Korean Corruption

How a society's norms reinforce or conflict with official rules not only influences whether or not actions are perceived as corrupt but also determines the types and strength of response, if any, to corrupt behavior. Political corruption can include generally illegal activities such as bribery, extortion, and fraud, as well as less clearly defined activities such as influence peddling, nepotism, misuse of public funds, tax avoidance, withholding of information, or even official intimidation of opposition groups. There are close connections among a society's cultural traditions, its history, and how it structures its politics, since all these factors interact with and influence each other.

The patriarchal structuring of relationships is the basis of modern political corruption in Korea. This is because Confucian patriarchal relations are maintained by reciprocity, which in turn creates the type of patron-client relationships in which corruption tends to flourish. Thus, corruption among Korea's political leadership stems from the widespread popular equation of order with Confucian-inspired patriarchy and patriarchal discipline; however, this culture has also contributed to a widespread intolerance of corrupt behavior and the emergence of groups dedicated to its eradication. Korea's Pro-Confucian lobby has linked a rise in corruption with the simultaneous decline in traditional Confucian morality, which requires that patriarchal leaders become a model of Confucian morality and ethics.

South Korea's governance — from a developmental perspective — has been better than that of most countries. Although sometimes suffering from internal corruption, the South Korean government has shown the political will to carry out land reform and institute economic and social policies that promote development. South Korea ranks the 21st-lowest in the world for the risk of business-related bribery. According to data by anti-bribery standard-setting organization TRACE on 17 November 2021, South Korea took 21st place out of 194 countries, based on four categories: business interactions with government, anti-bribery deterrence and enforcement, government transparency, and capacity for civil society oversight.

Syngman Rhee ruled South Korea with an iron fist in the 1950s. Corruption under Rhee took the form of payoffs from foreign aid funds and bank loans. Inflation, an overvalued exchange rate, low interest rates, and elaborate government controls formed an environment in which such corruption operated profitably for those involved but to the detriment of sound investments or national economic development. Rhee’s increasingly corrupt efforts to remain inoffice reached their nadir in the 1960 elections. The obvious malfeasance at work in that vote ledto widespread protest, known today as the April 19 Student Revolution. Rhee was forced, at last,to step down.

After a brief flowering of democracy, a military coup led by General Park Chung Hee took power in 1961. In contrast, corruption under Park took the form of payoffs from private investment. But the payoffs took place in an economic environment more favorable to growth. Thus, the private capital — despite payoffs and the like — fed an investment boom that followed reasonably accurate market indicators of real benefits and costs for the country. Investments approved by the government, even though payoffs were extracted from them, had been tested and approved through feasibility studies and were generally consistent with Korea's economic plan.

After 19 years in power, President Park was assassinated in 1979. Corruption under both Rhee and Park was significant, although hard data on its extent do not exist. Still, corruption in the 1950s was more detrimental than that in later years because of the economic policies pursued by the Rhee government.

To fill their campaign chests, parties not only accepted donations from wealthy donors or extorted them from the business community, but often also demanded contributions from individual candidates and parliamentarians. While the payment of contributions to one’s own party can be seen as a politician’s legitimate support for building a strong party organization and thus invest in the party’s future, they came close to corruption and extortion when they were demanded in the context of candidate selection and nomination for national or regional elections or as the ‘price’ for a promising ranking on a party’s list of candidates. Similarly, it is a corrupt practice when party leaders extort contributions from candidates by threatening to remove their names from the party proportional list, to assign them to a less secure constituency, or if they offer to switch names on the party list in return for donations. It is also corruption when party leaders demand donations from party members as a prerequisite for promotion within the party hierarchy or for eligibility for party leadership. In South Korea, for example, from 1961-1993, candidates on the proportional lists of both the ruling and opposition parties were ranked according to their contributions to the party.

In political systems with weak party competition, or in states with long-term one-party rule and party control over the public sector and society, parties also might be tempted to extort contributions from businesses. Under authoritarian rule until 1993, political fund raising in South Korea crossed the borderline to extortion. All South Korean presidents during this period, from Park Chung-Hee to Roh Tae-Woo, set up private foundations and forced big business to pay regular contributions as membership fees in proportion to their revenues. Those who refused encountered problems when applying for government credit, licenses or business loans, and they also could expect regular tax audits by financial authorities whose personnel was often appointed on the basis of their party connections. Similarly, regular campaign contributors expected lenient treatment of their tax declarations.

In South Korea, most candidates exceeded the legal limit on campaign expenses of approximately 90 million Won (around 112.000 US$) per candidate. During the April 2000 National Assembly elections, Korean media reported that candidates had to spend about 3 billion Won (about 3.75 million US$) to win their local constituencies. Routine violation of legal spending limits suggested that more than laws were required to control politician and party behavior and to minimize excessive campaign spending.

The annual Analytical Report on Crimes from 1999 to 2004 issued by the Prosecution Office of South Korea show six relationships between corruption and public officials. First, public officials with low socioeconomic status (SES) might be more likely to commit crimes than those with high SED. Second, married officials might be more likely to commit crimes than those of any other marital status. Third, public officials in law enforcement departments were more likely to commit job-related crimes than in any other department. Fourth, higher-ranked public officials were more likely to commit job-related crimes than were lower-ranking public officials. Fifth, arrested public officials were less likely to be convicted than were regular citizens. And, sixth, most crimes of public officials might be influenced by organizational custom.

South Korea has had 11 presidents -- six of them directly elected -- but nearly all saw less-than-stellar ends to their terms. Three were forced to step down, one was assassinated and another took his own life soon after finishing his term. Most had their legacies tainted by scandals and two were put behind bars.

1. [1980-1988] Chun Doo Hwan was sentenced to death for his involvement in the 1980 coup through which Chun rose to power, which later was reduced to a life sentence in an appellate court. He was jailed for mutiny and corruption in 1995, but were released two years later through a presidential pardon.
2. [1988-1993] Roh Tae Woo was jailed for mutiny and corruption in 1995, but were released two years later through a presidential pardon.
3. [1993-1998] Kim Young Sam saw his son get arrested on charges of receiving bribes and abusing his position as the president’s son.
4. [1998-2003] Kim Dae Jung received the Nobel Peace prize in his third year in office, but also saw his two sons get arrested for bribery.
5. [2003-2008] Roh Moo Hyun, who was embroiled in a widening corruption scandal, jumped to his death 23 May 2009 after leaving behind a brief suicide note. After his retirement, his family members became embroiled in a bribery scandal. The intense investigation by the prosecution was suspected of being politically motivated.
6. [2008-2013] Lee Myung Bak, arrested on 23 March 2018, faced at least 14 charges, the most serious of which is receiving ten million U.S. dollars in bribes from businesses and agencies. Other charges include embezzlement, tax evasion, and a violation of election law.
7. [2013-2017] Park Geun-hye was arrested on 31 March 2017 on serious corruption charges, including bribery and abuse of power. Her trial is coming to a close and prosecutors are demanding she serve 30 years in jail.

The ROK signed the United Nations Convention against Corruption on December 10, 2003 and ratified it on March 27, 2008 and is also a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions since 1999, and a member of the Asia Pacific Economic Cooperation Anti-Corruption and Transparency Experts Task Force (APEC ACT). The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. By law, public servants above a certain rank must register their assets, including how they were accumulated, thereby making their holdings public.

There are several government agencies responsible for combating government corruption including the Board of Audit and Inspection, which monitors government expenditures and the Public Service Ethics Committee, which monitors the civil servants’ financial disclosures and their financial activities within their tenure and first few years into their retirement. Since February 2008, the Anti-Corruption and Civil Rights Commission manages the public complaints and administrative appeals on corrupt government practices. The Korean government in 2008 also established a Financial Intelligence Unit and has cooperated fully with US and United Nations efforts to identify and shut down sources of terrorist financing. Transparency International has maintained a National Chapter in ROK since 1999.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. The Korea Independent Commission Against Corruption stated that the overall "cleanliness level" of the government for 2008 was 8.17 out of 10 points, a slight decrease from 8.89 in 2007. There were reports of officials receiving bribes and violating election laws. According to the MOJ, 4,067 government officials were prosecuted for abuse of authority, bribery, embezzlement or misappropriation, and falsification of official documents. The National Assembly reported that out of the 250 lawmakers facing indictment, 15 lawmakers were prosecuted for corruption and 12 were awaiting trial.

By law public servants above a certain rank must register their assets, including how they were accumulated, thereby making their holdings public. Among the anticorruption agencies are the Board of Audit and Inspection and the Public Servants Ethics Committee. In February 2008 the Korea Independent Commission Against Corruption, Ombudsman of Korea, and Administrative Appeals Commission were integrated to form the Anti-Corruption and Civil Rights Commission.

According to the Transparency International Global Corruption Barometer 2010, only two percent of South Koreans asked said they had paid bribe to at least one nine different service providers (in customs, education, the judiciary, land related services, medical services, the police, registry & permit services, tax authorities, and utilities) in the past 12 months. Of the 21 economies surveyed in the Asia Pacific, ROK enjoyed the lowest percentage along with Australia.

Transparency International’s Corruption Perception Index for 2014 ranked Korea 43 out of 175 countries and gave it a score of 55 out of 100 (with 100 being very clean) and rates Korea’s anti-corruption enforcement efforts as moderate.

In 2014, to reduce collusion between government regulators and regulated industries that contributed to the tragic sinking of the Sewol ferry, the Korean government tightened regulations governing the employment of retired government officials. The government expanded the list of sectors restricted from employing former government officials during a mandated period after retirement, extended the mandated post-retirement period from two to three years, and increased scrutiny of retired officials seeking jobs in fields associated with their former official duties.

On March 3, 2015, the Korean legislature passed a comprehensive anti-corruption law known as the “Kim Young-ran Act,” named after the original drafter of the bill and former head of the ACRC. The anti-corruption law institutes strict limits the value of gifts that can be given to public officials, reporters, and private school teachers. The law also extends to the spouse of officials, but does not specifically cover political parties. The law is scheduled to take effect in September 2016; however, concerns over its constitutionality may lead the government to revise the law before implementation.

The government will launch a new anti-corruption initiative next year, focused on preventing misconduct from the start. Announcing the plan 12 January 2016, Prime Minister Hwang Kyo-ahn said the so-called four vaccination projects against corruption will shift the government’s anti-corruption efforts from exposure and punishment to monitoring and prevention. Noting that the current response-oriented system resulted in the significant waste of public resources and inflicted damage to the public, Hwang said the government will take preemptive measures to prevent corruption-driven budget loopholes. He said those organizations carrying out public projects will be streamlined as well as their budget execution procedures.

Prosecutors on 28 June 2016 detained former president of Daewoo Shipbuilding and Marine Engineering(DSME), Nam Sang-tae, on charges of incurring huge financial damages to the firm due to accounting fraud and poor management. An official of the Supreme Prosecutors’ Office’s special investigation team said the severity of Nam’s alleged criminal activities and circumstances required them to detain him, adding they secured evidence that Nam committed additional corruption with regard to the management of the cash-strapped shipbuilder.

Prosecutor General Kim Soo-nam apologized to the people 18 July 2016 for a corruption scandal involving a senior prosecutor. Kim offered his apology over the case involving deputy minister-level prosecutor Jin Kyung-joon during a meeting with high-ranking prosecutors. Jin was arrested for accepting bribes and gaining massive amounts of money from shady stock transaction deals.

Former Vice Chairman of Lotte Holdings in Japan Shin Dong-joo was grilled by the prosecution for over 17 hours on 02 September 2016 over his alleged embezzlement and corruption. Shin, the eldest son of Lotte Group founder Shin Kyuk-ho, was accused of receiving wages of some 40 billion won, or 35.6 million U.S. dollars, from seven or eight affiliates of Lotte Group over the previous 10 years as a registered board member, without performing actual duties, which the prosecution claimed amounts to embezzlement. The Group's Vice Chairman Lee In-won died a few days earlier in an apparent suicide.

The former chief of Korea Development Bank (KDB) was summoned by the prosecution on 19 September 2016 in a corruption probe into Daewoo Shipbuilding and Marine Engineering(DSME). Kang Man-soo, the first finance minister of the preceding Lee Myung-bak administration denied his charges, saying that he didn't do anything shameful while serving as a public official. While heading the largest shareholder and creditor to the ailing DSME, Kang is suspected of pressuring the shipbuilder into investing in a biotech firm owned by an acquaintance. Daewoo invested four-point-four billion won in the company over two years in 2012 and 2013, but suspended the investment after Kang's retirement.

The Supreme Court upheld lower courts' rulings that convicted a former spy chief of bribery. The court on 28 September 2016 confirmed the appellate court’s verdict of 14 months in prison and a fine of about 100 million won for Won Sei-hoon, the former chief of the National Intelligence Service, on charges he took bribes from a local constructor. In July 2013, Won was indicted for pocketing 120 million won in cash, 40-thousand U.S. dollars, and gold from Hwang Bo-yeon, president of Hwangbo Construction, between 2009 and 2010 in return for peddling influence. Won was sentenced to two years in prison and fined 160 million won in the first trial. The ex-spy chief was released in September 2014 after serving a sentence of 14 months.

President Moon Jae-in on 22 June 2020 asked for parliament's cooperation to launch a special agency next month tasked with investigating corruption among high-ranking government officials. Speaking at an inter-agency anti-corruption council meeting held at the presidential office, Moon called for all-out efforts in follow-up measures regarding a set of bills that have passed the National Assembly calling for the creation of the exclusive agency and granting more investigative rights to the police.