Pixel Envy

Written by Nick Heer.

South Korea Prosecutor Seeks Arrest of Samsung Chief

Ju-min Park and Se Young Lee, Reuters:

South Korea’s special prosecutor on Monday sought a warrant to arrest the head of Samsung Group, the country’s largest conglomerate, accusing him of paying multi-million dollar bribes to a friend of President Park Geun-hye.

Investigators had grilled Samsung Group chief Jay Y. Lee for 22 straight hours last week as a suspect in a corruption scandal, which last month led to parliament impeaching Park.

The special prosecutor’s office accused Lee of paying bribes total 43 billion won ($36.42 million) to organizations linked to Choi Soon-sil, a friend of the president who is at the center of the scandal, in order to secure the 2015 merger of two affiliates and cement his control of the family business.

This sounded awfully familiar, so I did a little digging and found this Times article by Choe Sang-Hun, from 2007:

Prosecutors are investigating three major allegations of criminal behavior: the creation of a slush fund; bribing prosecutors and government officials; and an effort by the chairman, Lee Kun Hee, and his aide to illegally help his son take over control of Samsung.

“We are ready to unveil the truth through a stern, fair and thorough probe,” said Kim Kyong Soo, a prosecution spokesman. He said prosecutors would also investigate colleagues who allegedly received bribes from Samsung.

In previous scandals that have plagued Samsung, several executives have been convicted of illegally trying to help Lee’s son, Jae Yong, take control of management, and of bribing politicians.

But Lee’s family has escaped largely unscathed. This has lead critics to charge that Samsung runs a vast network of bribery and influence-peddling through the government, the judicial branch, and the media, making the Lee family “untouchable” – a claim vehemently rejected by Samsung.

Sam Byford of the Verge summarized the outcome of that bribery case based on “Thinking About Samsung”, a book by the company’s former legal chief Kim Yong-chul:

Lee Kun-hee resigned from Samsung in 2008 after being indicted and found guilty of embezzlement and tax evasion in Samsung’s infamous slush funds scandal. Kim Yong-chul alleged that the company had a 200 billion won (roughly $200 million) budget for bribing prosecutors and politicians into turning a blind eye to its legal misconduct. Despite prosecutors seeking seven years in jail with a fine of 350 billion won ($350 million), Lee was handed a suspended three-year sentence and fined just 110 billion won ($100 million) — a relative pittance for the world’s 106th richest man. Months later, South Korean president Lee Myung-bak gave Lee Kun-hee a second personal pardon so that he could remain on the International Olympic Committee; the Samsung chairman went on to lead a successful bid to host the 2018 Winter Olympics in Pyeonchang. Amidst widespread criticism that the incident highlighted the favorable treatment given to corrupt chaebol executives, Lee returned as Samsung Electronics chairman the following year.

Like father, like son.