It is apparent that the prosecution investigating suspected slush funds at the construction unit of POSCO is closing in on the conglomerate’s former CEO Chung Joon-yang and his associates.
Prosecutors who raided the head office of POSCO E&C last week have imposed a travel ban on Chung and a group of former and serving executives. They will soon face interrogations over allegations that the company operated slush funds.
The company has already said its internal audit found that executives and staffers stationed in Vietnam accumulated slush funds amounting to around 10 billion won ($8.8 million). However, the firm has said the money was used as rebates for local contractors, denying suspicions that some of the funds were funneled into Korea.
The slush funds case alone deserves thorough investigation and harsh punishment. Yet prosecutors have already indicated that the probe could be expanded toward other suspected corruption cases, including those surrounding past acquisition deals, and more POSCO affiliates.
Put simply, the prosecution is targeting the entire steelmaking giant, which ― judging from similar past cases ― would certainly result in the indictment of Chung and other former and current executives.
To be fair, no one, including POSCO, should be spared from punishment if they have done something wrong. However, what arouses our attention ― and considerable suspicion ― is that Chung was very close to the Lee Myung-bak administration.
Since President Park Geun-hye took office two years ago, there have been persistent speculations that Chung may become the target of a corruption investigation.
The speculations were based in part on the tradition in Korean politics that the ruling government often utilizes powerful agencies like the prosecution and tax office for political purposes. For example, “taking care of” former and current political enemies; diverting public attention away from a crisis in government or recovering the president’s approval ratings; or taming politicians, civil servants and big businesses.
As if to preclude suspicion of a connection between this tradition and the probe into POSCO, Prime Minister Lee Wan-koo issued a special statement in which he declared an “all-out war” against corruption.
In a nationally televised “special statement,” Lee said the fate of the country depended on uprooting corruption and that the government would “mobilize all its powers and means” to root out corruption. We wonder whether it was a coincidence that investigators raided the POSCO E&C office shortly after Lee issued the statement.
Besides a crackdown on slush funds operated by conglomerates like POSCO, Lee mentioned sleaze in defense procurement, wrongdoings in overseas natural resources development projects and lax discipline in officialdom as the major targets of the corruption bust.
It is ironic that Lee’s statement, which included the overseas resources development ventures ― which were one of Lee Myung-bak’s pet projects ― bolstered suspicion, rather than alleviating it, and the latest anticorruption campaign might have been driven by political purposes. Rep. Yi Jae-oh, a close confidant of the former president, called the anticorruption drive as a “show” aimed at preserving the Park administration.
Yi might have kept in mind that Park’s approval ratings, though back on a recovery path, had plummeted below 30 percent and that she needed fresh momentum to firm up her governing grip on politicians, government officials and big businesses at a time when she has entered the third year of her five-year presidency.
The war against corruption is something we should wage constantly and without fanfare. More importantly, it should also be without political intervention.