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South Korea’s anti-corruption drive in doubt as Samsung head walks free | The World Weekly

Whether by fate or by design, it is far from uncommon for world leaders to find their time in office dominated by foreign affairs. Few, however, have as good reason for this as Moon Jae-in. Between the ballistic ambitions of his North Korean neighbours, and input from Washington many describe as erratic at best, regional stability is a matter of life and death for the South Korean president and his people.

Much of the world is quite happy for Mr. Moon’s schedule to carry on as such, with North-South relations entering a key phase as the Winter Olympics approach. The president has won praise for brokering an agreement to bring North Korea to the games in the South, although it is unclear how long the diplomatic thaw will last once the competition winds down.

South Koreans, however, are by no means inclined to let their leaders lose track of domestic affairs. This week brought one of the country’s most contentious scandals back into the headlines, as Samsung Group heir Lee Jae-yong walked free from jail after a panel of judges suspended his sentence for corruption charges.

An appeals court sentenced Mr. Lee to two-and-a-half years in prison on charges including bribery and embezzlement, halving the term he was originally handed down, but suspended the sentence for four years. The decision, which observers described as a surprise, has reignited an intense public debate over widespread corruption that has long loomed over South Korean politics.

Last year, a corruption scandal involving then-President Park Geun-hye and her secret confidante, Choi Soon-sil, rocked the country. Ms. Park was impeached after four years in office on charges relating to influence peddling by Ms. Choi, who had no official government position. 

The case against Mr. Lee, who has been de facto head of Samsung since 2014, centred on payments the company made to Ms. Choi which prosecutors argued were intended to secure government favours.

Mr. Lee had been convicted in August, around six months after his high-profile arrest. The Seoul High Court decision this week partly agreed with the lower court’s ruling by convicting him of bribing Ms. Park by supporting the equestrian career of Ms. Choi’s daughter, as well as on embezzlement charges. But it differed by saying Mr. Lee did not seek out the former president’s help.

The new ruling also painted the clandestine goings-on in a much less damning light for Mr. Lee. The presiding judge described the tycoon’s involvement as “passive compliance to political power” rather than proactive graft to get government backing for a controversial 2015 merger of two Samsung divisions.

“Park threatened Samsung Electronics executives,” the judge said. “The defendant provided a bribe, knowing it was bribery to support [the friend’s daughter], but was unable to refuse.”

In 2014, Samsung chairman Lee Kun-hee, his son Lee Jae-Yong and former President Park Geun-hye were ranked the first, second and third most powerful South Koreans on Forbes magazine’s list of the world’s most powerful people.

Ms. Park is currently on trial for charges including bribery, coercion and abuse of power. She denies any wrongdoing, as does Mr. Lee.

Above the law

The ruling has outraged many South Koreans. By squaring the blame on Ms. Park, the court has reinforced the longstanding belief that the judiciary is overly lenient towards the bosses of South Korea’s family-owned business behemoths, or chaebols

Whether or not such concerns have merit, the headlines are a headache for President Moon, who was elected on an anti-corruption platform following Ms. Park’s fall from grace.

"It's truly disappointing," Park Yong Jin, a National Assembly member from Mr. Moon's liberal party, said in a statement. "We confirmed once again that Samsung is above the law and the court."

Reformers have demanded greater oversight and enforcement of existing rules. Although Mr. Moon’s administration has taken small steps towards weakening the chaebols’ dominance, doubts have persisted over whether it could see the fight through.

The original sentence handed down to Mr. Lee was hailed as a watershed moment for the anti-corruption drive, but the latest decision may hand the momentum back to the doubters.

In some respects, there are limits to what one president can achieve. The ruling’s reinterpretation turned on the court’s decision that no explicit request had been made by Mr. Lee to the then-president for support of the merger, raising questions over how the law can hope tackle a culture in which mutual favours are implicitly expected between the rich and powerful.

Indeed, the practices Mr. Moon has vowed to eradicate can trace their roots back for decades. The chaebols were key to rebuilding the country after the devastation of the Korean War in the 1950s, and their influence slowly seeped beyond government contractors into the courts and the media.

When it comes to corruption, South Korea has frequently been disappointed by its leaders. “All South Korean presidents have talked about ending corruption, but with little effective action,” James Hoare, an academic and former British diplomat, told The World Weekly. “Too often, they or family members have been involved in a system that floats on vast seas of cash.”

Meanwhile, generations of chaebol tycoons have continued to find favour among them. Lee Jae-yong’s father, Samsung chairman Lee Kun-hee, was convicted of financial wrongdoing and tax evasion in 2008, but was handed a three-year suspended prison sentence.

A few months later, then-President Lee Myung-bak pardoned the senior Mr. Lee, allowing him to return to Samsung. The junior Mr. Lee, who has been de facto head of the company since his father suffered a heart attack in 2014, is now free to take up his post again.

The senior Mr. Lee was named by South Korean police this week as a suspect in a new 8.2 billion won ($7.5 million) tax evasion case involving the use of Samsung employees’ bank accounts.

As if years of ingrained practices weren’t enough of an obstacle, political tribalism continues to dog reformist efforts. Lee Myung-bak, an ally of and predecessor to Ms. Park, recently denounced a corruption probe which resulted in the arrest of two of his former aides as “political revenge”.

In a statement after last month’s arrests, he suggested liberals like Mr. Moon were bent on avenging the death of former President Roh Moo Hyun, who committed suicide in 2009 after being questioned over corruption allegations.

The president is caught in a difficult position. “A considerable number of South Koreans believe that Moon’s anti-corruption drive has a hidden political agenda to completely destroy a conservative political base that has been already deeply hurt by Park’s scandal,” says Jaechun Kim, a political scientist from Seoul’s Sogang University. “Many also believe going after Lee Jae-yong has been a witch hunt of some sort.”

Nonetheless, he told TWW, “Moon’s supporters think that the release of Lee was not fair and that the anti-corruption drive has been half-hearted.”

While history makes corruption seem an almost inescapable feature of South Korean society, recent experience suggests patience is running thin on the issue. The scandal surrounding the former president saw hundreds of thousands of people take to the streets in protest. Many went out to demand Ms. Park’s impeachment, but a backdrop of popular resentment against the perceived unfair influence of the chaebols is thought to have been a crucial catalyst.

President Moon has kept his vow to end the use of presidential pardons for corrupt executives, but he will have to go much further. Easing tensions with the ever-threatening North Korean regime may be popular, but South Korea’s voters are unlikely to forget why they chose him for office.

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