribed” which is felony. It means roh actually couldve go jail. He was elected with a single promise:Make a history that justice and good can win over corruption in South Korea. But eventually he failed miserably. That’s why roh killed himself.

    3. President Roh had been charged against of bribe but he committed suicide and because of that Koreans had such a big pity for him so that President Lee stopped digging the scandal. I think if he was innocent there was no reason to kill himself.. what a tragedy.

  2. Some comments above contain falsity. WATCH YOUR MOUTH! Although this platform is new to people, you can get involved with legal suits. When it comes to the ex- president, roh moo hyun, the prosecutors spread the questions to the media as if they were true even before anything was judged, which is totally opposite to these recent cases. It is ridiculous that his case is being paralleled with actual and severe corruptions of other preside ts. Most of all, he didn’t get bribery from jaebeol. On the contrary, president Park gun hye and her sharman got an exponential amount of money in exchange of offering benefits such as evading taxes to many conglomerates. It’s fact that you can easily find out on internet, if you want to.

  3. Korea is probably one of the most corrupted countries in the world. No Doubt. Although, many Koreans call it…hmm…..it’s a “relationship” based society. No matter what, when it comes to corruption, it’s pretty much a way of life in Korea. Having said all this, it is quite obvious that Lady President Park has COMPLETELY failed to manage her personal relationship with this lady Choi. It is humiliating to say the least about some of the things that this lady Choi carried out in the name of the Lady President. The most important question here – are there any proof that Lady President had committed offenses that warrant impeachment? Opposition leaders are basically coming out of the woodwork to get some face time on TV as they sense that this is the golden chance for them to get their approval ratings up for the next year Presidential Election. All these labor unions who have been suffering during the Lady President’s tenure are basically the ones who are out demonstrating right now. Ordinary Korean citizens, while gravely disappointed with Lady President, basically want politicians to figure this out in ways that current government can continue to function for another year in time for next Presidential election. But, rather than looking out for the good of the people and the country, politicians are basically pouring gasoline over the fire to create chaos so they can line themselves up for the next Presidential election. Do you notice, on all these so called People’s Demonstrations, there isn’t a single Korean national flag? There are lots of Labor Union Flags, but there isn’t a single Korean National Flag. It’s the old adage – Majority is Always Seems to be Quiet. All these special interest groups, notably the hard line Labor Unions who align themselves with North Korea, are having a field day and dying to get that Lady President out of the office. After all, she is the one who had been trying to implement this idea of – Labor System Restructuring by way of… Pay for Performance!! (My god! What a noble idea!). Situation like this is been there and done that for Korea. Korea, throughout its history, has always fought each other from within… Koreans just can’t see others doing better than they are…., and Koreans always resort to taking someone down from the top, in order to get ahead (instead of thinking – I must working harder to get ahead…). Throughout history, Korea has always suffered from this, and this is one of the main reasons why Korea still doesn’t get respect from the Japanese. Infighting and Infighting…. Lady President probably should have never been voted into the Blue House (Presidential House). Quite obvious that she is not capable. However, if Korea is a truly democratic country, it must first gather Proofs that clearly show that she had done something that requires Impeachment. Just as a record – one of the ex President’s of Korea – KIM Dae-Jung, gave away more than US$400m to North Koreans fully knowing that they were developing nuclear weapons, WITHOUT even getting the approval from the Parliament. He also instructed to record telephone conversation of thousand’s of Korean citizens in secrecy. He took money from Korean Cheobols. Heck – his wife took money from Korean Cheobols. No one tried to impeach him. No one ever did. There were Countless other valid examples for almost every Korean President who committed crimes…… Just goes to show you what kind of country Korea is huh? Many things happening in Korea right now – You can’t make that stuff up!!!!

  4. They still don’t have Proof that the money that were sent by the Jaebols to those Foundations being run my that lady Choi had in fact made a U turn and ended up in Lady President’s bank account. In fact, most of the money the foundations had received from Jaebols (because Lady President somehow applied pressure to Jaebols to give the money) are still sitting at the bank accounts of those Foundations. So – you want to impeach the President for applying pressure to Jaebols? Heck – then we better jail/impeach every single freaking President in Korea. Because that’s what happens in Korea. It’s called Life in Korea.

  5. What Wisewon said about corruption in high places in Korea is correct. It is a nexus but such things are found all over Asia and in America too. What bothers some of us is that Korea is at a critical juncture right now, with economy not doing too well, external relations dicey and the weirdo up north making every one jittery. It is not clear that opposition has a coherent policy to pursue in mind; there is a big danger that a significant shift in Presidency and (if it happens) in Policy at this point might see Korea naively walking into the waiting embrace of the Dragon.

    1. Good points. This affair seems to be moving quite quickly. I’m no little about legal discourse, so I wonder if the pace is being unfairly driven by the opposition, or even the media. A rational outcome will rely on calm actions, not hasty reactions.

  6. Thanks for your attention and introducing critical depressing issues to others. i am korean. it’s just not a simple corruption. Every aspect of korea has been rotten from ‘Japanese colonial era’. We weren’t able to treat pro-Japanese group before and appoint them important position in society. They have been trying to erase their stain history and still have massive power.
    Now, We korean make our country clear. We will clean up deep-rooted rotten elite. ‘Global attention’ that we need.

  7. As much as its becoming apparent that Park paid Samsung back by pressuring a merger beneficial to its executives but no one else, this corruption pales in comparison to the Clinton family in the U.S.

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