Welcome back, corruption!I recently received a call from an entrepreneur who started out in business during the early industrialization period after the war. He lost that business in the massive restructuring of the economy in the wake of the Asian financial crisis in the late 1990s. After exchanging greetings, he asked me about the snowballing scandal triggered by the suicide of a businessman who was being investigated for corruption - and who made corruption allegations of his own about political heavyweights around the president before he took his own life earlier this month.
After listening to the background of the story, he grumbled in disapproval and added that he could not understand what all the fuss was about considering that the payoffs being talked about were pretty small beans. “Were they bigger in the old days?” I inquired. He avoided a direct answer, muttering that he wouldn’t know since his company didn’t make it because he did not pay off politicians. Many business owners who lost companies after the financial crisis in 1997 made similar complaints that they went bust because they had not paid the right people off or had been late in doing so.
Businessmen believed their businesses would flourish once they paid their dues - in cash - to politicians. Illicit slush funds prosecutors pried out of former presidents Chun Doo Hwan and Roh Tae-woo amounted to 950 billion won ($878.5 million) for Chun and 450 billion won for Roh. A truckload of cash amounting to 15 billion won was sent to the Grand National Party (now Saenuri Party) during the 2002 presidential election. That practice, which was believed to have been stamped out, proved to be alive and well by the allegations voiced by Sung Wan-jong, former chairman of Keangnam Enterprises, before he hanged himself this month. We will have to wait for the outcome of the prosecutors’ investigation, but people already seem to know the ending.
When a court asked former president Chun why he took so much money from companies, he said he did it to ease the anxiety of entrepreneurs. He said businessmen liked to feel they were contributing to political stability by offering funds. The owners of chaebol said they provided the funds out of longstanding custom. In an off-the-record conversation, a business owner said businessmen would shake hands with the devil in order to make profit. That’s their vocation and their duty. A business usually would profit from paying off the government and lose if it didn’t. Political funding was part of corporate investment, he said. The equation became a norm for Korea’s intersecting corporate and political realms.
As a result, Korean companies flourished under state protection. Keangnam Enterprises is a typical marriage of convenience between the Korean political and business sectors. Keangnam incurred a net loss of 339.5 billion won in 2013. But still it was able to borrow loans of 1.3 trillion won. How? Sung was a National Assembly representative for the ruling party and a member of the assembly’s National Policy Committee. The heads of the Financial Services Commission and Financial Supervisory Board needed his support. Banks could not dare refuse his requests - for the sake of their money.
Sung’s example explains why legislators dropped the conflict of interest provision while passing the anti-graft law dubbed the Kim Young-ran law. Sung could never have become a member of the National Policy Committee had that provision been passed into law in his time. Company owners, meanwhile, blame themselves for having not done enough to stuff politicians’ pockets when their companies do poorly. They didn’t invest in enough pols.
Fed up with playing the fool before political bigwigs, entrepreneurs like Chung Ju-yung aspired to turn themselves into politicians. That is why Chung ran for president and many businessmen spent money to become lawmakers. To a businessman, there is no better business than politics. Again, Keangnam Enterprises was a model case. In the construction industry, 41.4 percent of the companies are zombie companies that survive entirely on financial credit.
What reporters know about the Sung scandal is the tip of the iceberg. A memo found in the pocket of a corpse dangling from a tree has made the prime minister step down and key presidential aides targets for a prosecution probe. Legislators are busy saying they did not receive any money from Sung even when no one is asking them. The opposition camp is also trembling over rumors that the probe could spread beyond the government. If this is the tip, we can’t even imagine what’s still below the waterline.
Every government promises to end business-political corruption. And every government has been tainted by a corruption scandal. We expected cleanliness from President Park Geun-hye’s administration, but it was just wishful thinking.
JoongAng Ilbo, April 22, Page 30
*The author is an editorial writer of the JoongAng Ilbo.
by Yang Sunny
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)