The prosecution has failed to meet public expectations in its investigation of a corruption-ridden community bank. It cannot deflect criticism for its inability to lay bare the bank’s alleged dark connections to regulators, bureaucrats and politicians.
Forty-two former and present CEOs and managers of Busan Savings Bank were indicted for appropriating over 9 trillion won in illegal loans, accounting fraud and embezzlement. In addition, 34 regulators, officials and politicians face charges of taking bribes from the bank in return for business favors and influence peddling.
However, we have to question whether prosecutors have conducted a thorough investigation into one of the ugliest financial scandals in Korea. They has brought charges against a former presidential secretary, a state auditor, the financial intelligence chief and other ranking officials implicated in the case.
But, it is apparent that prosecutors could not dig deeper into the scandal to confirm allegations that higher-ups might have been deeply involved in the scam. Doubts are growing that investigators might have tried to cover up the case to protect the inner circle of political power.
If such allegations are true, South Korea will have no future as it is devoid of the rule of law. The government has vowed to wage a war on corruption since the Asian financial crisis hit the country in 1997-98. The embedded cause of the woes was the incestuous relations among bankers, businessmen, bureaucrats and politicians.
The savings-bank case shows that the nation cannot win the anticorruption war. It is regrettable that policymakers have talked too much but done little to make Korea a clean and transparent society. They have shouted an empty slogan of ushering in a fair society. In a nutshell, little has changed despite the unprecedented crisis that forced the country to go cap in hand to the International Monetary Fund 14 years ago.
Koreans must have easily and quickly forgotten the painful but valuable lesson from the Asian turbulence. Officials claim that the nation has strengthened the prudential regulatory mechanism to ensure the survival of banks and other financial firms and improve their competitiveness. But the system has not worked even for community banks, far smaller than commercial banks.
Busan and other suspended savings banks have acted like casinos to rake in customers’ money to fatten the pockets of shareholders. They have also bribed regulators and bureaucrats into conniving in their irregularities. The scandal may provide a last chance for Korea to break these corrupt ties and end the casino banking for greedy financiers.