South Korea: tame chaebol reform, or none at all?

 

Moon Jae-in

In South Korea these days, the billion-dollar question is this: is the administration of President Moon Jae-in serious about reforming the systematic corruption that’s been a national institution ever since Samsung, Hyundai, LG, and the other so-called “chaebols” began dominating its economy?

The history of chaebol criminality – which has largely taken the form of bribes to top government officials – goes back to the years following the Korean War. For decades, the South Korean public has increasingly cried out for reform. President Moon, who took office last year after his predecessor, Park Geun-hye, was removed from office on corruption charges, has called chaebol corruption a “deep-rooted evil.”

But does he mean it? Or are the stiff sentences handed down in August to Moon’s crooked predecessor, Park Geun-hye, and her friend and partner in crime, Choi Soon-sil, a fluke?

Park Geun-hye

Then, of course, there’s the other, depressingly familiar, possibility: will Park and Choi, like their fellow crook, Samsung chief Lee Jae-yong (aka Jay Y. Lee), and a raft of convicted CEO-felons and presidents before him, end up being let out of jail on some technicality that leaves the entire country even more cynical about their judiciary’s dedication to equality before the law?

Kim Sang-jo

Well, so far Park and Choi remain behind bars. And only days after their conviction was affirmed – and their sentences enhanced – by a high court, South Korea’s Fair Trade Commission (FTC) proposed new rules to govern the chaebols. The head of the FTC, Kim Sang-jo, who has acquired the nickname “the chaebol sniper,” has declared his determination to take on the ownership strucures of the two largest chaebols, Samsung and Hyundai.

Bruce Lee of Zebra Management

An abiding problem at these and other conglomerates has been that the families that founded them still rule them like kings, routinely making sweeping managerial decisions while ignoring the input of shareholders. Kim’s stated goal is to diminish the power of those families, whose grip on their conglomerates well exceeds their relative value of their ownership shares in those conglomerates.

How to address that problem? Well, under current regulations, a chaebol must own at least 20% of its listed subsidiaries and 40% of unlisted units. Kim’s new rules would raise those figures to 30% and 50% respectively.

Robyn Mak

That’s not all. Members of a chaebol’s founding family would not be allowed to have more than 15% of the voting rights in a listed affiliate of that chaebol. Other new rules would also limit the power of corporate kingpins to pull off mergers or spin off subsidiaries without shareholder support. They would also clamp down on circular shareholdings and other intra-conglomerate machinations and intensify disclosure requirements.

Yet in the eyes of serious observers, the commission’s proposed changes are too little, too late. “I would give 20 points out of 100, a basic score, to what the Moon government has done for corporate governance reform,” Bruce Lee of Seoul-based Zebra Investment Management told Bloomberg News.

Commentator Robyn Mak called the proposed new regulations “the first rewrite of antitrust rules in nearly four decades,” but added that given the slow growth of South Korea’s economy, the chaebols are in the catbird seat. “That means corporate governance reform probably will wind up weaker than originally anticipated.”

Indeed, modest though Kim’s proposed changes are, “Moon will struggle,” maintained Mak, “to gain political support to enact some of the new ideas.” We’ll keep abreast of developments.

South Korea: Will President Park’s 25-year sentence hold?

Samsung headquarters in Seoul

On the South Korea corruption front, the news keeps outdoing itself.

As we’ve noted before, the South Korean economy is dominated by a handful of conglomerates known as chaebols, all of them run by powerful and famous families. Over the decades, members of these families have been caught committing massive acts of corruption. They used to get away with it, usually, because the chaebols were viewed as having lifted South Korea up into the ranks of first-world nations and the families that ran them were objects of near-reverence. In recent times, however, South Koreans have increasingly viewed the chaebols as a hindrance to further economic growth, and as a result have been less tolerant of corruption on the part of their celebrated bosses.

Park Geun-hye

On this site we’ve been following the biggest corruption scandal in South Korean history. Over the past couple of years, investigators have been probing interactions between Samsung, the largest of the chaebols, and Park Geun-hye, who was president from February 2013 to March 2017. Those investigators eventually found that a close friend of Park, Choi Soon-sil, had taken a huge sum of money from Samsung in exchange for permission from Park to merge two of Samsung’s subsidiaries.

Lee Jae-yong (aka Jay Y. Lee)

The consequences of these findings have been dramatic. A quick round-up: in February 2017, prosecutors arrested Samsung’s de facto head, Lee Jae-yong, known in the West as Jay Y. Lee. In March 2017, Park was removed from office and replaced with Moon Jae-in, who promised the South Korean people that he would take action to limit the power of the chaebols. Alas, this is the oldst promise in South Korean politics. Presidents are always saying that they’ll rein in the chaebols, and they never do. In the same way, the CEOs of chaebols are always being arrested on charges of bribery, embezzlement, and the like, only to go free after little or no time in jail.

And that’s what happened to Jay Y. Lee. Last August, after a five-month trial on a range of charges, he was found guilty of everything and was sentenced to five years behind bars. This past February, however, without any warning, a judge sprung him from prison, providing an utterly absurd excuse for doing so.

To many South Koreans, this stunning move – this instant unraveling of justice – seemed to spell an end to any hopes of real reform.

Choi Soon-sil

Is there any possibility that South Korean authorities will do anything to suggest that they’re serious about tackling chaebol corruption? Look at the case of former President Park, who’s been in jail since last year. This past April, a lower court sentenced Park to 24 years and $16 million in fines for bribery, extortion, abuse of power, and other charges. In late August, a higher court, noting that she’d taken even more cash from Samsung than previously believed, bumped her sentence up to 25 years and $18 million. On the same day, her friend Choi was given a 20-year sentence. Meanwhile, in two additional trials that concluded in July, Park was sentenced to a total of eight more years in jail for breaking election laws and illegally spending government money.

Will these sentences hold? Or will Park and Choi be dealt the same get-out-of-jail-free card that Jay Y. Lee was handed? Stay tuned. In the weeks to come, we’re going to be giving these high-level hijinks the closer scrutiny they deserve.

Lanny Davis: The swamp personified

Lanny Davis

It’s been three years since we last took a look at Lanny Davis, the longtime Clinton family operative and inside-the-Beltway lobbyist and image-massager for several of the world’s worst dictators. When we wrote about him in 2015, Davis was a TV fixture, running from one cable-news studio to another in an effort to put a positive spin on the damaging news about Hillary’s e-mail server.

“Do you ever get tired of cleaning up after the Clintons?” Fox News journo Chris Wallace asked Davis at the time. Salon has called him a “well-known spinster…whom no one trusts.” Some more fun quotes about this creep: in 2012, calling him “a pitchman for warlords” who “carr[ied] the Devil’s water in Washington,” the Atlantic‘s Jon Lovett said that Davis “represents all that is wrong with politics today.” A 2013 piece in the New Republic began: “The last time we heard from Lanny Davis, he was doing what he does best: representing a dictator.” Among his clients: Teodoro Obiang Nguema Mbsogo, dictator of Equatorial Guinea, widely known as the “Auschwitz of Africa,” and the Laurent Gbagbo, President of Cote D’Ivoire.

At Swamp Central

In short, to use a term that has gained currency since 2015: he is the swamp.

This July, after having kept a relatively low profile for quite a while, Davis resurfaced. News was that President Trump’s former lawyer Michael Cohen, who is now the target of a federal probe owing to his role in Trump’s payoffs to former mistresses, had engaged Davis’s services. At the Federalist, David Harsanyi offered a timely reminder of Davis’s career history under the headline “Let’s Take A Moment To Remember The Corrupt Hackery Of Lanny Davis,” stating that “it’s going to be fascinating to watch a shyster like Michael Cohen be transformed into a hero of The Resistance.” Still, added Harsanyi, “America—even with all our transgressions—simply doesn’t deserve Lanny Davis. None of us do.”

Michael Cohen


Davis, explained Harsanyi, “can be properly described as a personification of the cliché, ‘everything that’s wrong with Washington.’ Cringingly slavish to those in power, a consigliere, fundraiser, surrogate, and cheerful liar, Davis was a perpetual presence on cable TV during the Clinton scandals. Few men in history have ever been able to summon his kind of loyalty in the pursuit of shameless, transparent deceit and corruption.” Well, caan’t argue with any of that.

Harsanyi emphasized how ironic it is that Davis, of all people, is now “preaching—without even a trace of irony—the value of integrity and honesty,” contending that Cohen, formerly a two-bit shyster and bagman type, “has turned a corner in his life, and he’s now dedicated to telling the truth to everyone.” After all, noted Harsanyi, Davis played a not unimportant role “in corrupting the value of personal responsibility, civility, and morality in our political culture. His unwavering defense of Bill Clinton’s corruption and extramarital dalliances (and possibly worse) is a valuable reminder of how we got to this place.” Yep.

David Harsanyi

“For years,” recalled Harsanyi, “Davis told America that what they were seeing and reading was not what was happening. After tapes emerged of the Clintons illegally soliciting donations from big-money donors at the White House in 1997, for example, Davis sprang into action, not only contending that there was ‘no suggestion that there was any solicitation for money’ — despite the fact that the tapes suggested exactly that — but that many of the big contributions of those who had attended the event and only days later donated to the Clintons were merely an ‘incidental’ occurrence.” Now, this same man who “handled” Bill Clinton’s so-called “bimbo eruptions,” “smearing women he surely suspected were telling the truth about President Clinton’s habitual womanizing” (and worse) is making the usual cable-news rounds striving to whip viewers into a rage over “the tapes of a president and his lawyer discussing how to hide an alleged affair.”

Harsanyi’s summing up is right on the money: “Lanny Davis possess a preternatural chutzpah that puts most contemporary partisan hacks to shame. We’re all worse off having him back.”

In the “Republic of Samsung,” it’s (corrupt) business as usual

Lee Jae-young

For many people in South Korea, the arrest, trial, conviction, and imprisonment last year of Lee Jae-young – that country’s richest man and the de facto head of Samsung, the country’s largest business – signaled the start of a bright new era. After decades of corruption in the chaebols, the powerful family-run conglomerates that have dominated the postwar South Korean economy, the ouster last year of President Park Geun-hye and her replacement by Moon Jae-in, who promised that the traditionally well-connected leaders of these firms would no longer operate with impunity, seemed indeed to represent radical and long hoped-for change.

Park Geung-hye

Yet, as we discussed on Tuesday, all hopes for revolutionary reform were crushed last month when a High Court judge abruptly ordered Lee (known in the West as Jay Y. Lee) freed from prison.

Lee, according to Bloomberg News, “appeared stunned.” So, reported the Wall Street Journal, were “some South Korean lawmakers and legal experts.” The South Korean public was stunned, too. And angry. Street protests ensued. Moon had promised change, but this was business as usual. Over the decades, one chaebol honcho after another had been tried on corruption charges only to be found not guilty, or convicted and then pardoned, or – as happened with Lee’s father in 2008 – given a suspended sentence. Meanwhile, as the New York Times has noted, South Korean courts have “routinely sentenced lesser-known white-collar criminals to far longer terms for lesser offenses.”

Here it was all over again. “The ‘Republic of Samsung’ lives on,” griped Professor Kwon Young-june of Kyung Hee University. The judge’s decision, complained Park Yong-jin, a member of the National Assembly, only “confirmed once again that Samsung is above the law and the court.”

A view of the site of the Pyeongchang Olympics

Indeed. The High Court’s ruling – which came only days before the opening of the Winter Olympics in Pyeongchang, South Korea – is absurd on its face. Among the items of evidence that senior judge Cheong Hyung-sik chose to drop down the memory hole was a set of 39 handwritten notebooks in which an economic adviser to President Park recorded specifics about bribes paid to Park by Lee. Other exhibits in the trial included documentation of exchanges between Park to Lee that made clear the nature of the quid-pro-quo between them.

Samsung headquarters, Seoul

Many commentators had been arguing that South Korea is in the process of changing its stripes; nobody can seriously make that argument now. Lee is a criminal for whom prosecutors sought a sentence of 12 years in prison: that’s how serious they considered his transgressions to be. The prosecutors demonstrated that Lee had committed embezzlement, illegally hidden assets overseas, and lied to the parliament under oath. They proved definitively that he had paid bribes in return for government support for a merger that, as the Financial Times put it, “was crucial for Mr. Lee to cement his hold on the organisation, but was widely criticised for not benefiting shareholders.” As one politician observed, by way of underscoring the absurdity of the High Court’s ruling, Judge Cheong appeared to expect the world to believe that Lee had handed over a fortune to President Park in return for absolutely nothing whatsoever.

So it stands, then. For a brief shining moment there, it looked as though South Korea had experienced a new birth of justice and equal treatment under the law. Alas, Lee’s release shows that under Moon, the old rules remain in place.

Lee is free – and South Korean reform is dead

We’ve been writing about Samsung since September 2016, when we explained the distinctively South Korean type of family-run corporate conglomerate known as the chaebol. “The simple fact,” we noted, “is that pretty much everybody in the South Korean government is on the chaebols’ payrolls – or wants to be. And the growing popular resentment of this grand corruption is an extremely good sign.”

Park Geun-hye

A couple of months later we reported on charges that South Korea’s then President, Park Geun-hye, had helped a friend, Choi Soon-sil, extort huge sums of money from several of the chaebols. The largest chaebol, Samsung, which accounts for some 17% of South Korea’s economy, gave Choi over $15 million. By December 2016, the official probe into this corruption uncovered that the sum extracted from Samsung was closer to $20 million. In return, President Park allowed the merger of two Samsung entities.

Lee Jae-yong (aka Jay Y. Lee)

In January of last year came the news that prosecutors had barred Lee Jae-yong – the de facto head of Samsung, grandson of its founder, Lee Byung-chul, son of its official chairman, Lee Kun-Hee (who stepped down from day-to-day management, but did not relinquish his title, after a 2014 heart attack), and arguably the most powerful man in South Korea – from leaving the country. In February Lee (who in the West goes by the name Jay Y. Lee) was arrested; in March, Park was removed from office.

Her replacement, Moon Jae-in, promised to curb the power of the chaebols, whose domination of the nation’s economy has thwarted new business development, whose cozy ties to government leaders have caused widespread suspicion and resentment, and whose leaders’ ability to escape punishment for large-scale corruption has made them seem to be above the law.

Moon Jae-in

Lee’s trial began in March. Dubbed “the trial of the century” in South Korea, it involved five charges: bribery (maximum possible sentence: five years), embezzlement (eight years) perjury (ten years), concealing criminal proceeds (five years), and hiding assets abroad (life). Prosecutors asked for a sentence of twelve years. In August, after five months of testimony, Lee was found guilty of all five charges and sentenced to five years in prison. He was thereupon “sent to a prison for white collar criminals in Uijeongbu.”

Then, last month, came a startling development. Lee, who had appealed his sentence, was taken from his prison cell and transported to the Seoul High Court. There, presiding senior judge Cheong Hyung-sik informed him that he was to be released immediately and would be on probation for four years.

Lee in handcuffs

Cheong – who, technically speaking, had not reversed or commuted Lee’s sentence but cut it in half and then suspended it – maintained that Lee’s only real offense was to have succumbed understandably to inordinate pressure exerted on him by Park Geun-hye while she was serving as President. “Park threatened Samsung Electronics executives,” claimed the judge. “The defendant provided a bribe, knowing it was bribery…but was unable to refuse.” Not a small number of South Koreans regarded this as a thoroughly absurd argument. 

More on Thursday.

Catching up with full-time defendant Cristina Kirchner

Cristina Fernández de Kirchner

Here at Useful Stooges we’ve spent a lot of time covering the misadventures of former Argentinian president Cristina Fernández de Kirchner.

We’ve examined economist Joseph Stiglitz’s intimate (and profitable) relationship with the Kirchner clan. We’ve pondered hedge funder Kyle Bass’s foolish championing of Cristina’s disastrous economic polities. Then there’s Wall Street hotshot Georges Ugeux, who blamed Argentina’s fiscal problems not on Kirchner corruption but on the country’s sovereign-debt creditors. And economist Mark Weisbrot, who looked at an Argentina headed for financial disaster and proclaimed that it was doing “remarkably well.”

Jose Fernando Lopez
Jose Fernando Lopez

We met Kirchner crony José Francisco López, who was turned in to the cops by a bunch of nuns who caught him trying to throw plastic bags stuffed with crookedly acquired cash over their convent wall.

On December 17, 2015, we congratulated Argentina on electing as its new president the candidate who was not Cristina’s chosen successor. And on December 31, 2016, we celebrated New Year’s Eve by noting that a federal judge, Julian Ercolini, had ordered Cristina put on trial for corruption, along with her former Planning Minister, Julio de Vido, and her former state secretary for public buildings, the above-named José Francisco López.

Judge Claudio Bonadino

That was the last time we checked in with Cristina. Since then, the former President has been a full-time professional defendant. On March 23 of this year, another judge, Claudio Bonadino, also ordered her to stand trial, this time for instructing her country’s central bank “to sell dollar futures at artificially low prices, causing Argentina to lose hundreds of millions. Also indicted was her former Economy Minister, Axel Kicillof. In April she racked up her fourth criminal charge, this one for engaging in real-estate transactions for the purpose of money laundering. On that occasion her passport was confiscated, and her two children, Florencia and Maximo, were also indicted.

Amado Boudou

In June, in a desperate effort to acquire immunity from prosecution, she filed to run for Senate as the candidate of a new party she had founded just for that purpose. In the August elections, despite her massive corruption record, she actually won. At an October inquiry, Cristina “defended a secret pact negotiated by her government with the Iranian regime in 2011. And in November, her former VP, Amado Boudou, was arrested on charges of embezzlement and illicit association.

Now, despite her senatorial immunity, it may soon be Cristina’s turn to sample prison food. On December 7, Judge Bonadino asked the Senate to waive her immunity and allow her to be arrested and tried on charges of treason. The specific crime: covering up Iran’s role in the fatal 1994 bombing of a Jewish center in Buenos Aires. We’ll see what happens. Non-fans of the Kirchner clan may again have reason to celebrate on New Year’s Eve.

A gilded Cage

There are few people more gifted at the art of phony moral preening than your average Hollywood movie star. Most of them know next to nothing about anything, but a remarkable number of them are quick to weigh in on political issues and say whatever they think will make them look like pillars of virtue.

And yet one after another of these stars, who are already extremely well paid, are also quick to sell their services, for the right price, to any brutal dictator who comes down the pike.

Will Smith

We’ve seen, for example, that Will Smith and his wife, Jada Pinkett Smith, have gone all-out to promote Dubai, which, of course, is one of the United Arab Emirates, where gays are executed and where straight tourists who engage in even the tamest public displays of affection are subject to long prison terms. We’ve discovered how Sting took a million or two dollars to perform for the daughter of murderous Uzbek dictator Islam Karimov and how Nicki Minaj cashed a $2 million check from the Angolan dictator José Eduardo dos Santos for a similar gig.

Sharon Stone with Putin and unidentified girl

We’ve listed the names of several celebrities – among them Goldie Hawn, Kurt Russell, Kevin Costner, Paul Anka, Gérard Depardieu, Mickey Rourke, and Sharon Stone – who’ve taken money from Vladimir Putin to turn up at official events in Russia, and other luminaries – including Seal, Jean-Claude Van Damme, and Hilary Swank – who’ve accepted payments to entertain Putin’s puppet leader of Chechnya, Ramzan Kadyrov.

Now it’s time to add another Tinseltown name to this roster of shame: Nicolas Cage. Born Nicolas Coppola, a nephew of filmland’s master of nepotism, Francis Ford Coppola, Cage, now 53, has been one of the luckiest men in the business, reaping great rewards in exchange for a very modest talent. He gets millions of dollars per picture and is reportedly worth about $25 million.

Nicolas Cage in Kazakhstan with an official of the Eurasia Film Festival

In short, he is not a man in drastic financial need. Nonetheless, in exchange for an unknown but presumably hefty sum, he recently attended the Eurasia Film Festival in Kazakhstan, a country that has been ruled for over a quarter of a century by the tyrannical Nursultan Nazarbayev.

Some people will do anything for a buck. Cage, who invariably comes off on talk shows as something of a self-important jerk and all-around dimbulb, was willing to don a native Kazakh outfit that earned him widespread mockery online. “I would be pleased to participate in some film project on the territory of Kazakhstan,” Cage told local journalists during his lucrative visit. “I enjoyed the architecture of your capital. What I saw reminded me of an old black-and-white film that depicted the future.” These stars often make such dopey, ingratiating statements in these situations. It’s hard not to believe they are reading from a script. In any event, one thing is clear: Nicolas Cage didn’t go to Kazakhstan for his health.

Prison report: Lula in, Leopoldo out

While all kinds of terrible things are happening in South America and around the globe, that continent recently supplied us with a couple of pieces of very good news.

Lula

In Brazil, almost a year after socialist President Dilma Rousseff’s removal from office, her mentor, former President Luiz Inácio Lula da Silva, has been sentenced to nine years and six months in prison. Both were brought down by their roles in the Petrobras scandal, a.k.a. Operation Car Wash, the largest scandal ever in the history of that nation. Lula, a Worker’s Party politician who served two terms in Brazil’s highest office and who anointed Rousseff to succeed him, was found guilty of corruption and money-laundering. Lula plans to appeal the verdict; meanwhile, four – count them, four – other corruption trials lie ahead of him.

Dilma Rousseff

The specifics of Lula’s corruption are tawdry and rather dull: he was found guilty of taking a massive bribe – in the form of a luxury beachfront apartment – from a construction company, OAS. In addition to presenting Lula with the apartment, OAS also gave Lula’s party about $27 million in bribes in return for a suspiciously lucrative contracts with Petrobras. At the trial, Lula denied having anything to do with the apartment in question.

Protégé and mentor in happier times

It’s hard to explain just how staggering the conviction of Lula is in his home country. He’s not just a former president but a national icon. His admirers believe that his socialist policies helped boost the Brazilian economy, lifting millions out of poverty. As a result, he’s widely revered as a folk hero, the ultimate man of the people, the very personification of socialist largesse – so that the idea of him raiding the treasury on behalf of OAS in exchange for an apartment seems a particularly cheesy sort of betrayal.

Lula is actually eligible to run again for president, and, prior to his conviction, was leading the polls in the run-up to next year’s elections. But if his appeal fails, he won’t be allowed to be a candidate. In any case, his conviction has surely diminished him in the eyes of at least some of his fans.

Leopoldo López

So that’s the good news from Brazil. Meanwhile, the Supreme Court of Venezuela, which is basically a tool of President Nicolás Maduro, took an action that surprised the world: it ordered that Leopoldo López be removed from prison, where he has languished for more than three years, and placed instead under house arrest.

Nicolás Maduro

López, of course, is someone whose fortunes we’ve been following pretty closely on this site: as we wrote in March of last year, he is “the chavista regime’s most eloquent critic [and] the opposition’s most charismatic leader” and was plainly locked up “for no other reason than that he is …by far the most potent threat to the power of…Maduro.”

Hugo Chávez

This is a man who, as mayor of one of the five municipalities that make up Caracas, was recognized for his erudition and eloquence and showered with international awards for excellence and transparency in public service – making him the very antithesis of the crude caudillo Hugo Chávez and his lunkhead successor, Maduro. As we have put it previously:

López is so manifestly everything that Maduro is not, so completely the Gallant to his Goofus, that it seems almost too tidy a scenario; if this were a film script, the producer would almost certainly order the writer to make the villain at least somewhat less buffoonish and corrupt and the hero somewhat less noble and courageous.

Liliana Tintori at the White House in February with President Trump, Vice President Pence, and Senator Marco Rubio

Our most recent mention of López here was in March, when we noted that his wife, Liliana Tintori, had met with President Trump at the White House not long after the latter’s inauguration. At the time, Trump issued a call for López’s immediate release. It was more than President Obama had ever done for López, and it may well have made a difference.

In any event, López is out of jail, and that’s good news. But, like the rest of the people in his country, he’s not yet entirely free. We’ll continue to keep an eye on the course of Venezuela’s fortunes, and Leopoldo’s.

Enemies of reform in Brazil

Dilma Rousseff

Last August, the socialist president of Brazil, Dilma Rousseff, was removed from office for corruption. As we’ve noted on this site, fellow socialists came to Rousseff’s defense, with David Miranda (husband of notorious Edward Snowden helpmeet Glenn Greenwald) arguing in the Guardian that Rousseff was the victim of corporations and rich people who don’t like socialism.

But in the weeks leading up to Rousseff’s removal, millions of Brazilians took to the streets to protest her corrupt government and the deep and lingering economic recession over which she had presided, and to demand her departure from office. Ideologically, the protests were not unlike those currently rocking Venezuela (which, of course, is in far worse shape than Brazil): people were sick of having their freedom squelched and their economy mismanaged.

Michel Temer

Rousseff, a member of the Workers’ Party, was replaced by her vice president, Michel Temer, who belongs to the more conservative Brazilian Democratic Movement Party. Now, Temer is no saint. Like Rousseff before him (and like many others who still hold high positions in his government), he’s been implicated in the massive “Lava Jato” corruption case surrounding the federally owned oil company, Petrobras.

Here and below: some images from the General Strike

During his brief tenure, though, he has at least sought to rescue Brazil from the consequences of his predecessor’s socialist policies. Taking office in the midst of an economic crisis, he warned that Brazil’s economy faced a “meltdown” unless “severe fiscal discipline and belt tightening” were introduced.

Pronounced himself the head of a “national salvation government,” he began instituting the kind of reforms – including significant changes in public employment contracts and pension arrangements – which, although uncomfortable in the short term for many working-class Brazilians, sought to correct policies that simply could not be sustained in the long term without doing to Brazil something similar to what chavismo has done to Venezuela. Indeed, Temer’s reforms might well have helped Brazil, which has long been looked to as a nation of immense but unfulfilled economic promise, to finally develop, within a few years, a robust First World economy dominated by a large and prosperous middle class.

But many workers, unsurprisingly, weren’t happy with Temer’s new policies. The socialists felt threatened to their core. And the labor unions were outraged. On April 28, a new set of public protests began. This time, however, it wasn’t a matter of angry citizens taking spontaneously to the streets. This was a nationwide general strike, the first in Brazil since 1996, called by the labor unions. Schools were closed. So were most businesses. Public transport came to a near-total halt. The entrances to many airports were blocked. Media described the nation as “paralyzed.” There was widespread violence. Cars and trams and buses were burned. In the Sao Paulo neighborhood where Temer owns a house (he currently lives in the vice-presidential residence in Brasilia), protesters “broke up sidewalks and lobbed chunks of concrete at police.”

While socialist leaders celebrated the general strike as an effective pushback against Temer, others disagreed. Yahoo News, for example, quoted landscape architect Marcelo Faisal as saying that “reforms need to take place” and that the strike hadn’t (in Yahoo’s words) “lived up to the hype.” A shipping news website seconded this view, reporting with relief that the strike had “impacted the country’s ports, especially the largest port of Santos, less than originally feared.” Doubtless we haven’t heard the last of the enemies of reform in Brazil, but it may well be that despite their occasional noise-making, the necessary reform will, after all, be able to proceed. And in the end that will likely be good news for almost everyone in that huge and promising country.

South Korea kicks out Samsung’s pet prez

Park Geun-hye

For the last few months, we’ve been following the growing South Korean corruption scandal that involves the Samsung Corporation, President Park Geun-hye, and the President’s best friend Choi Soon-sil. In a country where corruption scandals involving ties between top political leaders and the powerful chaebol – the immense, family-controlled conglomerates that are the pillars of the nation’s economy – are a frequent occurrence, the present scandal was the biggest ever.

South Korea’s Constitutional Court

On Friday, that scandal came to a climax as the eight justices on the country’s Constitutional Court voted unanimously to remove Park Geun-hye from the office of the presidency for committing acts that “betrayed the trust of the people and were of the kind that cannot be tolerated for the sake of protecting the Constitution.” The court’s move, which followed the suspension of Park’s powers in December when the national legislature voted for impeachment, and which took effect immediately, was without precedent in South Korean political history.

Choi Soon-sil in police custody

The unseating of Park caused joy in some quarters and fury in others. A protest outside the courthouse by supporters of Park turned violent, with two protesters dying in the melee. As for Park, now that she no longer enjoys the immunity from prosecution that comes with being president, she is likely to be tried on charges of bribery, extortion, conspiracy, and abuse of power for having extorted millions of dollars from Samsung and other firms in collaboration with her lifelong friend Choi Soon-sil.

Lee Jae-yong

Park’s ouster on Friday followed the arrest, on February 17, of Lee Jae-yong, the de facto head of Samsung, and the announcement on February 28 that prosecutors would be indicting Lee “on charges of bribery and four other offenses.” As Choe Sang-hun wrote in the New York Times, “Samsung, the nation’s largest conglomerate, has been tainted by corruption before. But the company has been considered too important to the economy for any of its top leaders to spend time behind bars — until now. The jailing of Mr. Lee, who is facing trial, is another potent sign that the old order is not holding.”

The Constitutional Court’s ruling marked a victory for honest government and above-board business practices. As Choe noted, the constitutional orderliness of the process also demonstrated how how far South Korean democracy has come in the last half-century. Ahn Byong-jin of Seoul’s Kyung Hee University told the Times that “the curtain is finally drawing on the authoritarian political and economic order that has dominated South Korea for decades.”

Park’s supporters clash with police

The verdict may also, alas, turn out to have a serious downside. To quote Choe, Park’s departure “is expected to shift South Korean politics to the opposition, whose leaders want more engagement with North Korea and are wary of a major confrontation in the region. They say they will re-examine the country’s joint strategy on North Korea with the United States and defuse tensions with China, which has sounded alarms about the growing American military footprint in Asia.”

Hwang Kyo-ahn

In other words, South Korea, which in recent years has been a reliable bulwark of democracy in the region, may end up being led by people who are eager to appease Kim Jong-un and Beijing and to distance themselves from the U.S. and other democratic allies. The election to replace Park must take place within sixty days; in the meantime, an ally of Park’s, Hwang Kyo-ahn, will serve as acting president. According to the Times, the Trump government “is rushing a missile defense system to South Korea so that it can be in place before the election.”