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.
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.”
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.
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.”
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.