[Viewpoint] A society stricken with money envelopes

Park Tae-joon, the former chairman of Posco, purchased his residence in Bukahyeon-dong with the undisclosed amount of gift money from President Park Chung Hee. Former security commander Kang Chang-seong also received money from President Park. They couldn’t have been able to afford a house with their salaries, unless they were corrupt and received bribes.

They are not the only ones to buy houses with the gift money from President Park. Hwang Byunng-tai, former ambassador to Beijing, wrote in his book, “Park Chung Hee Paradigm” that President Park sent him to Washington for an extended period to pressure the U.S. government to promise economic aids. With the money received from President Park, he could stay in a respectable hotel and invite guests to nice restaurants. It wouldn’t have been possible with the usual business trip expenses he could charge.

The gift of money was an indispensable element of Park Chung Hee’s management and administration style. It wouldn’t be an exaggeration to say that he controlled people and state with money. Also, everyone who worked for President Chun Doo Hwan received money. Not just the aids but also social leaders in various fields had received money directly or through his aids, and military commanders, ruling party officials and government officials were delivered an envelope frequently.

President Roh Tae-woo wrote in his memoir that he did not intend to receive money from companies, but once he became the president, but he had to give money to so many people. By the Roh Moo-hyun administration, the custom of gift money was completely eradicated. I had worked in the Blue House for the first two years of the administration, and I had never received or delivered a cash envelope, and other secretaries had not handled cash under the table either.

The basic engine that moves a society is the reward system. The reward system determines the flow of the talented people in the society and changes the passion and loyalty to tasks. Competent people would sign up for jobs with greater rewards, and handsome rewards would guarantee devotion and concentration.

However, backward societies have less than transparent reward system. The system that is visible on the surface is different from the actual rewards. The corruption becomes serious and universal application of the law is not possible. Those who are punished by the law feel that they are just unlucky. When it comes to the reward system, Korea is still rather backward, as considerable parts of rewards are still invisible.

Many citizens hope that the party reform and prosecutor’s investigation would end the practice of shadowy money deals. The cash envelope is deeply rooted in the Korean society, and to change it, we need an overall system reform. Many believe that the cash envelopes are the lubricants that make the society run smoothly.

Those who praise Park Chung Hee’s management style and deride Roh Moo-hyun’s amateurism never associate the cash gift with the vices of close tie between politics and business and the private exploitation of public interests. However, everything in life has two sides, and if you focus only on one side, you can’t evaluate it properly or come up with the right answer.

The practice of cash envelopes is against the flow of globalization and democracy. However, it cannot be eradicated with a one-time campaign. The law on political funds, political party organization and operation, the compensation for public officials and overall political system need to be reformed. Without the stash of cash, political parties should be able to operate, the party and the government may collaborate smoothly and the public servants could enjoy the life they deserve.

In Korea’s bureaucratic system, a minister is paid less than a director at a large conglomerate. As a public servant who devotes over 30 years to implement national policies, it is not right for the state to demand sacrifice in personal and family life while demanding loyalty at the same time. They are open to temptation of corruption, and receiving cash gift is often tolerated with a tacit approval.

In the past, the president himself monopolized corruption by raising money from companies and distributing to officials and party members to give substantial rewards and induce loyalty. After this practice disappeared, public servants in the government are exposed to direct bribe attempts from the private companies and agencies, attorneys and sponsors. A society where the public servants work according to private interests rather than national interests is more dangerous and corrupt than a society driven by cash handed over by the president.

In order to eradicate the practice of cash envelopes, we need to start from changing unrealistic and irrational system. And then corruption should be punished strictly. When the politicians truly want reform, they should courageously propose realistic and detailed plan for overall national reform instead of distributing photos of them on their knees. Even if it means more burdens on the taxpayers, it would be better to have the politicians and civil servants work for the citizens rather than let them work for the interests of businesses and people with money.

Translation by the Korea JoongAng Daily staff.

*The author is a professor of economics at Sogang University.

by Cho Yoon-jae