Samsung is a well known name in America and abroad for
dominating multiple electronics fields, manufacturing products such as speedy SSDs,
high-tech TVs,
and trendy cell
phones. Samsung is a South Korean company and is the nation's largest
conglomerate. It accounts for an incredible one sixth of South Korea's
GDP with its 58 affiliates posting combined sales of $159 billion USD last year.
Samsung is known in South Korea by the term "chaebol", which means a
family owned conglomerate.
Now if allegations
from one of its former top legal executives hold true, it appears as if
Samsung behaved more like a mafia family rather than a respectable business,
retaining a massive slush fund
with which to bribe or otherwise influence government officials.
According to Kim Yong-cheol, former top legal executive, Samsung had used its
subsidiaries to create a massive slush fund with over 200 billion won ($215.8
million USD) in assets.
Samsung currently has refused to comment on the charges.
Yong-cheol states that he is determined to blow the whistle on his former employer’s
illegal and improper activities. "Samsung has created a large-scale slush
fund," he stated at a press conference he called.
Yong-cheol and others have accused Samsung of impropriety on a number of recent
occasions. Yong-cheol's past allegations had centered on how Samsung had
routinely made a business practice of bribing prosecutors and politicians to
quash investigations about dirty business dealings.
His new allegation certainly tops these previous ones, though. He says
that he personally handled documents which detailed how money was being
channeled into this slush fund. Some of the money was then used to buy
artwork while some money would be withdrawn from the fund for bribery and other illicit activities.
There has been increasing concern about Samsung's relationship with South
Korea's government, which seems a bit too cozy for many people's comfort.
Many top South Korean government officials have been heavily funded by Samsung
and corruption is so commonplace that it makes problems in the American
political system seem of the garden variety.
Not all are content to be on Samsung's payroll, though. Last week, South
Korea's parliament passed a measure to appoint an independent counsel to investigate
the Samsung group.
The bill includes provisions to investigate President Roh Moo-hyun who won the
public election in 2002, and allegedly used illegal contributions from Samsung
during his campaign.
Unfortunately, in a show of audacity Roh, who has three months left in office,
is planning on vetoing the bill. Over the weekend he spoke publicly
denying the widespread claims that he had received money as a congratulatory
gift from Samsung in 2002.
Prosecutors are putting together a team of about 55 people to look into the
allegations about the slush fund.
While Samsung certainly has a steely grip on South Korea's government, its
actions have been at times so blatant that several of its officials have been
convicted of corruption charges. It should be intriguing to see if the
Parliament's action is a sign of progress or simply a useless political
gesture.
In the U.S. Samsung has been fined for price
fixing its DRAM. In Korea, Samsung also recently admitted to plagiarizing
artwork from both Microsoft and Apple.