The bribery scandal exposed by the suicide of Sung Wan-jong, former head of Keangnam Enterprises, underscores how collusion between business and politics can wreck havoc on an entire nation. Through riches built on connections and payoffs, Sung won a legislator’s seat and gained authority over tax and financial authorities. Large banks had to funnel loans to his company. They can now be repaid 20 percent at best. Sung enjoyed such favoritism because he was a lawmaker for the ruling party and also a member of the National Assembly’s National Policy Committee, which oversees financial affairs.
Shady deals and suspicious connections between politicians and businessmen are hidden everywhere in the legislature. H&N Steel has seen revenue double and net profit jump 15 times over the last three years since its major shareholder, Joo Young-soo, won a lawmaker’s seat under the ruling Saenuri Party. The company has enjoyed an exceptional performance when all other steelmakers have been in the dumps after steel prices fell from 2011.
Easter Jet, a low-cost airline at which New Politics Alliance for Democracy Representative Lee Sang-jik served as chairman, also saw revenue double and its losses turn to profit. During his service, Lee made comments advocating for business interests in Saemangeum and Gunsan in North Jeolla that could benefit Easter and related companies.
Joo also has been suspected of looking out for H&N Steel while he served on the National Assembly’s Environment and Labor Committee for the last three years.
Both claim to have sold off their stakes and left management. But it was discovered that their relatives were heading the companies on their behalf. The stakes they claimed to have sold off are still theirs. A public official must not own more than 30 million won worth of shares related to his or her work. But there is a loophole. The shares can be kept in trust. Seven lawmakers have used the loophole to hold onto shares while serving on legislative committees that can influence the companies they hold interests in. There are many ways to use their power to help those companies. This is exactly the way Sung kept his company alive.
Lawmakers promise to root out corruption whenever a scandal erupts. They collude in putting loopholes into well-intentioned laws. That is why a conflict of interest clause and ban on lawmakers holding shares in trust were dropped from the recently passed graft law. You can call our lawmakers anything you want except subtle.
JoongAng Ilbo, April 28, Page 30