S. Korea's culture of corruption Money for favors: A spiraling political scandal that led to former President Roh Tae Woo's arrest also reveals complex social practices steeped in history.

Sun Journal

January 11, 1996|By LOS ANGELES TIMES

SEOUL, South Korea -- Jang Song Hyon is a master at swimming the treacherous seas of South Korea.

As a business consultant, he knows a $100 tip disguised as reimbursement for "transportation expenses" will buy goodwill from local journalists. He knows a 10 percent "commission" to doctors will help land sales for a client's pharmaceutical products. He generally counsels U.S. firms to offer ministry officials "scholarships" or gifts of office equipment instead of cash, to avoid violating U.S. laws against greasing individual palms.

"If you don't give money," Mr. Jang says, "competition is so keen you will lose your business."

In a small and personal way, Mr. Jang reflects the larger drama unfolding before a mesmerized South Korean audience: revelations of official corruption on a larger scale than anyone had previously imagined. Disclosures that former President Roh Tae Woo amassed a slush fund of $653 million, gathered partly by bribes and partly by "forced donations" from business tycoons, have rocked the nation.

The spiraling scandal led to the arrest in November of Mr. Roh -- the first former chief executive ever incarcerated. And it has cast a harsh spotlight on the murky, collusive relations between the nation's business and political elites.

But the scandal is also revealing complex social practices steeped in history, combined with modern political necessities and the imperatives of South Korea's phenomenal economic growth. Despite significant gains made by President Kim Young Sam's aggressive clean-government campaign, many here say the problem will take even greater changes in mind-set, mores and laws to thoroughly eradicate South Korea's culture of corruption.

"Until now, we've tried to solve this problem by arresting some politicians or using a private moral approach, but that is not the fundamental solution," says Cho Gab Je, editor of the Monthly Chosun, a magazine published by Korea's largest newspaper, the Chosun.

"The system is a result of traditional Confucianism and a very shallow history of modern law enforcement."

However much Mr. Roh's avarice is criticized, the system of money for favors was systematized more than three decades ago by the late President Park Chung Hee and continued by his successor, Chun Doo Hwan. Even Mr. Roh's enemies say the system may once have served the state as a "necessary evil" to help the impoverished nation allocate scarce resources and build political stability.

In its purest form, the practice of giving and receiving money also reflects Confucian expectations to repay kindnesses and to take care of underlings, family and friends. One reason the public seems harder on Mr. Roh's transgressions than those of his predecessors is that Mr. Park used his ill-gotten gains to develop the state and Mr. Chun was generous in spreading his around.

Mr. Chun once passed out 50,000 envelopes of cash to his wide circle of supporters. He astonished a retiring chief aide with a gift of $400,000 to open a law practice and, when he resigned, turned his slush fund over to Mr. Roh.

Mr. Roh, in contrast, is denounced mainly for letting the slush fund grow too large and for allegedly pocketing much of it for himself and his relatives -- not because he amassed it in the first place.

"If you only look at the bad side of the incident, you don't get the whole picture of Korean society," says Ha Yong Chool, an international relations professor at Seoul National University. "What happened is the result of interaction between Korean traditional norms and modern industrial development."

But in its darker form, the practice is also a product of Korea's authoritarian state, where virtually unchecked rulers have demanded obedience and wielded their power ruthlessly. Many business people here say they were forced to give money not to gain benefits but to avoid official harassment, such as tax investigations and a potentially ruinous squeeze on credit.

The most famous case involves the Kukje group. Once Korea's sixth-largest conglomerate, Kukje was virtually dismantled overnight when Mr. Chun cut off all lending in what corporate officials say was retaliation for not making large enough political donations. Hyundai Chairman Chung Ju Yung, founder of Korea's largest conglomerate, testified in 1988 that he gave millions of dollars to Mr. Chun to "feel comfortable" and avoid trouble, and countless other business leaders here make the same claim.

Daewoo, Korea's fourth-largest conglomerate, which was named in Mr. Roh's arrest warrant for giving a $6.5 million bribe to win a submarine base construction contract, also says it was forced to make a donation. Although the company declined to grant an interview, an unnamed official told a Korean newspaper that Mr. Roh threatened to give the project to a rival unless Daewoo coughed up the bucks.

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