Tuesday, October 18, 2011

South Koreans Grow Impatient Over Corruption

President Lee Myung-bak faces an increasingly hostile public

When South Korean President Lee Myung-bak arrives home from his successful trip to the US, having won congressional ratification of a free trade pact with Washington, he won’t be welcomed as nearly warmly as he was at the White House.

Lee has been busy forging an image as a globe-trotting statesman, visiting 14 countries and holding 38 summit meetings. But while South Korea’s status as an increasingly important American ally and global player was acknowledged by Lee’s five-star US reception, back home Lee is regarded less as the shrewd leader of a prosperous nation and more as the face of a crisis of corruption. The president and some close associates have recently been implicated in a series of scandals.

Despite more than two decades of vigorous democracy, corruption among elites remains an old problem in South Korea. That is gaining steam as a public issue as patience fades over the excesses of the elite. Beneath the surface of South Korea’s apparently successful society is rising inequality, there are now huge gaps between the highest and lowest earners. The Gini coefficient, which ranks countries by income inequality between rich and poor, ranks South Korea 107th in the world.

A procession of scandals has implicated other officials close to the president. Kim Du-woo resigned in mid-September from his position as public affairs aide after being implicated in a scandal involving Busan Savings Bank, which allegedly paid off government officials to avoid suspension due to insufficient liquidity. The suspensions of other savings banks gained national attention earlier this year as customers staged sit-ins while unable to withdraw money.

A recent study by opposition Democratic Party lawmaker Park Woo-soon has shown that more than 80 percent of public officials undergoing National Assembly personnel hearings have been involved in illicit practices related to real estate speculation, military service evasion, kickbacks and plagiarism but only 9 percent were withdrawn by President Lee in the face of the charges.

Prosecutors are seeking a warrant for the arrest of Shin Jae-min, ex-vice minister and a close confidant to the president. Shin is alleged to have accepted illicit funds from SLS Group Chairman Lee Kuk-chul. While Shin has admitted to accepting money, he denies providing Lee’s business ventures with any special treatment.

On October 9 President Lee himself came under personal criticism from Hankyoreh, an independent newspaper, when the Blue House, announced plans to buy a large and expensive property for Lee retirement residence. He is suspected of embezzling state funds for the purchase, along with illegal inheritance transfer and tax evasion. The real estate was purchased in his son's name, possibly to evade taxes. He planned to spend W1.12 ($975,313) billion for the posh complex in southern Seoul. In a separate transaction, the national government spent W4.28 billion ($3,727,658) on a 2.143 sq. m plot meant for security quarters. The entire complex is 2,606 sq. m, far bigger than previous presidents’ retirement residences.

Apparently stung by the criticism, Lee was reported by the Yonhap News Agency on Oct. 17 to be foregoing the purchase and retiring to his old home after his plans caused such a stir at a sensitive time. This may be a sign that the elite may be more careful with its dealings.

Corruption is nothing new in South Korea. The country was founded as a dictatorship and its politics have historically featured battles against authoritarian instincts. President Lee has pledged more than once to be the leader who could finally end corruption but has accomplished little.

Until the recent about-face on the issue of the retirement home, the official response to alarming levels of corruption in South Korea had been a colorful set of doublespeak. In a radio address in June, Lee called corruption, “rampant not only among financial regulators but also in other parts of society, ranging from the judiciary, tax authorities and military through to the civil service.” Then, on September 29, President Lee confused everyone by describing his administration as “morally perfect.”

At the same time, Lee claimed that his government came to power in a fair election. Around the time of the election, he was in the midst of a scandal concerning BBK, an asset management firm run by Kim Kyung-jun, a Korean-American who fled to the U.S after being charged with stock price manipulation and embezzlement by South Korea’s Supreme Prosecutors Office. Lee was alleged to have used his profile to bring investors to the firm. Lee and his associates requested a suspension of Kim’s repatriation to South Korea, possibly to prevent a trial and sweep the issue under the rug.

Under South Korean law, the president cannot be subject to criminal investigation, but there are private murmurs that he may be formally investigated and possibly put on trial after his term ends. He wouldn’t be the first. Both Presidents Chun Doo-hwan and Roh Tae-woo were jailed after leaving office. For reasons other than partisanship, Lee should thus hope his incumbent Grand National Party triumphs in next year’s presidential elections. Members of the Democratic Party could reopen the BBK case and push for a thorough investigation of Lee’s activities during his time in office.

Anger over corruption is gaining traction to the point where both the left and right ends of the South Korean political spectrum are voicing disapproval. Even the country’s big conservative papers, such as the Chosun Daily are running articles criticizing corrupt officials. On October 15, Seoul’s financial district was the site of protests inspired by the Occupy Wall Street movement.

South Korean officials are notoriously concerned with how their country is perceived abroad and wish to be recognized as a fully developed country. That probably won’t happen until the issue of corruption is seriously addressed and the old-boys-club nature of South Korean government and business evolves into something fairer and more transparent. Written by Steven Borowiec
For Asia Sentinel

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