A ship starts to sink

Hong Ky-tack, an economics professor recruited for the presidential transition team in 2013, was bold for a scholar. That may be why President Park Geun-hye kept him on her crew after she was sworn in.

Hong had tutored Park on economic affairs during her first bid for the presidency in 2007. When he landed the top job at the state-run Korea Development Bank (KDB) in 2013 and faced a parliamentary hearing for the first time in his new position, he endured sneers from opposition members about a “parachute” job. He calmly retorted that he did not have any liabilities because he landed with a parachute.
When they pressed on about his admission that he was a golden parachute appointment, Hong snapped back that he didn’t have to reply. Chuckles were heard in the hearing room. Hong played on the idea of his being a parachute appointment.

“Yes, I am a parachute case. But what should be important is whether I make a successful parachute case or not,” he said. Hong served three years in the position and was recruited as a vice president of the China-led Asian Infrastructure Investment Bank.
He, of course, had the president to thank for pitching him.

Hong was as frank and straightforward in his whistle-blowing comments to a local media outlet. He confessed that he had been called into a meeting at the presidential office in October 2015 and heard a government decision delivered by then-Deputy Prime Minister for the Economy Choi Kyung-hwan, Senior Presidential Secretary for the Economy Ahn Chong-bum and Financial Services Commission Chairman Yim Jong-yong to have the KDB give a bailout package of 4.2 trillion won ($3.6 billion) to the troubled Daewoo Shipbuilding & Marine Engineering (DSME).

Hong claimed the state-run bank was told what to do, and that it was the president’s top economic policy makers — Choi and Ahn — who had decided on an additional bailout for DSME.

Ahn had full control over the administration and Choi over the ruling party and politics. They wielded enormous power because of the president’s confidence in them. If they are hit, the blow also reaches the president. Whistle-blowing can be particularly explosive when the person blowing the whistle was in the inner circle of power in an organization. Yim tried to defuse the bombshell thrown by Hong. Choi and Ahn kept to the sidelines. “It was up to the KDB to make management and fund decisions,” Yim said. “Coordination with the government was essential, and I did the mediating role.”

In other words, Yim refuted Hong’s accusation that the KDB was merely following orders. Both might be telling the truth. Senior policy makers had discussed the issue of a new bailout package with the KDB, and Hong might have been left out of the decision-making. He could have felt he was not an inner circle member while sitting in the meeting at the presidential office.

Hong wanted to be a successful parachute case, but he might have realized the limitations of an outsider in the bureaucratic and political community.

One cannot know where a bomb will explode in an administration in its final years in power. Hong’s mea culpa was dropped when the president was attempting an all-out breakthrough in a political impasse following the ruling party’s crushing defeat in the April 13 general election, as evidenced by the Saenuri Party yielding the Assembly speaker seat to the Minjoo Party.

At the same time, Park replaced her senior secretary for political affairs, declared a government-led corporate restructuring with a fund of up to 12 trillion won and launched a prosecution probe into mismanagement at DSME and KDB.

It was the typical case of a crew deserting a sinking ship. There were others before Hong. Cho Eung-cheon — the former presidential secretary for civil service discipline accused of leaking confidential presidential reports — was elected a lawmaker by shifting allegiance to the Minjoo Party. Another dishonored former director of human resources at the National Intelligence Service, Kim Byung-ki, moved to the Minjoo Party earlier.

A ruling power in its final days crumbles easily. It can only be sustained if the public has confidence in the president. In short, the captain is in sole charge of the ship’s final destination.

JoongAng Ilbo, June 10, Page 30

*The author is an editorial writer for the JoongAng Ilbo.

Chun Young-gi