CRIME & PUNISHMENT
DECEMBER 28, 1995
Two former South Korean presidents have been arrested, and some of the country's top business leaders have been charged with bribery. Ian Williams of Independent Television News reports, followed by a discussion with Elizabeth Farnsworth and two Korea experts.
IAN WILLIAMS, ITN: On a rocky hillside in Southwest Korea, a graveyard spreads just about as far as the eye can see. One area has been separated off. It has become a place not only of mourning but a pilgrimage for thousands of Koreans.
Here lie the victims of one of the bloodiest incidents in modern Korean history, an incident, the memory of which the authorities have until now preferred to leave buried, along with the dead of Kwangju. In May 1980, tens of thousands of citizens of nearby Kwangju rose up against Korea's then Korea Junta. Tanks and crack paratroopers were sent to crush the rebellion.
Officially, more than 200 died and 2,000 were injured. Local people claim the real figures are much higher. Near the graveyard, Kwangju has placed caricatures of those it holds responsible. Foremost among them, Noh Tae Woo and Chun Doo Hwan, the men who headed the Junta that ordered the 1980 crackdown. The two went on to become successive presidents of Korea. For weeks, there have been often violent protests in Kwangju and Seoul, demanding the arrest of Chun, who came to power by way of a military coup sixteen years ago today and whose career was a iron hand until 1988. In spite of these protests, Chun was considered virtually untouchable.
Then, the unthinkable happened. He was arrested and accused of military rebellion in relation to the coup and massacre. This reversed the policy of letting the matter rest in the name of reconciliation. Earlier, the man ruled Korea from 1988 until 1993 had also been arrested. He too is facing charges relating to the massacre. But the immediate reason for the detention of Noh Tae Woo was for massive, almost unbelievable corruption during his term in office, corruption in which Chun has also been implicated and which has provided the trigger for the wider push for justice.
The origin of this drama seemed modest enough, beginning in the Korean National Assembly and in the person of opposition MP Park Kye Dong. For months, his lonely claims that Noh operated a large slush fund, bribes from Korea's big industries, fell largely on deaf ears. The breakthrough came in late October, when he was handed a bank statement linking Noh to a secret account containing millions of pounds. It couldn't be ignored.
PARK KYE DONG, Opposition MP: (speaking through interpreter) This is a critical piece of evidence that exposed the former president's corruption. It's a bank statement that shows 11 billion Korean Won is deposited in this account. The money has been locked in for two years and eight months.
IAN WILLIAMS: Within days, Noh Tae Woo was tearfully confessing to amassing 400 million pounds in kickbacks, to which most of Korea's major companies had contributed in exchange for government favors. Luxury hotels in Seoul have become the venues at which scores of business leaders are now being interviewed. The authorities say the discretion is so as not alarm the market. Yet, what's emerging is a picture of systematic, routine bribery in which few did not participate.
The boss of the giant Daewoo Corporation is one of seven tycoons who have so far been charged but left at liberty for the good of the economy. Daewoo's defense, like those of other companies, is they had no choice, it was the system, a sort of survival tact; since the government had control over every aspect of the economy, they had little choice but pay off officials from the president downwards.
LEE HAHN KOO, President, Daewoo Research Institute: You know, many businessmen who are ordinary persons cannot be expected to act as religious person, so I believe the circumstances is more important in determining the way of act and the conduct.
IAN WILLIAMS: So in a sense, did it during that period, did it become almost an established practice?
LEE HAHN KOO: Yes, kind of.
IAN WILLIAMS: Investigators are already probing several 1980's arms deals, in particular whether kickbacks were involved in a multi-billion pound deal to buy F-16 fighters. The American contractor denies the charge. Two things now do seem clear: This particular tiger economy, much discussed and often admired in the West, has been driven, at least in part, by an enormous system of bribery and graft. And from the streets of Seoul to the graveyard of Kwangju, the rapid economic growth that's been created here has not been able to buy off a popular desire for justice.
ELIZABETH FARNSWORTH: Since that report was filed, former Presidents Noh and Chun have been indicted for their involvement in the 1979 military coup which brought Chun to power. Prosecutors are still investigating their roles in the 1980 Kwangju massacre. Indictments are expected in the next few weeks. Former President Noh's bribery trial began last week. Chun ins to be indicted on bribery charges tomorrow.
Now, to help peel back the layers of this story, we turn to veteran Korea watchers Tony Namkung, director of the Seton Hall Institute on Korean Affairs at Seton Hall University, and Don Oberdorfer of Johns Hopkins University's School of Advanced International Studies, and author of a forthcoming book about Korea. Thank you both for being with us. Tony Namkung, first, how important is what's happening? It's not exactly news that there's been corruption in Korea. President Chun went to a Buddhist monastery for two years to atone for corruption charges he admitted to before, but is the scale of this different?
TONY NAMKUNG, Seton Hall University: Well, I find the title of this segment a little amusing, "Crime & Punishment," because what we're seeing here is not a typical crime in the legal sense and not typical punishment.
What we're seeing is an entire system that is indeed itself on trial, an entire way of life which can perhaps best be characterized as being twin-layered, the bottom layer being essentially a replica of the Japanese iron triangle, that is, the collusive practices that exist amongst the industrialists, the bureaucrats, and the politicians, the top layer being the coercive mechanisms in place, namely the military, the intelligence agencies, and the police. In combination, this way of life is now being challenged.
ELIZABETH FARNSWORTH: So what's new here is really that it's all being challenged at the same time?
MR. NAMKUNG: Yes. So in that sense, this is something that goes far beyond a mere criminal act that is being tried.
ELIZABETH FARNSWORTH: Do you agree with that, Don Oberdorfer?
DON OBERDORFER, Johns Hopkins University: Yes. Well, as you probably know, I spent 38 years in journalism, and an editor told me once the greatest stories in the world are proving what everybody already knows. And in this case, everybody knew that there was extensive corruption, if you call these kinds of payoffs corruption. Most people do. But the scale of it was absolutely stunning--$600 million.
Park Chung Hee, the dictator who took over in 1961, had payoffs to his and his administration. Chun Doo Hwan, who had followed, had paid off to him, and everybody knew it. But two things, one, the scale is immense, and secondly, the proof, which was never there before, has suddenly put this thing into a different context. And I think it's a political earthquake in South Korea.
ELIZABETH FARNSWORTH: Why do you think it's happening now?
MR. OBERDORFER: Well, partly, it's due to the president, the current president, Kim Young Sam. When he came in, he instituted a real name law, a law which required that bank accounts actually be in the name of the person who owned them and not be in phony names or somebody else's name. And that was the thing that really threw this corruption issue on the table, because under that old system, you had never found out who owned this money that President Noh has now admitted was his. So that's his reforms, I think, had an effect on that. Secondly, Korea's grown up. Korea is the first country in the modern era to go from a developing country to a developed country.
It's about to join the OECD, the rich man's club in Europe. It gives foreign aid. It has billions of dollars of investments abroad. It is second in the whole world in ship- building and fifth or sixth in either various other things, such as electronics, the export of various kinds of steel, automobiles. This is a big country now. The politics have not kept up with this because the politics, as Tony said, were based on an old system of favors and you get a favor in return. Well, now that's changing and the whole system is changing now, and I think we're going to see a Korea that's quite different in a few years.
ELIZABETH FARNSWORTH: Do you think that's why it's happening now? Do you agree with that, or are there other factors?
MR. NAMKUNG: I agree basically with that, but there are more immediate factors. The constitutional court was set in the last week of November to rule in favor of the complainants from the Kwangju massacre who had sought to appeal the prosecutor's decision of July 1995, saying that there were no grounds to prosecute these people, and the very day before, Kim Young Sam, the president of South Korea, announced that he was going to go after these people with a special law.
A second dynamic that we need to keep in mind here is that Kim Dae Jung, his long-standing arch-rival arch-nemesis, has declared himself to be presidential material once again, having retired from politics permanently. Nothing would motivate Kim Young Sam to move in this direction as much as the specter of a Kim Dae Jung presidency.
ELIZABETH FARNSWORTH: So part of this is politics on the part of the current president.
MR. NAMKUNG: Yes, very much so.
ELIZABETH FARNSWORTH: Before I get in for any more or right away to the Kwangju massacre, I want to ask you some more about the economy just for a minute. What's the effect of charges against 35 leading businessmen? I mean, the people that really made the Korean miracle in some ways, what is the effect on the economy of this?
MR. NAMKUNG: Well, the reverberations have yet to be felt in full. Clearly, capital spending in 1996, which I think has projected about $8.1 billion, will go down. How much down it's hard to say, but already we're seeing interest rates go up both in the care of loans that banks are making oversees and in short-term loans in the Korean market, itself, and so we're seeing some actions taken by the finance ministry to try to encourage greater foreign access, foreigners' access into the Korean capital markets.
This will have an effect on growth rates in 1994. But more than that, this is very unsettling to, to businessmen. It's welcomed certainly by small and medium-size businesses who feel that now perhaps the playing field will be level. But for the conglomerates, it's an extremely unsettling period.
ELIZABETH FARNSWORTH: And does it affect the U.S. at all, both U.S.--thinking of U.S.-Korean relations, but also there's a chance that there will be charges against General Dynamics because of this F-16 issue.
MR. OBERDORFER: Well, if there are charges against General Dynamics or some other American companies, it may have some effect, but back in the 70's, there were not just charges, there was proof of several American corporations giving bribes and payoff money in the Park Chung Hee's administration, and it didn't have any permanent effect. I doubt that it's going to have a lasting economic effect in the sense of the future of the country.
It will be a positive in the sense of putting things on a more modern, sensible business-like procedure in, in Korea. I think the central issue for the United States in all this has to do with the South Korean attitude toward North Korea. Up to now the U.S. has taken a position that it really doesn't want to move ahead with North Korea much faster than the relations between South and North move ahead. Under current circumstances, it doesn't look like the South is really in position to move ahead with the North. There's too much confusion at home, and the North hasn't been that interested either in moving with the South.
ELIZABETH FARNSWORTH: And that is the major issue on the Korean Peninsula, of course.
MR. OBERDORFER: That's right.
ELIZABETH FARNSWORTH: What happens--
MR. OBERDORFER: So now the United States government has got to decide how and when and where to move ahead with the North knowing that the South-North relationship is not going to be moving very much in the next year or so. Somehow, it's got to get off this dime, and that's going to be a very difficult thing to do.
ELIZABETH FARNSWORTH: What do you think about that, Tony Namkung? What about the North- South relationship and the, the agreement between--the framework agreement is going ahead, right, the light water reactor, the various agreements having to do with the nuclear power issue?
MR. NAMKUNG: Yes. The light water reactor agreements were signed only very recently on the 15th of December. These issues are much more closely intertwined than we think. North Korea's greatest primary beef with South Korea has been precisely the Japanese-like structure of collusion and corruption.
And to the extent that the U.S. can maintain a stabilizing influence, now that it has the kido, the light water agreements with North Korea, and there are some efforts small and modest but important efforts being made to improve relations with North Korea to try to maintain that, that sense of balance on the peninsula, to the extent that the U.S. can play that role without being--take an equidistant role, but keeping track of both Koreas, as it were, the better the prospects for genuine political reform in the South, which would then result in an easing of tensions between North and South Korea.
ELIZABETH FARNSWORTH: And how does the Kwangju massacre play into this? This was a massacre in 1980. Both presidents--both ex-presidents, one in prison, one in the hospital because he's on a hunger strike, are now being investigated in connection with it. Two hundred people are said to have died, but some people say many more died. How does that play into all this? And I'm interested because it raises the whole issue of impunity that so many countries which were once military dictatorships face. How do you think it plays into both the North-South issue and the political issue? And I know that's a big question.
MR. OBERDORFER: Well, in a way, it doesn't play into it very directly. It's really a separate subject from the corruption scandal, but the corruption scandal plus, I must say as I understand it, docudramas, which have been showing on South Korean television about the Kwangju incident and about the takeover with the military coup by Gen. Chun, have impelled president, the current president, Kim Young Sam, to move on this other front, which is also widely popular. So you have these two things. You have somebody--
ELIZABETH FARNSWORTH: Like an unraveling.
MR. OBERDORFER: You have the same people--some of the same people involved in them. This doesn't involve the business community, however, but they're wrapped up in a different way.
ELIZABETH FARNSWORTH: I see. I have to interrupt you. I'm sorry. We've got to go. Thank you both for being with us.