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Businesses Government The Almighty Buck The Courts News Technology

Samsung Caught Bribing Government Officials 136

Dekortage writes "Allegedly, electronics giant Samsung Electronics attempted to bribe a South Korean government official with 5 million won (US$5,445). Ironically, the official was Lee Yong-chul, who was a presidential monitor against corruption at the time. This is the latest allegation against Samsung, which was recently accused of running 'a vast network of bribery through the government, the judiciary branch and the news media' that reaches all the way to South Korean President Roh Moo Hyun."
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Samsung Caught Bribing Government Officials

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  • by telchine ( 719345 ) on Tuesday November 20, 2007 @09:23AM (#21419815)
    Who's going to pay me not to criticise them in my comment?
    • by JPriest ( 547211 )
      They also do a great deal of business in the US but I knew before reading the summary that if they are in trouble for it, it is clearly the South Korean government.

      In the US bribing the government is not illegal and we havea different term for it: lobbying

  • by elrous0 ( 869638 ) * on Tuesday November 20, 2007 @09:24AM (#21419823)
    Hey Samsung, you don't bribe OUTRIGHT! The smart way to do it is through major contributions to "non-political" nonprofits (like "Focus on the Family" or moveon.org) and hosting generous fundraisers for candidates where all your employees and anyone else you can muster show up at $2,000 a plate.

    Geez, handing a politician an actual suitcase full of cash went out with Huey Long. The smart companies figured out long ago that there were much better, technically legal, ways to bribe their politicians.

    • by 15Bit ( 940730 )
      But thats the US. Different cultures, different bribes.
      • by Asmodai ( 13932 ) on Tuesday November 20, 2007 @09:44AM (#21420127) Homepage
        Oh that's so true.

        In South Korea and Japan giving gifts to business acquaintances is very common. Here in the Netherlands and some other countries such things are commonly forbidden in employee contracts as they're considered bribes.

        That's the problem of viewing events only from your local cultural perspective.
        • Re: (Score:3, Funny)

          by elrous0 ( 869638 ) *
          This guy wasn't a business acquaintance though, he was a government official (charged with rooting out government corruption, no less). And they weren't even smart enough to give him a GIFT (like jewelry or a TV or something). It was an actual honest-to-god pile of cash.

          I'm pretty sure bribing government officials with large bundles of cash is legally frowned on in most industrialized countries.

          • Yeah, I mean the bastards were too lazy to buy the official the high class hooker directly! He had to go take his cash, head down to the brothel, you get the idea. The nerve of some people!
          • Re: (Score:3, Informative)

            by Admiral Ag ( 829695 )
            I live in Korea. Bribery is a way of life in business here. It used to be far worse. Lee Myung Bak, the conservative candidate for the upcoming presidential election is being hounded for corrupt business practices from decades ago. I don't like the guy, but this is unfair, since you simply couldn't be in business at the time without engaging in massive bribery. To its credit the government has essentially declared war on graft, but old habits die hard. A few companies have apparently sworn to avoid it as we
        • We don't give gifts in holland, just seats on the board of directors. Check out what all the politicians are doing after they retire and then look back at some of the decisions they made just before retiring.

          Ever wondered why that building corruption scandal was so poorly dealt with? Just wait for the people involved to reach retirement age. You will get your answer.

    • by evilviper ( 135110 ) on Tuesday November 20, 2007 @09:34AM (#21419969) Journal
      Even better: give government officials high paying jobs in your company, the day they leave office.

      Maybe even jobs where they directly lobby the government in your company's interests.
    • You left out think tanks. The smart companies fund "research" institutions to explain why they should receive more government contracts.
    • Geez, handing a politician an actual suitcase full of cash went out with Huey Long. The smart companies figured out long ago that there were much better, technically legal, ways to bribe their politicians.

      Yeah, I mean, you'd think they'd know that in Korea, cash bribes are for old people.

    • As a frequent listener to the program (are you?) Focus on the Family is non-political. Focus is a charitable organization which is set up in such a way that contributions are tax-deductible. Due to rules governing this type of enterprise, they are prohibited from endorsing candidates.

      There is another organization called "Focus on the Family Action" which is a political action group. Contributions to that organization are *not* tax deductible, and they can be used for overt political purposes. If you hea
      • Re: (Score:3, Insightful)

        by WindBourne ( 631190 )
        And as somebody who lives in their back yard, what you say is incorrect. Dobson has been cuaght a number of times pushing candidates and ppl just below him pushing all sorts of money. The only difference between MoveOn, Club for Growth vs. Moral Majority, the Catholic church, and FotF, is that the later pretend to be about religion. They are ALL about pushing their agendas.
        • Physical proximity does not mean that you have facts.

          Please list explicit examples of Dobson and his team doing unethical things. I challenge you on this point, because I don't believe you can do it.

          There is no question that Focus on the Family has an agenda. Their agenda is social rather than political, and they have gone to great lengths and great expense to separate political activities from social activities.

          Love him or hate him, James Dobson is a man who lives and dies by his integrity to his beliefs
    • >The smart companies figured out long ago that there were much better, technically legal, ways to bribe their politicians.

      Youer so cool and cynical. You must get all the girls/boys.

      At least Lobbying is transparent. We can see who is giving to whom. Bribery is completely invisible. They two are alike but far, far from the same. One is a legitimate process and the other isnt. Thats how the world works. Moneid interests influence politics. Better out in the open than behind closed doors.
    • i keep my cash 'crispy and fresh' by wrapping it in $10,000 stacks wrapped in tin foil and kept in the freezer!

      regards,

      Rep. William "J. for 'Just keep it crispy'" Jefferson
    • In South Korea, it is forbidden by the law for companies to support a politician financially.

      That's the problem of viewing events only from your local law's perspective.
  • South Korea (Score:5, Insightful)

    by Junky191 ( 549088 ) on Tuesday November 20, 2007 @09:27AM (#21419867)
    I've spent enough time there to know that token respect bribes are just a part of how business gets done. I'm sure most of the large corporations are doing the same, it just seems Samsung slipped up and got caught.
    • by tsj5j ( 1159013 )
      In some countries, you have to bribe to get things done quicker/easier. Otherwise, you lose competitive edge. With the many companies Samsung has to compete with, they doubtlessly cannot afford to be behind. Note that I'm not say that it's right. It's just that they have their employees and survival to take care of too. It's just like in a world of nuclear weapons, not building some for protection is foolish.
    • Yes, it doesn't sound like a real bribe to me. 5000$? Real bribes are quite a bit higher than that, on that level of bureaucracy 5000$ is petty cash. Real bribes move more in the 50000-500000$ area.

      I know, being from Spain, land of the fee and home of the bribe.
    • Mmm, this is just a storm in a teacup. The politicians have to pretend to be outraged every so often, but the entire economy is predicated on passing bribes. If they really stopped taking bribes, then their salaries would have to rise sharply in order to support the lifestyles of their families and mistresses, and I don't see South Korean taxpayers being too happy about that either.
      • "The politicians have to pretend to be outraged every so often, but the entire economy is predicated on passing bribes. "

        Bingo! Absolutely correct.

        This is why the amount was so small, and why a relative functionary was the bribee. Simply a token bust to keep the press off their digital asses.

        I worked for Samsung Electronics in Suwon from 1999 to 2003. There was a big bribery dust up in 2001 that led to yet another internal campaign designed to educate employees, etc. As a high-profile foreigner, w
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      I'd expect it's as big a part of their culture as China.
      Hardware certification testing for example, and most certainly all the recently recalled toys, are all effected by this, companies doing 'testing' in China, even if their management aren't aware of it, are often not actually testing products at all, a bribe is paid to an test engineer, the paperwork is done.

      There are Chinese staff (in China) that are having to be told by international investors, to stop taking bribes (effectively halving their wage) ot
  • by swb311 ( 1165753 ) on Tuesday November 20, 2007 @09:29AM (#21419891)
    That it was $5,000 worth of old Samsung CRTs.
    • by Bearpaw ( 13080 )
      No wonder they got nicked. First rule of bribery: never insult the person you're trying to bribe, especially when they're an anti-corruption official. Such people need particularly high, er, polite bribes.
  • It may seem stupid or risky but if you're going to keep a bribe net and ignore the one assigned to check it, you're bound to fail.

    I think the whole problem started with the $5,445 mistake. Everyone has a price, if you can't or simply don't want to afford it, don't try with a smaller amount.
    • by RandoX ( 828285 )
      But 5 grand could still be written off as a 'gift'. Plausible deniability.

      "Bribe? What bribe? That was a holiday gift."

      If they dropped $250k in his lap, that's a bribe. Hard to talk your way out of that one.
    • Re: (Score:3, Insightful)

      by elrous0 ( 869638 ) *
      It's the classic Homegrown [imdb.com] dilema. Bribe the cop too much, and he expects it from them on. Bribe him too little and he is insulted and busts you.
  • by digitaldc ( 879047 ) * on Tuesday November 20, 2007 @09:29AM (#21419903)
    ...also known as Washington lobbyists in the United States.
  • by b96miata ( 620163 ) on Tuesday November 20, 2007 @09:30AM (#21419911)
    This is unheard of. We must stop samsung before this sort of behavior spreads and becomes endemic to countries in the region.
  • it's somehow amazing how stupid some people can be, and doubly so when you look at companies, where there really should be some checks and balances in place.

    but come on... a ~$5000 bribe? if you want to bribe me, you'd better cough up more than that

    but seriously, What would samsung write that off as when the auditor came to visit? (or more likely would they just bribe the auditor as well)
    • but seriously, What would samsung write that off as when the auditor came to visit? (or more likely would they just bribe the auditor as well)

      Hell, that's petty cash for a few lunches with some bigwigs. And whoops, the guy in charge forgot to get receipts.
    • In Korea, "stupid" is not offering a bribe.

      $5000 is about right. It's easy to spend, it's not too big to make the recipient nervous about how much is expected, and it's not too small to insult them. Unless they're on an anti-bribery crusade, of course, which I assume is just a political ploy to get into higher office and therefore receive real bribes.

      It's all filed under 'hospitality', and accepted as such. You shouldn't assume that auditors follow the same standards globally.

    • by guruevi ( 827432 )
      Well, you have to account for the differences in economy though. $5000 these days is not much for us, but 100 years ago, $5000 would've bought you Manhattan (I am exaggerating, I know, but it's for the sake of example). In those countries (I haven't checked on S. Korea) it might be that official's yearly income. How would you feel if somebody cut you (by comparison) a $100,000-$200,000 check just to let something small disappear?
      • If I remember right, Manhattan was only worth 20.
      • I would suspect that the something small wasn't so small after all -- it is, after all, worth a lot of money to somebody -- and that (for example) I might be about to make myself an unwitting accessory to murder. Or something else. Of course, that's still a lot of money. Like most people, I have no idea what would happen (but if you have a hundred grand and you'd like to find out, by all means ... :)
  • by Doc Ruby ( 173196 ) on Tuesday November 20, 2007 @09:31AM (#21419929) Homepage Journal

    Ironically, the official was Lee Yong-chul, who was a presidential monitor against corruption at the time.

    That's not "irony". That's evidence that Samsung was also bribing or otherwise corrupting the government that Lee was paid not to monitor.

    Even Alanis Morissette [lyrics007.com] knows that bribing a cop to freely rob a house isn't "ironic".
    • That's not "irony". That's evidence that Samsung was also bribing or otherwise corrupting the government that Lee was paid not to monitor.

      Are you kidding? This is the very essence of irony. The anti-bribery guy was (allegedly) bribed. It's very much like the firemen accidentally burning down the firehouse.

      • Re: (Score:1, Troll)

        by Doc Ruby ( 173196 )
        No, not all hypocrisy is irony [reference.com]. Irony is when words convey a different meaning contradicting their literal meaning, not when the literal meaning is meant to be conveyed, but merely subverted by actions. The sense of "surprise" (events contradicting expectations) is very weak, and abused in frequently using "irony" to describe it. Which is, I suppose, ironic.
    • Ironically, the official was Lee Yong-chul, who was a presidential monitor against corruption at the time.

      That's not "irony". That's evidence that Samsung was also bribing or otherwise corrupting the government that Lee was paid not to monitor.

      No, that's pretty much the definition of irony, though the writer messed up when ordering their sentence. It should have read:

      Ironically, the bribed official was a presidential monitor against corruption named Lee Yong-chul.

      See the difference there? There's not

      • That's the ironic part -- it turns out that a presidential monitor against corruption was indeed corrupt!

        And if you'd bother to RTFA, you'd see that the presidential monitor against corruption was not corrupt at all--he's one of the people saying that Samsung tried to bribe him, but that he refused it. Which means that there is no irony at all, since the guy who's against corruption proves himself not to be corrupt.
        • Please, read into it a little deeper.

          Government official accepts offer of gift, but returns it when he sees it is cash, not items (Cash raises a red flag -- maybe he thought he was being targeted by an investigation). Does not file complaint, does not report to his superiors, does nothing until someone else goes public and it appears he may be caught up in the investigation.

          This is not the case of a whistle-blower doing a public service; this is the case of a guilty party (who freely admits accepting the
      • by mpe ( 36238 )
        There's nothing ironic about some guy $NAME being bribed, but, one would expect that an offical designated as a monitor against corruption would be incorruptible. That's the ironic part -- it turns out that a presidential monitor against corruption was indeed corrupt!

        Really? Sounds like he refused the bribe whilst documenting the bribary attempt.
        • He came forward when it appeared that he might get caught up in the investigation. This reeks of CYA. Furthermore, his documentation of the bribe reeks of extortion/blackmail -- and any value of his information for blackmail was lost as soon as another whistleblower came forward.

          The article paints a pretty clear picture that this guy is not straightlaced. There's a reason he admits to accepting the offer of a gift, and downplays it. He knew how the game was played, and played it well -- and now he's co
    • by fearpi ( 1100889 )
      The use of words expressing something other than their literal intention. Now that - IS - irony!
    • by Chrisq ( 894406 )
      Of course a monitor against corruption is the ideal position to be in if you want to receive bribes. As soon as you discover a bribe you can report it or ask for a cut.
      • Re: (Score:1, Troll)

        by Doc Ruby ( 173196 )
        But then you can never demand another bribe, because the briber can switch to mere blackmail. And the blackmailer can demand to keep as much as they want of the bribes they force you to demand from others. A good corrupt official can work that edge, though. I believe that used to be offered as a minor in some Confucian civil service schools.
  • by UbuntuDupe ( 970646 ) * on Tuesday November 20, 2007 @09:31AM (#21419933) Journal
    I didn't know you could buy off such a major official for only $5500. "Oh, sure, I'll risk public shame and losing all my influence in exchange for a week's pay."
    • I could be wrong, but I don't think government anti-corruption officials in South Korea pull in (legitimately) $250k+ a year.
    • "I didn't know you could buy off such a major official for only $5500. "Oh, sure, I'll risk public shame and losing all my influence in exchange for a week's pay.""

      Yes $5500 was small but bribes are typically once per transaction. You say "Thankyou for signing this paper. Here is a small gift." and likely he approves several deals a month and gets $5K each time. A bribe racket is an ongoing business deal not a one time deal. So $5K is reasonable.

      In short a week's pay is not much but a week's pay four o
  • 911 (Score:2, Funny)

    by chiefer ( 1050460 )
    no wonder my Samsung cell keep dialing 911 inadvertently...
  • bribes? in this century of enlightenment?

    say it ain't so!!
  • ...the market will work it out
    • Yup... already happening... Samsung products are now forbidden of sale in Japan... No more of their excellent PAL/NTSC TV/monitor combo... Patent infrigement of somekind it seems... Didn't knew it was so hard to grease a japanese politician... I think they didn't really try...
  • by TheBearBear ( 1103771 ) on Tuesday November 20, 2007 @09:52AM (#21420231)
    I grew up a bit naive, believing my country is different from others in terms of corruption, with all our checks and balances and just our culture. In other countries where corruption runs high, people just accept it as a way of life. But now I am reading all about corruption in my country and it just made me realize that our form corruption is most dangerous. Corruption hides behind all these wack laws and loopholes so alot of times we won't/can't recognize it as corruption, while other poor countries - tho they are off worse - know full well what it is.

    You see, those countries' peoples will have a chance to fight because they know what it is. Depends on how bad they're willing to shed blood. THat's why their "leaders" rule with an iron hand. They're AFRAID OF THE PEOPLE. US, on the other hand - we don't even have the will to fight. We're too comfortable. Corruption THRIVES on this. Corruption doesn't have to rule with an iron hand. They know the sheep are fat and lazy.

    We've all taken the red pill.
    • Yes, yes, and we drank the kool-aid and put the blinders on ourselves, the monkey sees no evil, and the red wombat brays northwards at the moon.

      Corruption doesn't have to rule with an iron hand. They know the sheep are fat and lazy.

      We've all taken the red pill.
      Let me see if I get this straight:
      In capitalist America, the piggy sheep welcome their medicating velvet-gloved overlords (profit)?
      • Let me see if I get this straight:

        In capitalist America, the piggy sheep welcome their medicating velvet-gloved overlords (profit)?

        There's no welcome. The piggy sheep is so numb they can't tell the difference between a glove and a pine cone. I've nothing against our capitalist system. I am just trying to point out that our culture is such that corruption is a technicality away from legality.
        • Re: (Score:3, Insightful)

          by Red Flayer ( 890720 )
          Oh, I fully agree with you, but my personal perspective has changed.

          When I was young and idealistic, I wanted to help the sheep rise up.

          When I became older and more ambitious, I wanted to be the shepherd.

          When I got even older and jaded, I realized that if I worked for the farm, I'd only ever get to be the sheepdog.

          Now that I'm a relatively old cynic, I'm content to be a coyote -- too sharp to be herded, but not above using the farmer to get what I need.
    • You see, those countries' peoples will have a chance to fight because they know what it is. Depends on how bad they're willing to shed blood. THat's why their "leaders" rule with an iron hand. They're AFRAID OF THE PEOPLE.

      You do realize that when those countries DO get up and fight, if successful they'll - at best - end up with a system similar to ours. You're never easily going to get rid of corruption, as it's in the nature of some people.

      So yes, we have corruption too. Lots of it. But as opposed to certain countries, you CAN actually do some business here without a bribe.

    • The US was never really in the top 10 least-corrupted countries. But yes, it is quite doable to achieve a level of corruption so low that the vast majority of people are not going to run into the associated problems. You can ask Finland or New Zealand [wikipedia.org] just how to do that.
  • by gEvil (beta) ( 945888 ) on Tuesday November 20, 2007 @10:12AM (#21420473)
    This is another one of those slashdot moments that could easily be fixed with a bit of that pesky "editing" that the editors around here seem to loathe. Nearly every comment I'm reading talks about how the government official was corrupt, but a simple read of the article shows that he in fact REFUSED the bribe. There is no hypocrisy there--he is in charge of monitoring bribery in the government, Samsung attempted to bribe him, he refused it and is now using their attempt in a government case against Samsung. That is EXACTLY what he's supposed to be doing!
    • Please someone with mod point mod the parent as insightful!
    • by Red Flayer ( 890720 ) on Tuesday November 20, 2007 @10:56AM (#21421147) Journal
      There's another explanation that makes far more sense given the timeframe and the public statements made by the officials in question.

      Nearly every comment I'm reading talks about how the government official was corrupt, but a simple read of the article shows that he in fact REFUSED the bribe
      Reading the article will show that he ACCEPTED the bribe, then only refused it when he saw it was cold hard cash.

      There is no hypocrisy there--he is in charge of monitoring bribery in the government, Samsung attempted to bribe him, he refused it and is now using their attempt in a government case against Samsung.
      No. Another official blew the whistle on the widespread bribery, and Lee has come forward in order to cover his own ass. After almost three years, Lee did nothing -- didn't come forward, didn't report the attempted bribe to his superiors, didn't do anything except accept a job in the industry (outside of government) -- until the shit had already started to hit the fan.

      Would it surprise anyone if the private firm Lee Yong-chul now works for has competitors of Samsung on its client list?

      Furthermore, would it surprise anyone if Lee Yong-chul garnered evidence of the bribe attempt for a reason different than whistle-blowing? Extortion/blackmail, perhaps? When the scandal becaome public (through the statements of Kim Yong-chul), Lee Yong-chul's documentation of the briber attempt became relatively worthless. What better way to try to save his own arse than by going public?

      Note also that Lee's role in investigating government corruption was prompted by the revelation that President Roh (his boss) was involved in a bribery/corrpution/slush fund scandal during the 2002 election campaign. Lee reeks of corruption as badly as the rest, but was smart enough to engineer a way to come out looking somewhat clean.
  • 5 million won (US$5,445)

    Sure sounds a lot more impressive as 5 MILLION won.

    • Re: (Score:3, Informative)

      by Admiral Ag ( 829695 )
      Believe me, it isn't.

      Apparently in an attempt to make it harder to bribe people, the highest denomination banknote here is 10,000 won, which is about ten dollars (a 50,000 won note is in the works). I bought a mac with cash, and it was like trying to buy a loaf of bread in Germany in 1929. I almost needed a wheelbarrow to transport the full amount.
    • Yeah, sorta like saying 5 MILLION CENTS.

      Dude, I went to the store yesterday and they were selling a bottle of pop for a full ONE HUNDRED AND FIFTY CENTS! Talk about extreme! ... ;)
  • Sales poor? (Score:3, Funny)

    by lymond01 ( 314120 ) on Tuesday November 20, 2007 @10:57AM (#21421175)
    I read in Time magazine (yes, the near-leftist weekly reminder of recent pop history) that "Americans purchase 7600 Samsung LCDs per day". I'm guessing that is both TVs and monitors. Still...per day. I think in the most profitable stage of my burgeoning sales career, I only sold 15 cups of lemonade in one day. Perhaps if I'd bribed local officials....
  • And everybody has one...

    You better offer enough to pay for my Great,Great,Great,Great,Great,Great,Great,Great Grand kids college fund and for housing for all of them also.

    I figure $500 Billion US dollars worth of gold and ammo should be a good starting point...
  • Only $5k?! Why, I'd never sell out my principles for less than.. well, $10k at least!
    • I can imagine Patrick Henry of Modern days saying: "Give me liberty or give me... $10,000".
      Apart from the joke, corporations bribing is not anything new.
      They have been doing that from 1800s East India Company, Amaranth, Credit Lyonnais, Enron, Parmalat... the list goes on...
  • Seriously how could they be so cheap. 5k??? Thats only one night at the hostess bar.
    • by AHuxley ( 892839 )
      It helps build a quality long term relationship.
      A government official with expensive new toys might get noticed.
      One day its a scholarship ect...
  • Ironically, the official was Lee Yong-chul, who was a presidential monitor against corruption at the time.

    Doesn't seem "ironic" to me, it seems rational. I mean, who better to bribe than him?
  • This is not news (Score:3, Interesting)

    by holywarrior21c ( 933929 ) on Tuesday November 20, 2007 @12:26PM (#21422641)
    As early as 60s in Korea, Govn't have been helping chaebols http://en.wikipedia.org/wiki/Chaebol/ [wikipedia.org] in the effort to push industrialization. This is not news and oftentimes government officials were found laundrying billions of korean won making laws in favor of giants or chaebols in Korea. in korea samsung has its own nicknames like "samsung empire", "republic of samsung". just like microsoft has been often favored by the court and govn't, samsung will remain bully for sometime until there are like 10 another samsung-like-giants in Korea. what do samsung do? electronics, heavy industries, weapons, entertainment....investing in samsung stock is like investing in index fund of some country...it's madness!
  • Only peripherally relevant, but any chance to post links to the amazing Y0UNG-HAE CHANG HEAVY INDUSTRIES.

    http://yhchang.com/SAMSUNG_ENGLISH.html [yhchang.com]
    http://yhchang.com/SAMSUNG_MEANS_TO_COME.html [yhchang.com]
    http://yhchang.com/ [yhchang.com]
  • In the middle east and North Africa, the practice of baksheesh is standard. It's considered to be a tip or a thank you and there's nothing at all wrong with it. It's how things get done. In Africa it's even grander where the officials tell you what to pay them.
  • Shouldnt people be angrier at the officials accepting bribes?
  • Kind of explains how the Japanese and Chinese managed to overcome the United States trade barriers so easily. A few backroom deals and Voila! ... free trade. If you're a foreign corporation that doesn't want to deal with tariffs or import duties when shipping products for sale in the U.S., a few well-placed bribes^H^H^H^H^H^Hcontributions can work wonders.
  • US$5,445

    That's an insignificant amount of money for a politician, isn't it? I'm not surprised Samsung was caught with that.

We are each entitled to our own opinion, but no one is entitled to his own facts. -- Patrick Moynihan

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