Writing about the unfolding scandals in South Korea is like shooting at a rapidly moving target; the major dailies now have “Scandal Watch” sections and roundups (for example, The Korea Times for November 3). It is quite possible that this post will be overtaken by events given the latest poll numbers (reproduced in Korean below from Gallup, but the trend line is pretty clear).
We try to avoid instant obsolescence by focusing on some of the discrete legal issues that the President will have to confront moving forward. Looked from the outside, the scale of the challenges is daunting. At the end of last week, even the Saenuri Party leadership—and both pro- and anti-Park factions—were calling on her to forego her constitutional protections (detailed below) and to allow herself to be investigated in order to quell the uproar. (For political reasons we explore in a subsequent post, possible political beneficiaries of her troubles have not all reached the conclusion she should resign; we explore that issue in another post). In her second apology she openly admitted that Choi had committed “illegal acts” and she vowed to cooperate. She also said that if “I have to be investigated, I am ready to accept that as well” and “I am fully prepared to take responsibility if the investigation finds any wrongdoing on my part.”
Yet it is not clear what it means for her to be investigated. To provide evidence with respect to Choi or other parties? With respect to a case against her, even though she has immunity? Questions are already being raised about the independence of the prosecutors as they appear to focus on some of the lesser offenses and sidestep what are in our view the most substantial potential charges: the cocktail of bribery, extortion and embezzlement that surrounded the MIR and K-Sports Foundations.
Choi Soon-sil’s Access and Influence 1: Appointments
As everyone knows, the heart of the scandal is the extraordinary access and influence exercised by Choi Soon-sil; see our previous post on the basics. But the irony is that such access per se is not necessarily illegal. Political figures have friends outside government, and Park gave a stunningly personal account of how she gravitated to Choi as a result of concerns about maintaining overly-close ties with her own family.
But the charges are not simply about access; they center on Choi’s influence over appointments. The stories are stunning in their pettiness—particularly in the government’s intervention on behalf of Choi’s daughter Yura Chung. Although petty, the charges are not trivial. Because they relate to the treatment of civil servants, they are potentially violations of Article 136 (Obstruction of Performance of Official Duties), Article 137 (Obstruction of Performance of Official Duties by Fraudulent Means), and Chapter VIII (Crimes Concerning Obstruction of The Performance of Official Duties) of the Criminal Act.
We identify the bits of the case by the dramatis personae.
- Roh Tae-Gang, former Director-General of Sports Affairs, Ministry of Culture, Sports and Tourism and Chin Jae-Soo, former Director of Sports Affairs, Ministry of Culture. In April 2013, Choi's daughter received only below-average scores at the Korean National Equestrian Games. In May, the Blue House ordered a special investigation into this matter. In August, President Park appears to have personally summoned Minister Yoo Chin-Ryong (Ministry of Culture, Sports and Tourism), and singled out Roh and Chin as "very bad people." Yoo has stated on the record that he was forced to relegate Roh and Chin to lower positions. On Mar 2014, President Park followed up on this matter with Minister Yoo, and asked him why they are still allowed to be in civil service at all, and both Roh and Chin were subsequently forced to quit. (For reporting on this see here and here.)
- Korean Air. Choi allegedly intervened to force Korean Air (founded as a state-owned enterprise, but subsequently privatized) to promote an individual who would provide her with personal services. The promotion came after two direct phone calls from a Chief Presidential Secretary. (For reporting on this see here.)
- Blue House: Presidential Secretary for Petition. SBS reported on circumstantial evidence that Choi influenced the appointment of the Presidential Secretary for Petition. One of the documents found on the tablet allegedly owned by Choi previously indicated that Kwak Sang-wook was initially nominated for the job but after Choi's review Woo Byung-woo was appointed instead. Following Woo's appointment, Woo's family donated 100 million won to Ewha University, although his family formerly had no connection to the institution. (For reporting see here, here, and here.)
- Choi's son. Choi's son from her first husband has worked at the Blue House at the Chief Officer level (C5) although his only previous work history was as a temporary computer service technician. (For reporting see here.)
Access to Classified Materials
If Hillary Clinton is guilty of carelessness in the handling of classified material due to the existence of a parallel server, President Park as well as Choi appear to have violated a number of national security-related laws, including: Article 14 (Prohibition of Destruction, Removal, etc. without Permission), Article 19 (Prohibition of Leaking, etc. Presidentially Designated Records), and Article 30 (Penal Provisions) of the Act On the Management of Presidential Archives; Article 127 (Divulgence of Official Secrets) and Article 113 (Divulgence of Diplomatic Secrets) of the Criminal Act; and Article 12 (Leakage) and Article 13 (Leakage of Military Secrets in Performance of Duties) of the Military Secret Protection Act.
JTBC reported that there were more than 200 documents found on Choi's tablet, many of which contained classified information. Some examples include information pertaining to the appointment of the Chief of Presidential Security Service and the Chief Presidential Secretaries and transcripts of a conversation with the Australian Premier. But as early as last week, Hankyoreh could already catalogue a much wider array of foreign policy issues on which Choi might have had influence, from the President’s Dresden speech to the closing of Kaesong. While Choi is not a public official, she too can be treated as an accessory under the Criminal Act. (For reporting see here and here.)
The MIR and K-Sports Foundations
To us, by far the most serious claims against the President and Ms. Choi center on the establishment of the MIR and K-Sports Foundations. The reasons not only have to do with the “demand” side of the equation—the way monies might have been siphoned out of the foundations for the personal use of Ms. Choi or to provide a future perch for the President on her retirement. The real issue is on the “supply” side: what the 53 firms expected in return for funding these entities, which had vaguely-defined purposes. Every single one of the contributing firms is now under investigation, as is Ms. Choi and entities she established to siphon funding out of the foundations.
The origins of the foundations go back to a Cheong Wa Dae luncheon in February 2015, when President Park urged the gathered CEOs to expand their contributions to the country’s arts, culture and sports. A crucial issue going forward was whether this suggestion was acted on by over-eager staff or whether it was connected to a more direct order from the President to move the foundations forward. Ahn Chong-bum, former senior presidential secretary for policy coordination, is now also under arrest. He claims that Park was deeply involved in the establishment of the foundations from the beginning and even in the approach to the firms for contributions.
It is clear that the two foundations are shells. The bylaws, proceedings and minutes for the founding of MI-R and K-Sports have been found to be close to an exact match, and many of the participants recorded in the minutes were never present. If these were proven to be fabricated in order to obtain the approval from the Ministry of Culture, all of the personnel involved in establishing the foundations and soliciting the money, including Choi, Ahn and even the president, could be liable. (See here for reporting).
One of the first cases to leak suggests how the process worked, even though the firm in question did not end up supporting the two entities. In a meeting in February, the head of the Booyoung group met with head of K-Sports Jung Hyun-sik, who solicited a $7 million contribution. After agreeing to the donation, the head of Booyoung asked if he would be “well covered” in an upcoming tax audit. Choi Soon-sil subsequently instructed the foundation not to take Booyoung money, and Booyoung denies that it solicited a favor or contributed to the foundation. But even if the facts in this particular case remains to be sorted out, you can see how the process might work. On the one hand, firms could be demanding favors; on the other hand, the Blue House might have been using its discretion to effectively extort contributions; the Korean press is already pulling on the threads of possible quid-pro-quos. A number of the country’s largest groups appeared to have been in the game, including Hyundai Motor Group, SK, LG, POSCO, Lotte, GS and Hanwha; all are going to be meeting with prosecutors.
Where was the money going? In some cases—including Samsung—it appears that some of the contributions might have been made directly into companies held by Ms. Choi; it is hard to imagine any reason why this would take place in the absence of either a threat or an inducement. In addition, questions have now been raised about loans to Choi-owned entities in Germany and whether laws governing the reporting of foreign exchange transactions were also breached. Some of the loans to her companies—including from KEB Hana Bank—do not appear to have appropriate collateral.
But the porousness of the foundations themselves is also under investigation, as there are allegations that funds from K-Sports Foundation went into TheBlueK, an entity owned by Choi. Thankfully, this would constitute a case of pretty straightforward embezzlement. But adding to the lurid appeal of the scandal are suggestions that the head of Choi’s front companies was also her "boy toy," a fencer who had met Choi while working the bars of Gangnam as a host. (See reporting here, here, here, and here.)
As with all scandals, there are second-order scandals and one of them that is brewing as this goes to press is whether the prosecutors are going easy on Choi. The Prosecutor's office initially charged Choi only as an accessory to Abuse of Authority (Article 123, Criminal Act) and Fraud (Article 347, Criminal Act). The opposition party immediately protested, since the bribery charges, which carry a much stiffer penalty, are missing.
Last but not least, there is a string of malfeasance surrounding Choi’s daughter’s involvement with Ewha University, starting with bribes to get her admitted in the first place. Once there, Choi allegedly demanded special accommodation, including changes to the school's regulations on absences and grading; Choi even managed to get her daughter’s supervisor replaced and harangued the head of the Sports Department to resign. Yoora Chung’s response, posted on Facebook: "being loaded is also one's ability. Blame your parents for being plebs." That about sums it up.
Legal Liability and the Politics
Under Korean law, the president is immune from prosecution while in office [Constitution Article 84, Section 1 The President, Chapter IV The Executive of the Constitution: “The President shall not be charged with a criminal offense during his tenure of office except for insurrection or treason.”] Yet although she cannot technically be charged with an offense, the prosecutor’s office still has the right to open investigations, Park appears to have admitted to Choi’s guilt and she has said not only that she will cooperate with other investigations but if appropriate she herself can be investigated. We are in uncharted territory: no one really knows what that means, and the endgame of this is more likely to be political than legal.
Next time, the politics.