Will jailed tycoons get pardon?

President Park Geun-hye bangs a gavel to start a Cabinet meeting at the presidential office in Seoul, Sept. 16. Her Cabinet members recently hinted the President may pardon jailed tycoons to help reinvigorate the sagging economy. / Yonhap

Top policymakers hint at dropping zero-tolerance principle

SK Group Chairman Chey Tae-won

CJ Group Chairman Lee Jay-hyun

Hyosung Group Chairman Cho Suck-rai

By Park Si-soo

Top policymakers are hinting the Park Geun-hye administration may pardon jailed tycoons in the hope that they will help reinvigorate the sluggish economy.

President Park and her lieutenants have focused on carrying out deregulation to reinvigorate the economy and to encourage top chaebol to expand investments.

But domestic consumption remains sluggish and top conglomerates remain reluctant to use their cash reserves.

Most of the President’s stimulus steps during her first two years in office have gone awry.

Her much-anticipated “joint prosperity” policy for small and big companies and her “creative economy” are widely considered ineffective.

Another move to help the economy rebound ㅡ resuming trade with North Korea ㅡ faded due to the Sewol ferry disaster in April, which pushed the whole nation into a state of grief and froze spending for months.

Korean presidents tend to start falling into lame-duck status midway through their five-year terms.

With that time fast approaching, Park seems determined to begin a new stimulus drive at the cost of breaking a core campaign pledge: zero tolerance for corrupt business leaders.

“Presidential pardons should not be abused ㅡ particularly tycoons convicted of corruption should not benefit from this,” Park said during her presidential campaign.

However, policymakers seem to have become sympathetic to granting special pardons for tycoons in the belief that their return to the boardrooms would revive investment and boost the economy.

On Wednesday, Justice Minister Hwang Kyo-ahn was quoted as saying in an interview, “With people’s worries about the economy running high, I feel the need to give jailed business leaders an opportunity to make contributions to the economy.”

He made it clear that convicted tycoons would not be put at a disadvantage when it came to parole.

“I would like to say that business leaders can be subject to parole,” he said. “Even if they did something wrong in the past, they can be given an opportunity to make contributions to the country in the form of job creation and investment.

“But doing so will be possible only when the general public turns supportive (of this).”

His comments immediately raised speculation that the government was considering amnesty for CEOs who are in prison or facing trial. These include SK Group chairman Chey Tae-won, CJ Group chairman Lee Jay-hyun and Hyosung Group chairman Cho Sunk-rai.

The justice ministry stressed that the minister was giving a personal opinion, and that the ministry had no plan to release any business chiefs early.

Pardoning CEOs has always been controversial in Korea, with critics charging that they use their wealth and protection to get away with just a slap on the wrist.

But the next day, Finance Minister Choi Kyung-hwan, a close aide to the President, added more fuel to the controversy by supporting the justice minister.

“I agree with Hwang’s opinion,” Choi said on Thursday. “Of course, business leaders should be punished for violating laws, but it will not help revive the economy if the laws are enforced too strictly just because they are business leaders.

“At a time like now when economic recovery is slowing due to sluggish corporate investment, I completely share the view expressed by the justice minister, who is in charge of law enforcement.”

Critics say such back-to-back comments indicate that the government is trying to create an atmosphere favorable to pardoning some CEOs.

Chey was sentenced to four years’ jail for embezzling billions of won of SK Group money. Lee was sentenced to three years’ jail for creating a slush fund.

The SK Group claimed its chief’s absence has derailed many profitable projects and postponed investment.

“A large-scale investment needs a lot of consideration and study,” an SK executive said. “With our chairman behind bars, it's practically impossible to draw up such a plan and carry it through.”

CJ Group claims its investments in the first half of the year were down 30 percent year-on-year as a result of its leadership vacuum.

Hyosung says its leader’s conviction has hurt the company’s credibility, which has impeded some international projects.

Reacting to the justice minister's comments, the main opposition New Politics Alliance for Democracy said Hwang was essentially suggesting the rich should be above the law.

“We cannot tolerate his remarks, especially coming from a justice minister,” a party statement said.