The Dominoes Are Falling in S. Korea : Growing graft case could bring down a number of leading politicians and businessmen

The web surrounding the huge slush fund controlled by former South Korean President Roh Tae Woo during his term in office is likely to ensnarl a number of other top politicians and leading business executives. A high level of graft and corruption has been exposed, and prosecutors are aggressively pursuing the case. This marks a major break from the past, when it was no secret in South Korea that bribes to politicians helped to secure government contracts or monopoly privileges.

Roh is properly contrite and apologetic as he sits in a jail cell. He has admitted amassing the $653-million slush fund when he held the presidency from 1988 to 1993 and that he pocketed more than a third of the money. The arrest warrant against the 62-year-old former army general charged him with accepting millions from the Daewoo group, one of South Korea’s largest industrial combines, in return for a government contract to build a submarine depot. The warrant alleged that Roh also received hundreds of millions more from 30 top companies. Roh says he accepts full responsibility. If convicted, he could face 10 years to life in prison.

Now all eyes turn to corporate Korea, the powerful business conglomerates known as chaebols. Kim Woo Choong of the Daewoo Group and Choi Won Suk of the Dong Ah Group were the only tycoons implicated by name in the arrest warrant against Roh.

The money track in the scandal could lead to other people in government and politics. Kim Dae Jung, the opposition party leader long identified with the campaign for democratic reform and honest government, has admitted accepting $2.6 million from Roh. The opposition leader has alleged that money was accepted by the current president, Kim Young Sam, as well. The president denies the allegation.

Kim Young Sam, the first president in more than 30 years without a military background, is seen as having made clean government a priority. His administration has moved swiftly since it was disclosed last month that Roh had a secret bank account. Roh’s arrest Thursday marks the first time prosecutors have gone after a former South Korean president for actions he took during office. This is a major step in the democratization of South Korea. It sends a powerful message that the corrupt links between politicians and business are to be severed.

The credibility of the government will suffer in the short term, but the economy over the long term will benefit if freed from the graft that has stifled competition and distorted markets. The citizens of South Korea may well be at the threshold of a promising new era.