Korean Trasparency Watch

Note: Sorry for problems in the orginal post my WiFi cut out and I could not correct in ti-

The past year or so I have been watching with a mixture of interest and amusement at the various anti-corruption drives and the growth of “transparency” as a Konglish word meaning…well nobody really knows it what it means it seems it just looks good on paper much like “ubiquitous” or “paradigm”.

In the past couple weeks though the whole effort (well-meaning or hollow) appears to have been for naught. It started with the rather landmark conviction of Hyundai Motors chairman Chung Mong-koo on corruption charges. Chung was convicted of stealing around US$100 million from his betrayed shareholders and further destroying around US$225 million in losses by manipulating ownership structures, stealing shareholder’s value, and general accounting chicanery.

So what was the penalty? Well first let’s take a walk down memory lane. I was immediately struck with the case Dennis Kozlowski the former chairman of Tyco International. Remember him? He was convicted of causing US$400 million in damages by, like Chung, breaching the trust placed in him by the company’s shareholders (and I mean ALL the company shareholders, not just him and his family). What happened to Dennis? He is currently serving AT LEAST eight years of time behind bars. And that does not equal the ultimate punishment in this case, Dennis will likely be unable to even manage a kid’s lemonade stand after all this.

So what happened to Chung? Well first, he is far from a orange jumpsuit. He is out of jail while the case is appealed. Sure he official got three years but, as this Joongang piece on the story points out, chances are he will get a suspended sentence. Heck, Chung did not even get the obligatory “Do not leave the country” instruction every one normally gets, even for comparatively minor matters.

Now I know can be said about this disconnect between Dennis and Mong-koo. But what gets me is the statements in the court’s decision. Give me some license to rearrange some of the quotes the aforementioned Joongang article to make my point:

The presiding judge in the case, Kim Dong-oh, had strong words for Mr. Chung. “The accused clearly violated the law by secretly forming a large-scale fund over a long period of time and using the money for illegal purposes,” Mr. Kim said. “In order to put an end to these improper management practices and allow our economy to reach an advanced stage, the court must hold the accused heavily accountable.”

The court, however, said it favorably considered Mr. Chung’s contributions to the nation’s economy and social welfare, as well as his offering of 70 billion won in cash and stocks to redeem the affiliates’ losses….the Seoul Central District Court said Mr. Chung will not be immediately detained in order to “guarantee his right to a defense and minimize the impact on the nation’s economy.”

Again, lets put this together. This is a man who, buy the courts own words, “clearly violated the law by secretly forming a large-scale fund over a long period of time and using the money for illegal purposes” and uses “improper management practices and allow our economy to reach an advanced stage”. Yet, again by the courts own words, should be free to continue is duties to “minimize the impact on the nation’s economy.”

Am I the only one scratching my head how allowing a man who prevents “our economy [from] reaching an advanced stage” freely go about his duties as chairman of one of the largest Korean companies somehow “minimize the impact on the nation’s economy.”?

Again poor Dennis has a life convincing the warden he can be put in charge of a prison library card, while Mong-koo resumes his life at Hyundai. Who do you feel the biggest glimmer of pity for? Well you will be glad to know that you disagree with President Roh Moo-hyun again:

In Spain yesterday, President Roh Moo-hyun sounded sympathetic to Mr. Chung, telling a Hyundai executive that he was “paying a great deal of attention” to the case, even though “there is nothing a president can do about that.”

Mr. Roh met Kim Yong-hwan, a vice president of Kia Motors, a Hyundai Motor subsidiary, at a trade exhibition in Madrid, where he commiserated with Mr. Kim. “You must be very concerned about your chairman,” the president said.

Of course this is nothing new. Business men, or more appropriately big business men, regularly get pardoned by the Korean government for their corruption and malfeasance. In fact the practice is so strong that last year the Uri party head used promises of such to gain political capital. So anyway, as a result every few months when an a “holiday amnesty” comes along a system that was likely once to excuse petty and impoverished criminals is bastardized to free Korea’s versions of Dennis Kowlozski (and most of them are already walking the streets, not holding on tightly the soap).

This recent amnesty (and my final item) is no exception (again some rearranging):

President Roh Moo-hyun will pardon 434 persons on Monday including 160 businessmen and 223 violators of election laws.
…
“The country was hit by a financial crisis 10 years ago with many companies going under and a large number of businessmen were convicted of irregularities. We have now recovered from the troubled times and its time for the businessmen to be given a second chance to contribute to the economy,” said Justice Minister Kim Sung-ho in a news conference.

So the want to spin this all as a “fresh start” after the “bad old days” before the Asian Currency crisis. OK fair enough, and I can understand. However how come one of the notables was Doosan chair Park Yong-song who was only convicted last year for embezzlement that happened mostly AFTER the crisis.

Again somebody please tell me why Korea always wonders why the “Korean Discount” exits?