The chaebol suicides

Samsung headquarters, Seoul

Another week, another stroll down memory lane. Chaebol memory lane, to be specific. In recent weeks we’ve been recounting the stories of various top-level executives of these massive South Korean conglomerates – men who, as is their wont, have ended up in hot water, and often in courtrooms (and, sometimes, at least briefly in prison cells) because of their corruption.

To be sure, chaebol leaders who get caught with their hands in the till don’t always end up arrested or imprisoned or pardoned. The South Korean shame culture leads some of them to take their lives. You might wonder why, if the shame culture is a powerful enough psychological phenomenon to drive these people to suicide, it doesn’t keep them from bribing and embezzling and so on in the first place. But that question is perhaps beyond the scope of this blog.

Chung Mong-hun

Here are a few examples of high-level South Korean self-slaughter. On August 4, 2003, Chung Mong-hun, the chairman of Hyundai and the son of its founder, jumped to his death from his 12th-floor office window. As the New York Times put it, Hyundai was South Korea’s “economic ambassador to the Communist North”; Chung had played a key role in arranging an historic summit in June 2000 between Kim Jong Il and South Korean president Kim Dae Jung. Afterward, however, South Korean auditors looked into the behind-the-scenes dealings relating to the summit and found that Chung had illegally paid a massive bribe to Pyongyang. He was about to be arrested for this crime when he chose to take the leap from his office window.

Roh Moo-hyun

On May 23, 2009, Roh Moo-hyun, who had served as president of South Korea from 2003 to 2008, killed himself by jumping off a cliff near his home. He had been under investigation for accepting $6 million in bribes from the business sector during his presidency. He had already been interrogated, and his wife was scheduled for questioning by investigators on the day of his death. He had already said that he “was losing face and that he was disappointing his supporters”; in a suicide note, he wrote: “nothing is left in my life but to be a burden to others….Don’t be too sad. Aren’t life and death both a piece of nature? Don’t be sorry. Don’t blame anyone. It is fate.”

Lee In-won


Two years ago it was Lee In-won’s turn. Lee, the #2 man at the Lotte Group, which at the time was South Korea’s fifth largest conglomerate, when he was
found dead in August 2016 beside a walking and cycling path near Seoul; he had hanged himself from a tree with his necktie. Lee, age 69, had spent 43 years at Lotte, where he was the highest ranking official not belonging to the conglomerate’s ruling Shin family. His suicide took place two months after police – tipped off about crooked deals among Lotte subsidiaries that led to the formation of a slush fund – raided the firm’s offices in search of evidence of those crooked deals. At the time of Lee’s suicide, he was scheduled to be grilled by prosecutors about these irregularities.

Lotte has less of an international profile than other major chaebols such as Samsung and Hyundai because its wealth is derived not from high-tech products exported around the world but primarily from apartment buildings, hotels, malls, cinemas, fast-food restaurants, and other such busineses in South Korea. It has about 80 subsidiaries and over 300,000 employees. The New York Times reported that Lee “was one of the professional executives commonly known in South Korea as vassals, for their loyalty to the families that control the business empires. These executives rarely betray their bosses during corruption investigations.”

Another chaebol tale

In what country do the heads of the top half dozen or so corporations get arrested for corruption, found guilty, sent to prison, and then pardoned more often than in South Korea? The answer must be: none.

Chey Tae-won

Case in point: Chey Tae-won, chairman of SK Group, one of the half dozen largest of South Korea’s chaebols, the family-run conglomerates that dominate that country’s economy and whose leaders are part of an intricate network of power that ties them inextricably to the people at the very highest levels of government. In 1988, as if to demonstrate this high-level intimacy, Chey, who was the nephew of SK’s founder, married Soh Yeong Roh, the daughter of South Korea’s then president, Roh Tae-woo. The wedding took place at the Blue House, Seoul’s answer to the White House.

Five years later, in 1993, Chey was found guilty in a California court of breaking U.S. money laundering laws and of “smurfing,” which means “breaking up deposits into smaller amounts to avoid reporting cash transactions of $10,000 or more as required by law.”

Roh Moo-hyun

That was just the start. Ten years later, on February 23, 2003, Chey was arrested in South Korea on charges of insider trading. The arrest came only days before the inauguration of President Roh Moo Hyun, who, like many other South Korean presidents before and after, had declared his intention to reform the chaebols – which, while being credited with turning South Korea from a Third World country to a leading economic powerhouse, are also cesspools of high-level corruption. Among the 2003 charges against Chey was that he had plotted to increase his ownership share in SK by nefarious means and thereby to solidify his control of the conglomerate, which at the time consisted of no fewer than 58 separate firms. That June, after prosecutors uncovered $1.3 billion in accounting irregularities, Chey was sentenced to three years in prison.

Soh Yeong Roh


Once a crook, always a crook. In January 2012, Chey was indicted for embezzling over $40 million, which he sunk into personal investments. A year later, having meanwhile resigned as chairman of SK Group (while remaining chairman of the conglomerate’s holding company, SK Holdings), he was found guilty and sentenced to four years in prison. “The ruling,”
reported Yahoo News, “comes as South Koreans demand a tougher stance on crimes committed by bosses of chaebol.” The Seoul court that sent him to jail described his case as an example of how chaebol bosses “treat company assets as personal property.”

Park Geun-hye

In any event, that “tougher stance” against the chaebols didn’t last long. It never does. President Park Geun-hye – who had passionately vowed to crack down on chaebol corruption, but who is now in prison herself for involvement in chaebol corruption – pardoned him in August 2015. In March of last year, prosecutors questioned Chey, who in the interim had resumed chairmanship of the SK Group, as part of their investigation into President Park.

“To many investors,” the Seoul Herald commented a couple of years ago, Chey “seems to embody what’s wrong with Korea’s chaebol-controlling families.” Well, South Koreans are very big on two things: family and continuity. It could be argued that Chey, by retaining the respect of his clan and hanging on to control of SK no matter how many terms he serves behind bars, embodies those values, too.

A chaebol tale

Recently, we’ve been spending a lot of time here covering the chaebols, those economy-driving but corruption-ridden conglomerates that pulled South Korea out of the Third World but are now keeping its economy from shifting into even higher gear. Regular readers of this site will know that the current government in Seoul claims to be making serious efforts to reform the chaebols – but that so far there has been more big talk on this front than productive action.

Daddy Chung

As part of our attempt to educate our readers about this topic, we thought it might be advisable to take a look at some highlights of chaebol history. Today we’ll be harkening back to 2006, when Chung Mong Koo, the head of Hyundai Motor, the second largest chaebol in South Korea and (at the time) the seventh-largest carmaker in the world, and son of the man who had founded it in 1947, was arrested on charges of embezzlement and other forms of corruption.

The sum he had purportedly stolen from Hyundai was no less than 100 billion won, or $106 million. He was also accused of breach of trust for supposedly having incurred over 300 billion won, or $318 billion, in damages to the conglomerate. Moreover, government investigators had apparently uncovered evidence of “slush funds, compliant corporate boards and questionable arrangements involving affiliates that were set up to help Mr. Chung turn over the conglomerate to his son, Chung Eui Sun.”

Sonny Chung

Chung was the most powerful businessman in the country to have been arrested in a long time, and if found guilty of all charges he faced a possible life sentence. Except, of course, that he didn’t really face any such thing. The story of Chung’s brush with the law – he was sixty-eight at the time – ended up falling into the usual South Korean pattern, which can be represented by the formula A-I-R. A: arrest. I: imprisonment. R: release. Sometimes there’s a trial, and sometimes even a sentencing; sometimes these guys are pardoned before a trial can even be arranged or before a sentence can be handed down.

Chung had a trial. In February 2007, he was sentenced to three years in jail. (By this time, interestingly enough, Hyundai was being identified as the world’s sixth-largest carmaker.) The prison term came as a surprise: prosecutors had asked for six months, and it had been expected that Chung would get a suspended sentence. Certainly Chung seemed to expect that. In court, he “appeared shaken after the verdict.” He was, however, allowed to go home, prepared his appeal, and keep running Hyundai.

Hyundai headquarters, Seoul

Sure enough, as it happened, Chung stayed home. In September 2007, a three-judge panel of the Seoul High Court suspended Chung’s three-year sentence. The court’s explanation for this suspension was surprisingly frank. Presiding Judge Lee Jae-hong said that he had struggled with the decision, and had “sought the views of various people, including other judges, prosecutors, lawyers, journalists and ‘even taxi drivers and restaurant employees.’” In the end, he claimed, national interest had won the day: Chung was simply too important to South Korea’s economy not to have to go to jail. “I am also a citizen of the Republic of Korea,” he told the courtroom. “I was unwilling to engage in a gamble that would put the nation’s economy at risk.”

In a way, it was a refreshing admission. There was not the slightest pretense that the South Korean judiciary offers anything resembling equal justice for the rich and poor. No, Lee’s statement amounted to a candid acknowledgment that in South Korea, the chaebols do indeed rule.

What the hell is wrong with the chaebols?

Samsung headquarters, Seoul

We’ve been writing a good deal lately about the chaebols, those immense, influential, and staggeringly corrupt family-run conglomerates (think Samsung, Hyundai, LG, and Daewoo) that have dominated the increasingly dynamic South Korean economy during the more than half century since the Korean War. In recent decades, one government after another has promised to tame them, but, as we’ve seen, their power has yet to be seriously diminished.

We’ve wondered: what is it about Korean culture and the Korean sensibility that made the chaebols possible in the first place? How have the same crooked families – who over the years have been caught giving and taking massive bribes and embezzling fortunes from their firms – been able to maintain absolute control of them from generation to generation?

Hyundai headquarters, Seoul

After all, in most cases, these families don’t even own anywhere near a majority of company stock. The clan that runs Samsung, for example, holds just over one percent of total shares in that firm; the family that holds the reins at Hyundai owns about one-thirtieth of it. Indeed, on average, the chaebol royal families own only about three percent of the conglomerates that they run with iron fists.

But that doesn’t matter. As South Korean observers have pointed out, there’s something in the Korean mentality, with its fixation on family, that makes it well-nigh impossible for most citizens to accept the idea that the shareholders in a firm are its actual owners; instead, they reflexively view the chaebol dynasties, however little stock in their own companies they may have in their portfolios, as the real owners.

LG headquarters, Seoul

Yes, the passing down of company management from one generation of a family to the next is a worldwide phenomenon. But family is an even bigger thing in South Korea than elsewhere. There are, as it happens, ancient religious roots – Confucian roots – to this way of thinking. It’s no exaggeration, in other words, to say that in Korea, the idea of family is swathed in a kind of reverence. Especially in a time of rapid transformation in social and cultural structures, family continuity is widely seen as providing needed continuity and even giving those structures a kind of legitimacy that they otherwise would lack. From one perspective, of course, this may be an admirable way of thinking. From another, however, it is a sensibility that can create all kinds of problems for a large twenty-first-century business operating on the international financial stage.

Daewoo headquarters, Seoul

For the fact is that the curious structure of the chaebols renders shareholders all but powerless. Their investments are at the mercy of top executives who have inherited their positions and who may or may not know what they’re doing in those jobs, which are, frankly, nothing more or less than sinecures. Virtually nothing can dislodge these dynastic figures from their perches – not manifest incompetence, not proven corruption, and not an established pattern of business decisions that are obviously meant to serve their own families’ interests rather than the interests of shareholders, workers, or the firms themselves. Yes, the South Korean government is supposedly pushing reforms. But they’re weak reforms, insufficient reforms, and the degree to which the government is pushing for them is, frankly, pathetic. One thing is clear: if there’s going to be anything close to genuine change at the chaebols, the shareholders need to raise their voices more loudly, assert the power that’s rightfully theirs, and demand that these conglomerates shake off their Confucian roots and fully join the modern world economy. 

One ex-prez down, several chaebol CEOs to go

Samsung headquarters, Seoul

In recent weeks, we’ve been reporting – with a good degree of skepticism – on claims by the South Korean government that it’s engaged in a serious, vigorous, and comprehensive effort to curb the power of the nation’s largest capitalist monopolies. We’re referring, of course, to the chaebols, those massive, family-run conglomerates (including Samsung, Hyundai, and LG) that have dominated the South Korean economy over the last half century and more – so much so, indeed, that they routinely kill potential competitors in the womb and thus (as has been increasingly recognized and resented) stifle economic growth, discourage entrepreneurship, and squelch innovation.

Jay Y. Lee

Our skepticism on this front has been undergirded by such events as the sudden and unexpected release from prison, earlier this year, of Jay Y. Lee (Lee Jae-yong), the vice chairman and de facto head of Samsung (and arguably his country’s most powerful figure), after serving only a few months of a five-year sentence for corruption.

As if his release weren’t disappointing enough, Lee has since been invited by President Moon Jae-in, who poses as an anti-corruption warrior, to accompany him and a group of other chaebol bosses on a flight to Pyongyang, where they all explored possible business ties with the fanatically totalitarian, slave-labor-dependent Kim regime. Some reform!  

Lee Myung-bak

Well, there’s news from the supposed chaebol wars. No, a chaebol bigwig hasn’t been tossed in the clink. But another nabob has. On October 5, seventy-six-year-old Lee Myung-bak, who was President of South Korea from 2008 to 2013, was jailed for corruption. Arrested on March 22, he had been charged with receiving hefty bribes from Samsung and other firms, embezzling funds from the government treasury that had been appropriated for use by the nation’s intelligence services, and embezzling $21 million from an auto parts company that he owned through his brother. His sentence: fifteen years behind bars plus a $16 million fine.

Park Geun-hye

He’s not the only former president of South Korea who is currently serving time for corruption. His successor, Park Geun-hye, is six months into a thirty-three-year sentence. Two other South Korean presidents, as it happens, have also spent time in the slammer: Chun Doo-hwan, who held the high office from 1980 to 1988, and Roh Tae-woo, who succeeded Chun in 1988-93, were both convicted of bribery and sedition in 1996, and both were pardoned a year later.

Kim Sang-jo

If there is anything resembling reform underway in South Korea today, it may consist in the fact that corrupt presidents are now more likely to serve out their terms instead of being pardoned after a brief period of incarceration. But of course it remains to be seen whether Park and Lee are in the can for the duration or whether, like Chun and Roh, they’ll get sprung after the headlines die down. In the meantime, the self-styled “chaebol sniper,” Fair Trade Commissioner Kim Sang-jo, has yet to prove that he’s prepared to be as tough on current chaebol leaders as on the former presidents – who are, after all, being put away for engaging in illegal shenanigans with those very leaders.

“Chaebol sniper” or chaebol masseur?

 

Kim Sang-jo

Last January, the Economist offered an optimistic forecast of the future of South Korea’s economy under Kim Sang-jo, that country’s newly appointed antitrust czar. Kim’s task, during his three-year term, was to “tame the chaebol,” those massive, family-run corporate conglomerates that were the engines of South Korean economic growth after since the Korean War but that in recently decades have increasingly served as a hindrance to further growth – and, in particular, to the establishment and successful development of small businesses. (The Korean language even has a word – gapjil – for the way in which the chaebol bully more modest-sized enterprises.) Moreover, the chaebols, which were once universally admired for having led South Korea out of Third World status, are now more and more the objects of public resentment because of their top leaders’ chronic corruption and impunity.

Moon Jae-in

At the time of his appointment, Kim, a former activist for the rights of shareholders, enjoyed the strong backing of President Moon Jae-in as well as of the great majority of his countrymen, who refer to him as the “chaebol sniper.” All these months later, has he lived up to that nickname? How much, exactly, has he accomplished?

For a close reader, the article in the Economist contained a few hints that Kim might, in fact, prove to be something less than a bull in the chaebols’ china shops. “The sniper,” we read, “would rather his targets surrender willingly and is encouraging ‘voluntary’ reform.” Some sniper! Indeed, the Economist admitted that some critics of the chaebols “carp that Mr Kim now seems to be more chaebol sympathiser than sniper,” though the Economist was quick to assure us that this view of Kim was “unfair.”

Hanjin Group headquarters, Seoul

Fast forward five months. Kim, reported the Korean media, was accusing the Hanjin Group, the parent company of Korean Air, of “breaching market rules.” At a press conference marking the end of his first year on the job, the “chaebol sniper” lamented the standard practice by chaebols of doing business with, say, real-estate firms and ad agencies that are affiliated with them rather than dealing with independently owned firms in those same sectors. “I honestly ask conglomerates,” said Kim, “to sincerely review if it necessarily needs these businesses that are owned solely by their controlling families.”

Wow, tough talk!

Samsung headquarters, Seoul

Kim said his agency had “tried to work on encouraging conglomerates to change their…management practices.” Tried? Encouraging? “We’re seeing positive changes,” he said, but “we still have a long way to go.” He said he regretted “not being able to bring changes that the public can actually feel,” and admitted that some observers might feel that his achievements thus far had fallen “short of expectations.”

No kidding. Is this a sniper or a masseur?

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.