In reversal of tradition, South Korean president unlikely to pardon Samsung scion

Reporting from Seoul —  It’s become a ritual for South Korean business tycoons who break the law: charges of corporate malfeasance, an apologetic bow for the television cameras and perhaps a little jail time.

But for many of these titans, there is a different ending: a presidential pardon.

The last four South Korean presidents have granted amnesty to scores of executives, including heavyweights at the nation’s largest and most influential firms, including Hyundai, Lotte and Samsung.

But that pattern, a relic of South Korea’s economy-first ethos, could be changing.

Clemency is unlikely for Lee Jae-yong, the Samsung scion sentenced to five years in prison on Friday for a bribery scheme involving disgraced former President Park Geun-hye, according to political analysts.

That’s largely because the conviction and sentence were more severe than other recent corporate malfeasance cases. But it’s also because pardoning Lee might be too toxic politically for the nation’s new president, Moon Jae-in.

He came to power in May after a historic corruption scandal involving his impeached predecessor, Park, and her alleged illicit ties to companies such as Samsung.

“The problem is public sentiment. Moon is not going to pardon Lee if it’s unpopular,” said Michael Breen, whose book, “The New Koreans: The Story of a Nation,” explores the country’s recent economic, political and social development. “It all depends on what the mood is.”

Samsung is the biggest company in South Korea by a wide margin and among the world’s largest manufacturers of electronics. Lee, whose grandfather founded it, became its de facto leader after his father, who is credited with turning it into a global leader, suffered a debilitating heart attack in 2014.

The younger Lee was convicted of paying millions of dollars to an associate of the former president to win support for a merger between two of the company’s affiliates.

The merger effort was seen as a way to secure Lee’s dynastic control over the group, which includes flagship Samsung Electronics but dozens of other affiliates, including insurance, automotive and healthcare companies.

The bribery scheme was a key factor in the removal of Park, the daughter of South Korean dictator Park Chung-hee. She is accused of colluding with a friend to extort bribes from several companies, a scandal that led to months of historic street protests and her removal.

Park Geun-hye granted more than 16,000 pardons during her presidency, mostly to petty offenders, but some for elite business executives. She now faces her own lengthy prison term if convicted of bribery and other corruption-related charges during her trial, which is expected to end in October.

The pardons are part of a legal system that has granted amnesty to tens of thousands of ordinary South Koreans over the years. Most beneficiaries were traffic offenders or other minor criminal offenders — but plenty have hailed from the nation’s highest echelons of corporate power.

Pardons of executives at family-controlled conglomerates — known here as chaebol — have been common over the last two decades, according to a study published this summer in the Yonsei Journal of International Studies that reads like a who’s who of corporate influence here.

There was Lee’s father, of course, who was pardoned by President Lee Myung-bak in 2009 after a conviction for tax evasion and embezzlement. And there is Chey Tae-won, the SK Group chairman, who spent time in prison for misappropriating corporate funds and was pardoned by Park in 2015. He remains the company’s chairman.

The pardons are generally justified publicly as efforts to spur the economy.

But the study found a general decline in recent years in pardons, especially those considered controversial because they involved business leaders, politicians or associates of a president. The last two presidents, for example, avoided pardons involving executives accused in corruption cases.

The research suggests the downward trend has less to do with the personal character of the recent presidents than with public sentiment that’s grown increasingly wary of corporate misdeeds.

Park Geun-hye took the toughest line when it came to issuing pardons of any recent president. She declined to grant clemency to other political leaders, regardless of the crime, and she only helped business executives accused of financial impropriety, not more serious corruption offenses.

“Granting less pardons doesn’t mean you’re less corrupt,” said Felicia Istad, a doctoral student at Korea University who conducted the study. “It just means you’re more wary of the public perception.”

The changing mood comes as the nation, which quickly rose from poverty after the Korean War to become Asia’s fourth-largest economy — behind China, Japan and India — confronts growing inequality in how that prosperity has been distributed.

With relatively high youth unemployment, household debt and income inequality, corruption has become a galvanizing political issue.

The sentiment has led to renewed calls for reform at South Korea’s powerful chaebol, which control a massive chunk of the nation’s economy but whose power can foster resentment among the less fortunate.

The national mood leaves Lee Jae-yong — one of the country’s wealthiest and most-powerful men — more likely to serve his time, assuming his case isn’t reversed on appeal.

“A pardon is not very likely, in my opinion,” said Park Sangin, an economics professor at Seoul National University. “It would be a huge setback in terms of public opinion.”

Stiles is a special correspondent.