Tycoon's suicide highlights rampant corruption
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By Sah Dong-seok
A 55-word memo left by a construction tycoon who hanged himself on a mountain slope in Seoul last month has shaken Korea. The man, Sung Woan-jong, is a typical rags-to-riches businessman. An elementary school dropout, he started his business with only 1,000 won and later led a construction company with annual sales of over 1 trillion won.
In the memo, Sung listed the names of eight political heavyweights, including the incumbent prime minister, whom he alleged bribed. Hours before he was found dead on April 9, Sung said in a telephone interview with a vernacular paper that he gave 30 million won to Prime Minister Lee Wan-koo in 2013, when he was running for a by-election on the ruling party ticket. The premier denied Sung’s accusations but nevertheless resigned earlier this week.
In the interview, Sung, the former chairman of construction company Keangnam Enterprises, expressed a sense of betrayal, saying he had been ostracized by the eight people on the list, which shockingly include three former and incumbent presidential chiefs of staff, governing party bigwigs and governors. He asked for their help while facing imprisonment because of the prosecution’s investigation into overseas energy projects, but to no avail.
Before the 2007 presidential election, Sung claimed that he supported Park Geun-hye, then one of the main opposition Grand National Party’s two presidential contenders. He was elected as a lawmaker in the 19th general elections in 2012 on the ticket of the minor opposition Advancement and Unification Party in his hometown in South Chungcheong Province. He ultimately became a governing party legislator as his party merged with the GNP, the predecessor of the current ruling Saenuri Party, in the same year.
On top of that, Sung was well-known for having vast personal connections with politicians from various parties, which helped him expand his business. In 2000, he came under the spotlight in the construction industry by acquiring Keangnam Enterprises, a mid-sized building company that had been affiliated with the now defunct Daewoo Group.
It’s not difficult to see why he decided to become involved in politics ― he not only built relationships with politicians but also became a lawmaker himself. Considering that many Korean conglomerates built their empires based on collusive ties with politicians and bureaucrats, entrepreneurs like Sung would not hesitate to similarly develop such useful connections.
Corrupt ties between politicians and businesspeople are deeply rooted in Korea.
Park Chung-hee, the general-turned-president, created “political funds” by collecting commissions from loans introduced by businesses from abroad, and distributed the funds to both ruling and opposition politicians to appease them during his dictatorial rule. The slush funds created by his two successors ― Chun Doo-hwan and Roh Tae-woo ― reached 950 billion won and 450 billion won, respectively, according to the prosecution.
After the 2002 presidential election, the then opposition GNP apologized for receiving tens of billions of won in cash from conglomerates in another high-profile scandal.
There have been expectations for cleaner politics since the political funding law was revised in 2005, under the initiative of Oh Se-hoon, then an opposition lawmaker. The revised law bars corporate bodies and other organizations from making political donations. But Sung’s bribery list made the public realize that even after the revised law went into effect, shady deals between politicians and businesspeople remained.
Entrepreneurs have every reason to maintain amicable relationships with politicians. They often regard offering political funds, or more specifically bribes, as a prerequisite to successfully doing business in Korea, where influence-peddling still pays.
Keangnam Enterprises is a case in point. Last week, the Board of Audit and Inspection confirmed that in 2013, the Financial Supervisory Service put pressure on Shinhan Bank to give the building company privileges in its debt workout program. From 2012 to June 2014, Sung was a ruling party lawmaker who belonged to the legislature’s National Policy Committee, which has the authority to oversee financial regulators and banks.
The ill-fated tycoon might have felt a strong need for political connections because his business centers on construction, where such connections are more important than anything else. This might have also been what prompted him to become a lawmaker himself.
Needless to say, Korean lawmakers need money to practice politics. Because it’s illegal to receive political funds from corporations and other organizations, they, or at least honest lawmakers, have no other choice but to rely on small donations from individuals. The political funding law allows incumbent legislators to raise up to 150 million won a year (up to 300 million won in an election year).
But most of them run short of money even if their annual pay amounts to about 140 million won, so they are always vulnerable to financial offers by businesspeople.
Given that politics is like walking on a prison fence every day, it’s presumed that suspicious connections between politics and business are still rampant in Korea. Eliminating corruption completely won’t be easy in a society where collusive ties with those in power guarantee huge gains.
As things stand now, it’s all but impossible to measure how far and wide the prosecution’s probe into the bribery scandal will be. Hopefully, this incident will serve as a valuable opportunity for us to put an end to the country’s deep-seated corruption.
The writer is the executive editor of The Korea Times. Contact him at sahds@ktimes.com.