Secrecy and Korea’s corruption problem

The following op-ed was originally written for translation into Korean for Newsweek Korea. — John.

With another year coming to a close, the release of Transparency International’s 2013 Corruption Perceptions Index this week presents an opportunity to reflect on the reality of corruption in South Korea. According to the Berlin-based organization’s findings, the reality is a grim one.

Korea not only failed to improve on its previous year’s ranking, but dropped one place to 46th among 177 countries. More troubling still, this year’s ranking continues a steady downward trend: the nation has seen its position fall every year since 2010, when it ranked 39th. While it is worth noting that the index specifically measures perceptions rather than hard data, it is a nevertheless respected gauge worldwide. A ranking just inside the top 50 can only be described as disappointing for a country at Korea’s advanced stage of development. Illustrating this point, Korea was outranked by a number of far less wealthy countries including, but not limited to, Botswana, Puerto Rico, Cyprus, Poland and Estonia.

When I wrote about this issue for The Korea Herald around this time last year, various experts on the issue offered their explanations for Korea’s poor faring. Kim Sung-soo, the director of Transparency International Korea, pointed to a cosy relationship between the public sector and private business that resulted in lax punishment of corruption. Park Gae-ok, an official with the Anti-Corruption and Civil Rights Commission, meanwhile, argued that Korean society had long tolerated corruption as the price of its remarkably fast economic development. Kim Taek, a professor of police administration at Jungwon University, put blame on Korean culture itself, arguing that family and school ties created strong incentives for shady dealings.

All of these explanations no doubt have merit. But I would offer one more: the profound secrecy by which much of Korean society operates.

It is no accident that the most prominent anti-corruption organization in the world features the word “transparency” in its name. In a transparent society, the public square is freely observable to all. When an individual’s actions are likely to have implications for the public, it is expected that they and their behaviour will be scrutinized. This especially applies to people with political, economic or social power because their ability to influence society is that much greater. Transparency implies accountability because laying blame first requires knowing who is at fault. And it implies democracy because informed decision-making is impossible without relevant information. Transparency makes corruption both less likely and harder to get away with.

In Korea, a culture of secrecy severely limits the public’s ability to accurately assess the society in which they live. Stories of crime and corruption in the Korean media rarely identify any of the parties involved, instead using common surnames like “Kim” to describe suspects and law enforcement officials alike. Even convicted murders are routinely spared the indignity of having their name appear in the news. In more than three years working in Korea as a journalist, I have become resigned to the fact that members of the public and public officials alike are generally extremely reluctant to have their name appear in print, even in the most innocuous of circumstances. Added to this is an extremely harsh defamation regime that, unlike most of the developed world, treats certain speech as a criminal rather than civil offence, and shields even the reputations of the deceased.

There is a tension between the “right to privacy” and the “right to know” in every developed society, and views inevitably differ on where to draw the line. There no doubt are people who appreciate Korea’s apparent prioritization of privacy compared with other countries. But such is the lack of transparency here that the media’s function as a public watchdog is regularly rendered impotent.

I saw just one example of this when I wrote a number of stories about a fraudulent travel agent in late 2011 and earlier 2012. After initially not covering the case, in which dozens of foreigners living in Korea were scammed out of some $150,000, Korean language media eventually began following the story. Their reports, however, named neither the scam artist nor the name of his business. In other words, members of the public were given no means to protect themselves from exploitation. The news, in effect, was useless. The dearth of information was especially pertinent in this case as the fraudster had already been arrested and released, whereupon he continued his scam under a new alias. It is not unreasonable to conjecture that similar information vacuums regularly result in the avoidable victimization of innocent people.

If Korea is serious about battling corruption, it needs to bring society further into the light. Defamation law reform would lessen the risks of speaking out against unethical conduct in both the public and private sectors. Media convention could be reimagined so that the criminal and the corrupt are not given more protection than the public the media purports to represent. Perhaps more than anything, society could benefit from less secrecy in everyday life. Corruption grows best when it can’t be seen.

Advertisements

The cost of South Korea’s event-hosting obsession

This was originally written for Newsweek Korea for translation into Korean. — John 

By John Power

On its surface, the forgery scandal enveloping Gwangju mayor Kang Un-tae could be seen as just another of countless examples of corruption in Korean officialdom. Yet again, a public official stands accused of breaching legal and ethical boundaries to achieve certain ends. The alleged wrongdoing this time involves the forging of the signatures of a former prime minister and former culture minister to secure the city’s hosting of the 2019 International Aquatics Federation World Championships.

But the fiasco is also illustrative of a separate malaise within Korean bureaucracy: an obsession with hosting any international sporting event, no matter how costly, if it can be seen to showcase Korea to the world. Whether in relation to next year’s Asian Games in Incheon; the 2018, Winter Olympics in Pyeongchang; or the 2019 International Aquatics Federation World Championships, arguments for hosting international meets follow a familiar pattern. Hosting the prestigious event in question, we are told, will boost the local and national economy and enhance Korea’s image broad.

Pyeongchang’s Olympic bid committee and several private research institutes have put forward the economic argument, predicting that the Games will create billions of dollars worth of economic activity. Numerous other commentators have hailed the potential of the competition to boost national prestige. If all this wasn’t enough, the organizers have even claimed, with little elaboration, the Games will promote peace on the Korean peninsula. Similar arguments have been made for other upcoming competitions to be hosted here.

Yet the evidence from past events pours cold water on such lofty predictions. Even the 2002 World Cup, widely seen as one of the most successful events held here, was an economic dead loss, according to American economist Victor Matheson, who has studied the economic effects of international sporting competitions. He maintains that a modest increase in tourist numbers to the country was more than offset by the cost of new infrastructure for the competition.

“The overwhelming consensus of independent economists not on the payroll of the sports boosters is that stadiums, arenas, racetracks, etc. have very little long-run economic benefit,” Matheson told me in a recent interview I did for a related article.

As Matheson noted, the majority of the stadiums built especially for the competition at a cost of some $2 billion dollars are underused today. Were the finances of authorities bidding for such events in good shape, they might be accused of “only” wasting public money. But the state of local governments’ balance sheets, including those of Pyeongchang and Incheon, is such that bidding for such events seems positively reckless.

Yet one senses that economic arguments are not the primary motivator for many of those eager to see Korea host large sporting events, coming second to a much more visceral impulse: national pride. Korea, despite all its achievements at home and on the world stage, often gives the impression of a country highly concerned with what the world thinks of it. Successful bids such as Pyeongchang’s are constantly framed in terms of how they will project Korea to the world. Soon after Pyeongchang was announced as the host city for the 2018 Games, media here began discussing the so-called “Pyeongchang effect”– how the Games will improve Korea’s image abroad.

Koreans have much to be proud of in their country, and national pride is not without merits in measured doses. But it is worth asking who is served by costly competitions likely to leave future generations of Koreans in debt. The Korea of 2013 is not the same country of 1988, when it could be convincingly argued that the Seoul Olympics announced a little-known country’s arrival on the international stage. Korea today is the land of Samsung and Psy, and is probably close to being as well known to most foreigners as a middle-power crammed between China and Japan could expect to be. It becomes ever more difficult to justify spending billions of dollars in the service of abstract notions like national prestige as the country comes ever closer to a level of development comparable to the world’s wealthiest nations.

None of this is to say that Korea should never bid to host international sporting events. Events chosen with regard to the characteristics of their prospective hosts and submitted to rigorous cost-benefit analysis can no doubt benefit the country. But there should be no compulsion to bid for any and every international competition. Korea can afford to be selective. If anything, it cannot afford not to be.

[The Korea Herald] How can Korea end corruption?

By John Power

South Korea, by many criteria, increasingly fits the mold of an advanced nation. But, despite the country’s growing role in international affairs and its status as the world’s 13th-biggest economy, one black spot, at least, challenges that definition: pervasive corruption.

Korea’s public sector ranked just 43rd out of 182 countries in last year’s Transparency International Corruption Perceptions Index. The ranking was a drop of four places from the previous year. Meanwhile, a survey released by the Anti-Corruption and Civil Rights Commission last month found that 40 percent of businesspeople deemed Korean society to be corrupt.

This year alone, several of President Lee Myung-bak’s aides and family members, the ex-head of the Korea Communications Commission and the floor leader of the main opposition party have all been implicated in corruption scandals. The private sector has fared little better: Taekwang Group and Hanwa Group’s respective chairmen were handed down prison sentences for separate instances of embezzlement. At the lower levels of the economy, the Financial Supervisory Service sanctioned some 450 financial company employees for misconduct in the first nine months of the year.

Rotten nation

In a withering assessment of Korean society, the president, himself currently embroiled in a scandal over a now-abandoned retirement home project, last year claimed that “the entire nation is rotten.”

Kim Sung-soo, the executive director of Transparency International Korea, told The Korea Herald that regulations and punishment of corruption were insufficient, largely because of an overly cozy relationship between the government and private business.

“Korea’s anti-corruption policy and regulations are not strong enough, especially for the private sector, to combat corruption. Presumably there is strong lobbying or even bribery from the private sector to the public sector,” said Kim, who believes that a change of power in December’s presidential election would be a positive step forward as Korea’s corruption perceptions ranking has dropped on the current government’s watch. “Money talks too much in Korea.”

All three main presidential candidates, Park Geun-hye of the Saenuri Party, Moon Jae-in of the Democratic United Party and independent Ahn Cheol-soo, have placed heavy emphasis on cleaning up the political and business worlds during their campaigns.

Korea’s rapid development in the latter half of the 20th century came on the back of heavy state involvement in the economy, with crony capitalism a persistent feature of previous dictatorial governments. Economic growth was in the past seen as a greater priority than transparency and the rule of law, said Park Gae-ok, director-general of the Anti-Corruption Bureau of the ACRC.

“In the case of Korea, illegalities and irregularities were tolerated in the course of rapid economic growth and in connection with nepotism and paternalism characteristic of Korean society,” said Park. “It takes a very long time to remedy such problems, and detection and punishment are not a fundamental solution.”

Legislation

Illegality is just one factor in government-business relations with an influence on the scale of corruption. Much of the political realm’s authority to shield the powerful from the consequences of their crimes is enshrined in law. The current and former presidents’ pardoning of numerous political and business figures has long been a source of public antipathy.

Kim Pan-suk, dean of the College of Government and Business at Yonsei University, said that the president was “critical” to efforts to fight corruption.

“In my view, political will is the most important factor in reducing corruption,” said Kim. “If you go back to the Kim Dae-jung regime, he was a very good president and had a good vision to reduce corruption so he promulgated many rules and regulations.”

The Kim Dae-jung administration introduced the Anti-Corruption Act in 2001, and established the Korea Independent Commission Against Corruption the following year. The Lee administration merged the KICAC with two other bodies in 2008 to form the ACRC. The most recent legislative move against corruption was the Act on the Protection of Public Interest Whistleblowers, passed last year. As of October, the ACRC had received 1,216 whistle-blower reports, ranging from issues to do with consumer rights to healthy and safety.

The legislation has resulted in a number of significant outcomes in the public interest, according to Park.

“The new whistle-blowing mechanism has since contributed to correcting violations of the public interest and improving relevant laws and systems,” said Park. “For instance, flaws in reinforcement work for the understructure of a railway bridge were corrected, while legal amendments and introduction of new facilities were made to prevent the infection of the hepatitis B virus through blood transfusion.”

Lee Sang-deuk, the elder brother of President Lee Myung-bak, answers reporters’ questions outside the Supreme Prosecutor’s Office in Seoul, where he was questioned on charges of taking bribes in July. (Yonhap News)

Lee Sang-deuk, the elder brother of President Lee Myung-bak, answers reporters’ questions outside the Supreme Prosecutor’s Office in Seoul, where he was questioned on charges of taking bribes in July. (Yonhap News)

Other anti-corruption measures by the ACRC include a corruption impact assessment of proposed legislation, a yearly assessment of corruption in the public sector, and anti-corruption education and training of public employees.

Culture factor

Park said that his organization is also currently working on the passage of the Bill on the Prohibition of Illegal Solicitations and Prevention of Conflicts of Interest of Public Officials, which would rectify the current situation where officials can avoid punishment if it cannot be established that they provided favors in return for a bribe.

“The bill is aimed at prohibiting malpractices in the public sector, as well as providing specific standards of behavior for preventing the interference of private interests in the performance of public officials’ duties. When enacted, the bill is expected to contribute greatly to preventing and deterring corruption in the public sector,” he said.

Politics and business are not the only explanations offered for the scale of corruption ― many also point to a problem of culture.

“Korean culture is Confucian and authoritarian bureaucracy. Also, school and family ties are very important to (personal) circumstances,” said Kim Taek, a professor of police administration at Jungwon University.

We must renew our social mind and Korean officials and nationwide support for the fight against bureaucratic corruption, for transparency and justice. But Korean political groups, especially the president, parliament members and Korean officials, seek private interest and lack common sense and so they encourage in corruption.”

Yonsei University’s Kim said that an overly partisan media that fixates on certain scandals but ignores others for political reasons added to the lack of transparency in Korean society.

“Under such circumstances, if you investigate something, people may suspect some biased evaluation, so I think this situation should be corrected. The media should be fair and broadly supported by the general public and then investigate certain things and they will have the public’s confidence and trust.”

Institutions, however, can only be so responsible for fixing societal problems, according to some experts. The most fundamental change must ultimately come from the public.

“The most fundamental element in fighting corruption is the change in the mindset of people,” said Park. “Increased soundness and transparency in a society helps create an environment that keeps even customary malpractices and minor forms of corruption from taking root.”