hankyoreh

Samsung Electronics Vice Chairman Lee Jae-yong bows to the South Korean public ahead of the first hearing of his bribery trial at the Seoul High Court on Oct. 25. (Park Jong-shik, staff photographer)

The crux of the Supreme Court’s ruling was clear. In August last year, the Supreme Court ruled that Samsung Electronics Vice Chairman Lee Jae-yong had actively bribed former President Park Geun-hye in the hope of receiving assistance in the succession of management rights. The court viewed the incident as a case of cozy and corrupt relations between the highest levels of political and economic power in South Korea. The sum embezzled by Lee and handed over in bribes also climbed from 3.6 billion (US$3.08 million) to 8.6 billion won (US$7.37 million). Under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, embezzlement of more than 5 billion won (US$4.28 million) is punishable by life imprisonment or a prison term of at least five years. Following the Supreme Court’s ruling to quash and remand the case, the possibility of a stay of execution in the retrial is slim, unlike in the high court.

The remand court, which must be aware of this, is now leading the trial in the wrong direction. In the first hearing in October last year, presiding Judge Hon. Jung Jun-yeong premised his argument by stating “[The existence of a compliance monitoring system] is unrelated to the process and result of this trial,” followed by “If the Samsung Group had an established internal compliance monitoring system that struck fear into even the company leaders, the defendant could not even have contemplated this crime” and “I hope that [Samsung] will refer to the effective monitoring systems implemented by large American corporations in accordance with chapter eight of the US Federal Sentencing Guidelines.”

Samsung announced plans to set up a compliance monitoring committee on Jan. 2. In the fourth hearing held on Jan. 6, Lee’s lawyer briefed the court on how the compliance monitoring committee would be run, and Jung changed his tune, noting, “If the compliance monitoring committee is operated effectively, it could be considered during the sentencing.” Were it not for suspicions that the script for “a suspended sentence for Lee Jae-yong” had already been written before the trial began, this would be unusual.

Chapter eight of the US Federal Sentencing Guidelines outlines the standards for the “Sentencing of Organizations.” It was created to apply to crimes committed by enterprises engaging in business activities in pursuit of corporate income. In contrast, Lee’s offense is an individual crime. He caused immense damage to the company in an attempt to pursue personal gain through succession of management rights, so it was misguided to apply chapter eight of the US Federal Sentencing Guidelines to his trial in the first place. Furthermore, the purpose of these provisions is to reduce the penalty imposed when an enterprise with a functioning compliance monitoring body commits an illegal act. It does not grant reduced sentences to organizations that set up a compliance monitoring body after the fact.

In the South Korean Supreme Court sentencing guidelines for embezzlement, no reference is made to a compliance monitoring body. The provisions list 17 mitigating grounds on which a sentence may be reduced, including passive crimes committed under pressure, restitution, crimes committed purely for company profit, being mentally or physically unfit, crimes committed for the purpose of maintaining one’s livelihood or paying medical bills, and genuine remorse. The only ground on this list that appears applicable to Lee is restitution from paying back the embezzled funds.

On the other hand, of the 10 grounds listed for an aggravated sentence, including a highly repugnant criminal method, inciting subordinates, covering up evidence and crimes committed for the purpose of strengthening one’s power or protecting one’s position, nearly all seem applicable in this case. Under the Supreme Court’s sentencing guidelines, the establishment of a compliance monitoring committee should not be taken into consideration and Lee should be subject to an aggravated sentence.

Furthermore, the repeated illegal acts and corruption of the Samsung’s ruling family did not arise due to the absence of a compliance monitoring committee. In response to the “X-files scandal” of 2005, Samsung created the “group for watching over Samsung” that consisted of external personnel. After the slush fund scandal of Samsung Chairman Lee Kun-hee in 2008, the company announced a “zero tolerance compliance policy” and introduced a “program on law-abiding management” at its subsidiaries. In line with the Act on Corporate Governance of Financial Companies and the Commercial Act, Samsung’s financial subsidiaries such as Samsung Life Insurance now have compliance officers, while non-financial subsidiaries including Samsung Electronics have compliance assistants.

However, with prosecutors turning a blind eye during investigations and courts handing down nothing but a slap on the wrist, it is reasonable to believe that the illegal acts and corruption of the president’s family have not been rooted out. If Lee Kun-hee had received a punishment commensurate with his crimes, perhaps his son Lee Jae-yong would never have ended up in court.

During the trial, presiding Judge Jung stated “This is a case of embezzlement and bribery that was planned and carried out by the highest level of the Samsung Group’s management and executives.” This cuts to the heart of the matter, and if this is the case, all that needs to be done is carry out the trial in line with conscience and the law. This is not the time to wave around the US Federal Sentencing Guidelines and make claims that defy logic.

“Law-abidance” simply means abiding by the law, and breaking the law should be met with an appropriate punishment. It is illogical to espouse the virtues of following the law while attempting to escape from a lawful trial. In order to be qualified to talk about law-abidance, one must first pay the price for any crimes committed. We are now 20 years into the 21st century. How much longer must Korea continue to lament wrongful convictions for innocent people without money while wealthy criminals walk free?

By Ahn Jae-seung, editorial writer

Please direct comments or questions to [english@hani.co.kr]