When
you get right down to it, investors’ concerns, whether here or anywhere
else the world, are pretty simple.
We don’t pay attention to most political squabbling. If anything, we worry that many
lawmakers seem to get in the way of economic growth. Ideally, we’d rather the politicians
just kept their hands off the world of business most of the time. We want less regulation, less
controls, more free enterprise, more globalization, more
companies with good business plans simply allowed to grow and prosper. We need a reasonable bank policy,
and we need a
court system which expedites bankruptcies, and on that also lets investors
who have lost money as a result of fraud collect significant financial
damages from company Directors who have violated their fiduciary
duties. We need strong
companies, run by strong shareholders, and that includes us.
Gordon
Gecko preached “Greed is good,” and undeniably there are plenty of company
executives whose main goal in life is to amass huge fortunes for
themselves. If they are working
for a company with a good business plan and good corporate governance, they
can still amass a fortune, but this should only happen when the company is
profitable – especially in any rich executives’ divisions. Good for them, their company is
booming, it’s driving the economy, and they’re getting rich
personally. No harm in
that. They earned it.
In
politics, the opposite holds true.
Nobody ever got elected anyplace on Earth with a campaign promise to
boost politician salaries.
Given the amounts of taxpayer money lawmakers
control, politicians’ take-home pay is, quite honestly, lousy. Even if you work a financial
miracle, you don’t get a raise; at best, you just get re-elected (and not
even that for the President of Korea!). That’s why people like Michael
Bloomberg, Arnold Schwarzenegger, Ross Perot, and Thaksin
Shinawatra are drawn to politics: precisely
because they don’t need the money.
Serving their countries is the same thing for them as attending a
charity ball. They just want to
make a philanthropic donation.
However,
most politicians around the world are not billionaires like Bloomberg and
Perot. Most of them don’t even
have much money saved up. Some
of them, including the current resident of 1600 Pennsylvania Avenue, are actually
business failures. So, when
these poorly-paid political salarymen look at all
the Gordon Geckos tooling around New York
or Seoul in
their Ferraris, their reaction is quite normal: jealousy. After all, businessmen raking in
millions didn’t even get elected.
That’s where temptation comes in.
Political
graft has been the norm worldwide since the first agora in Ancient
Greece. The U.S.
provides the best example of many things, and graft is no exception. In the U.S.,
the vast majority of the population desperately want
to strictly control, or impose an outright ban on, firearms, because of the
horrendous pattern of schoolyard massacres and killing of loved ones in America. However, this will never
happen. Why? Political bribes and extortion. In the U.S., billions and billions of
taxpayer dollars are spent giving foreign aid to select countries without
any taxpayer approval whatsoever.
Why? Political bribes
and extortion. The procedures
used of course are euphemized with a lot of fancy words like “soft money”
and “special interest” groups, but nobody’s fooling anybody with that. And anyone who thinks there was no
quid pro quo for Clinton’s
slick end-term pardon of notorious fugitive money-launderer Mark Rich is
incredibly naïve. Just check
the return address: Zug,
Switzerland.
For
decades and decades, throughout much of Asia, Africa, Latin America, and Eastern Europe, American euphemisms for graft were
not necessary. If you ran the
place, you just looted the state bank anytime you felt like it. Consequently, these countries were
viewed as cesspools of graft, but only because they hadn’t developed the
sophisticated American euphemism system. One by one, we are seeing the Marcoses, the Sukarnos, the P.R.I.s, and the rest of their oily herd, go extinct
like dinosaurs. As a follow-up
to this era, it is interesting to witness the election of quite a few women
presidents in sexist, misogynist, patriarchal Asian countries like Pakistan, India,
Indonesia, Bangladesh and the Philippines. One suspects that this is because it
is no longer possible for testosterone-fueled, Marcos/Sukarno style,
national bank looting, and that being president is seen as just too much
work, for too little pay.
In
context of the illustrious history of worldwide political graft, President Roh’s proposed referendum, as a response to Choi Do-sul’s summons, seems
overkill in the extreme. Mr. Choi hasn’t even been convicted yet; in fact, he is
pleading his innocence.
Furthermore, prosecutors have cast a pretty big
net, issuing summonses across the political spectrum, from the MDP’s Choi, to the GNP’s Choi Don-woong, to the NPPC’s Lee Sang-soo. Does this mean that if Roh hypothetically were to lose the referendum, then no
GNP candidate could succeed him, because the GNP may possibly have taken
money from SK, too? The whole
gambit makes no sense, and has a “Checkers” tone.
And
even if they manage to find Choi Do-sul’s “smoking gun,” is there any real new news in this
business? After all, wasn’t Kim
Hong-up sentenced to 3.5 years in prison, and his little brother 2 years
(suspended)? And didn’t 450
officials get a “hot tip” about Korea Digital Line on January 27, 2000, and
rake in 400% gains three weeks later?
And, gee whiz, how do you hang yourself from a towel rack, anyway (as
Chang Rae-chan reportedly did)? What about “furgate,”
Lee Yong-ho-gate, Shin Kwang-ok-gate, Song Ja-gate, Park Jie Won-gate,
Lee Suk-chae-gate, etc., etc., etc. You didn’t see D.J. Kim falling on
his sword and calling for a referendum when any of these scandals
erupted. In some instances, he
did not even bother to make a comment.
One had the distinct impression that D.J.’s
crusade to dismantle the chaebols provoked a
series of vindictive muckraking revelations by the chaebol-controlled
press and the chaebol-controlled opposition
party, and that D.J. just brushed all this off, like annoying
mosquitoes. At most, he issued
an apology, and went back to work.
After all, he survived arrest, imprisonment, attempted
assassination. What’s a little
character assassination, compared to that?
Henry
M. Seggerman is President of International
Investment Advisers, an investment management company which has focused
exclusively on the Korean market for eleven years, registered with the
Financial Supervisory Service for Korean clients and with the Securities
and Exchange Commission for U.S.
clients. As of October 20,
2003, this year its Korea International Investment Fund is the
top-performing Korea
equity fund amongst 65 which are tracked by Bloomberg. The fund has a five-year annualized
return of 25% and in its lifetime has outperformed the KOSPI (in US$ terms)
by 207%...
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