The Korea Herald


FKI under fire for lobbying activities


Published : Aug. 8, 2011 - 18:41

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The Federation of Korean Industries is facing mounting public backlash after the discovery that it pushed companies to lobby politicians to curb anti-corporate legislation.

The country’s central mouthpiece for conglomerates was recently found to have paired some of the nation’s largest companies with prominent politicians such as Democratic Party leader Sohn Hak-kyu and floor leader Kim Jin-pyo to lobby them.
FKI headquarters in Yeouido FKI headquarters in Yeouido

The main cause was to persuade the lawmakers from pursuing legislation that could be detrimental to companies.

Top FKI executives such as vice chairman Chung Byung-chul and executive vice president Lee Seung-chul are said to have masterminded these policy decisions.

Further, FKI bullied companies into making “social donations,” demanding the nation’s top 20 industrial groups to pitch in to form a fund of up to 1 trillion won. Company executives who have been reticent to speak out until now said the federation seems to be “taking the wrong steps because they are under pressure to show they exist.”

The FKI, despite being one of the few independently run private associations with no government or corporate affiliations, has been more or less invisible despite having most conglomerates among its members.

Many of these members, including Samsung Group owner Lee Kun-hee, have failed to make regular appearances at the organization’s executive meetings.

Local political circles ― regardless of their leanings ― are now all calling for the organization to get its act together.

On Monday, the Liberty Foward Party criticized the FKI for promoting corrupt relationships between the corporate sector and political parties.

“Is the FKI trying to relive the Korean past of corrupt relationships? If so, it is a move that runs completely counter to the people’s hopes for political reform and for fighting corruption,” party spokesman Lim Young-ho said.

The Grand National Party last week also blasted the FKI, saying the lobbying was a “dangerous plan” that threatens to reverse all efforts that the Korean society has made to sever ties between the government and corporate sector.

In the post-Korean War era, South Korea, bent on becoming a full-fledged member of international society, turned a blind eye to corrupt ties among the corporate and political sector.

Some of the relationships were spurred by the government, which doled out endless incentives to companies to give them a leg-up, while the companies also had a habit of taking officials out to reap more favors.

Some in the corporate sector believe the latest lobbying scandal may serve as a plus since by weeding out the “bad seeds” within the organization.

“Chairman Huh Chang-soo showed he cares about the corporate sector, so hopefully, the group can navigate through this crisis to become a stronger and healthier organization,” said one industry watcher, declining to be named.

Huh recently stood up for larger companies when former prime minister Chung Un-chan rankled conglomerates with his idea for companies to share their “excess profit.”

By Kim Ji-hyun (