A member of the founding family of a corporate behemoth brought down on corruption dragging the head of government with it? Yes, and twice in the recent past! This drama is unfolding in Brazil and South Korea.
In South Korea, Lee Jae-yong, the vice-chairman of Samsung was arrested on charges that Samsung made payments to Choi Soon-sil, a close friend of the country’s president, Park Guen-hye, so as to secure approval for a merger of two Samsung affiliates. This merger consolidated his control apart from bringing him financial benefits. Lee also faces charges for hiding assets abroad.
Samsung got roped into the scandal surrounding the investigation of Choi, who seemed to be peddling her political influence with the President for cash. As the investigation proceeded, Park was impeached by the legislature and had to demit office.
Lee is the third generation of the founding family of Samsung, and controls the group due to his father’s ill health. Samsung, one of the classic chaebols or business groups of South Korea, also controls businesses in life insurance, construction, drugs and theme parks. The companies in the group account for almost one-third of the stock market. The chaebols of South Korea dominate the economy and for long enjoyed preferential treatment from government and courts. But times have changed and the public has now been seeking that they be held accountable for their actions.
In Brazil, there is an oddly-named Operation Car Wash in progress to bring the corrupt to book. This set in motion a political crisis leading to the impeachment of the President Dilma Rousseff. One of the companies that came under investigation, a construction giant Odebrecht SA, was found to be involved in bribing politicians for contracts in 12 countries across the continent. The CEO, a grandson of the founder, was arrested. The investigation involved the authorities of the US, Brazil and Switzerland and the company has agreed to fines that run into billions of dollars, perhaps the largest settlement anywhere in the world.
Meanwhile, thousands protest in the streets of Romania against the government’s efforts to dilute anti-corruption laws.
What does it take for this to happen? At the early stages when somebody smells corruption, there are efforts to cover them up, often with more bribery! If it proceeds to the stage of official investigations, pressure is brought on the investigators as there people in power strive to dismiss the seriousness of the charges and squash it. Meanwhile, court cases are filed to tie the process up in knots and cause fatigue to dilute the investigations. Sometimes governments change, officials are shifted around and cases are filed away. What Brazil and South Korea have shown us is that broad public support, and dogged investigators are a lethal combination. Anti-corruption NGOs around the world would do well to study these cases carefully and understand what institutions and processes need to be put in place so that the rich and powerful are brought down to terra firma.
There are those who call bribery older than the oldest profession. Perhaps it can never be completely eliminated. But a vigilant society can certainly put a lid on it and ensure it is not too disruptive.
The writer is a professor at Suffolk University, Boston
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