New Bribery Allegation Roils Samsung
SEOUL, South Korea, Nov. 19 — Samsung, which has vigorously denied bribery charges in a snowballing corruption scandal, sustained another blow to its image on Monday when a former legal adviser to President Roh Moo-hyun said the company had once offered him a cash bribe.
The former aide, Lee Yong-chul, who also served as a presidential monitor against corruption, said that the money — 5 million won ($5,445) — was delivered to him in January 2004 as a holiday gift from a Samsung Electronics executive, but that he immediately returned it.
Before sending it back, Mr. Lee said, he took pictures of the cash package, which were released to the news media on Monday.
“I was outraged by Samsung’s brazenness, by its attempt to bribe a presidential aide in charge of fighting corruption,” Mr. Lee said in a written statement released at a news conference by a civic organization. He did not attend the event.
James Chung, a spokesman for Samsung Electronics, said, “We are trying to find out the facts around these allegations.”
Samsung Electronics is the mainstay of the 59-subsidiary Samsung conglomerate and a world leader in computer chips, flat-panel television screens and cellphones.
Mr. Lee’s accusation appeared to support recent assertions by a former chief lawyer at Samsung, Kim Yong-chul, that the conglomerate had run a vast network that bribed officials, prosecutors, tax collectors, journalists and scholars on behalf of Samsung’s chairman, Lee Kun-hee.
Prosecutors are investigating Mr. Kim’s accusations, and political parties have introduced legislation that would establish an independent counsel.
Opposition political parties say an independent prosecutor is needed because Mr. Kim identified the president’s new chief prosecutor, Lim Chai-jin, as one of many prosecutors to have received bribes from Samsung. Mr. Lim denied the assertion.
President Roh’s office dismissed the call for an independent counsel as an election-year political maneuver. The South Korean presidential election is scheduled on Dec. 19.
As the scandal expanded, the chairman, Lee Kun-hee, was absent Monday from a ceremony commemorating the 20th anniversary of the death of his father, Lee Byung-chul, Samsung’s founder. Company officials cited a “serious cold and illness from fatigue.”
Lee Yong-chul, the former presidential aide, now a partner at a law firm in Seoul, issued his statement and pictures through the National Movement to Unveil Illegal Activities by Samsung and Its Chairman, an organization that was started by civic groups after Mr. Kim’s allegations were made public.
Calls to Mr. Lee’s office were not returned on Monday.
“This is proof that Samsung’s bribery has reached not only prosecutors but the very core of political power, the Blue House,” the group said at the news conference, referring to the South Korean presidential office. President Roh’s office called that assertion “pure speculation.”
Mr. Lee said the bribe he received in 2004 was delivered after an executive at Samsung Electronics asked him whether his company could send him a holiday gift. Mr. Lee said he accepted, thinking that it would be a simple gift.
He said that when he returned the money with a protest, the Samsung executive apologized. The executive said he had simply allowed his company to send the gift in his name and had not known it contained cash, Mr. Lee related.
The executive could not be reached for comment. Samsung said the man left the company in June 2004 and now lived in the United States.
Lee Yong-chul said he decided to go public after reading about the lawyer Kim Yong-chul’s whistle-blowing. He said he believed Mr. Kim’s assertion that Samsung had run a systematic bribery effort.
Samsung has denied Mr. Kim’s allegations as “groundless.” A couple of Samsung executives Mr. Kim accused of delivering bribes have sued him.
In his statement, Lee Yong-chul said the cash was delivered to him while prosecutors were investigating assertions that Samsung and other conglomerates had provided large amounts of illegal campaign funds to presidential candidates during the 2002 election, which Mr. Roh won.
Several campaign officials for Mr. Roh and his opponent, Lee Hoi-chang, as well as Samsung executives, were convicted of playing major roles in raising slush funds in that campaign.
Bribery, Massive Corruption at Samsung, Says Exposé by Former S. Korean Prosecutor
. . . In addition, a lawmaker said she had once been offered a golf bag full of cash from Samsung, and a former presidential aide said he had received and returned a cash gift from the company.
Lee Kun-hee, the chairman of Samsung, was convicted of hiding more than $42 million from tax collection, and received nothing more than a suspended sentence. The media decided not to mention the whistle-blowing book at all, despite it achieving remarkable sales for a non-fiction book in that country. (Not a single newspaper published a review, and the only discussion of the book mentioned its sales--but not its title or author. Yeah, you read that right. They left out the title.) Even worse, the media refused to print any op-eds or articles explaining, let alone backing, Kim Yong-chul's side, out of fear that Samsung would pull advertisements from their TV shows and newspapers.
South Korea makes example of Samsung corruption
Samsung has been publicly forced to get its act together to stamp out corruption, with the South Korean government choosing to make an example of it.
According to a top industry consultant familiar with the company, Samsung's legal "philanderings" are no secret. While other companies are also at it, the South Korean government is keeping them safe as it looks to drive revenue and reputation to the country.
The comments come as news of shadiness inside Samsung spreads, after an inspection found that elements of the company were involved in corruption.
The findings led to CEO Oh Chang-Suk stepping down and Lee Kun-Hee, chairman of the company, claiming there would be some managerial changes.
However, he would not specify what the investigation had uncovered - only saying that it included taking bribes and enjoying hospitality from suppliers. He said the "worst type" of abuse was pressure on junior staff to commit corrupt acts.
"Corruption and fraud" at Samsung Techwin came about accidentally, and was a result of a "complacent attitude during the past decade", he told reporters
This isn't the first time Samsung has been alleged to have its hands in the till. In 2007 the company's former executives accused it of bribing police and politicians to stop probes into its management, while in 2009 the chairman, along with nine other senior executives, were indicted on tax dodging charges.
According to our analyst, speaking under condition of anonymity, these are well known facts.
"Let's be honest, Samsung's philanderings are not a secret, the company has been at it for years," he said.