The other part of ending corruption

The Korea Times

The Korea Times

Opinion

Michael Breen

The other part of ending corruption

Posted : 2016-10-03 16:50

Updated : 2016-10-03 16:54

By Michael Breen

Under a tough new law which went into effect last week, the public official who demands cash and benefits may be jailed for up to three years. Similarly, the person who requests a favor of a public official could be put away for two years.

The Kim Young-ran Act, as it is known (after the Anticorruption and Civil Rights Commission head who wrote the first draft) is so tough that it even includes teachers and journalists, and their spouses, in its definition of "public official."

Given this scope, the new law represents a complete oil change for the engine driving Korea's economy and society.

Indeed, the impact is already apparent.

For example, restaurants in business districts have adjusted menus so that customers hosting politicians, journalists and officials have options under the 30,000 won-a-head limit as prescribed in the new law. Last week, with automakers no longer allowed to pay for their tickets, hotels and meals, the usual large contingent of Korean journalists at the annual Paris Motor Show was a no-show. On Thursday ― the day the law went into effect ― KT had a press conference at which the usual meal, beverages and gifts that reporters not only expect but sometimes rudely demand were notably missing. On hand were water and tissues ― bearing the company logo.

But, before we claim that corruption is in remission, we need to acknowledge that these immediate changes are simply the visible manifestation of caution on the part of businesses and that a relapse is still possible.

The reason for the caution is that the law is vague.

Companies are being cautious until it is clear how prosecutors will interpret the law and until their in-house lawyers have drafted guidelines to ensure compliance. If prosecutors signal that, for example, they will only prosecute journalists in extreme cases, it will allow for a return to the old ways.

This matter of vagueness does not apply just to this law. It such a general phenomenon that it appears deliberate ― as a way of granting bureaucrats, prosecutors and courts the greatest power possible to interpret the law.

It is important to recognize that this legal vagueness is the basis for power abuse.

Ask anyone who has had a run-in with prosecutors and they will tell you the attitude expressed is, "The law is what I say it is."

Ask any business person for an example of how the bureaucrats regulating their industry behave when resisted, and you will be shocked.

Here's one: when Lone Star Funds bought Korea Exchange Bank a few years ago, the American company decided not to buy the bank's card unit because it was worthless. Two weeks after the purchase, an official from the Financial Supervisory Service called and ordered Lone Star to save the card unit. Lone Star resisted, saying it had no responsibility because it had not bought the card unit. When the official threatened to make the bank's life so difficult that it would not be able to function, Lone Star relented. It spent tens of millions of dollars to rescue the card unit.

Very recently, I heard about a company that was being forced by a certain government ministry to do something that it was not legally required to do. When the company objected, the ministry official said that if it didn't agree, he would make sure their products failed government safety testing.

If you've ever wondered why with every single chaebol that gets into trouble, prosecutors uncover ― shock, horror! ― a slush fund, it's because of the law of evolution as applied to the Korean economy. With the corporate jungles policed by such a predatory bureaucracy, only the most cunning and ruthless companies survived.

While the Kim Young-ran law should go a long way to clean up gift-giving, it does not address this parallel issue of power abuse.

For that we need a law to deal with power abusers as the Kim Young-ran act deals with the givers and takers of gifts.

Only then can we expect a Korea that is corruption-free.

Michael Breen is the CEO of Insight Communications Consultants, a public relations company, and author of "The Koreans" and "Kim Jong-il: North Korea's Dear Leader."