In April, 31 South Koreans, including 18 professional baseball players, were indicted for sports gambling and match-fixing. Operating both online and on the field, where players deliberately made mistakes to throw matches, these athletes and “brokers,” members of criminal gangs, earned as much as $4,000 per game. This type of activity is not new to South Korea, as volleyball and soccer leagues faced similar instances earlier this year. However, the recent corruption of baseball, Korea’s national pastime, particularly reflects a larger South Korean problem.
According to a 2011 report by The Economist, the high level of South Korean corruption remains static, despite the nation’s rapid social and economic advancement. Indeed, last week, Korean officials discovered that the former president Roh Moo-hyun’s elder brother, Roh Geon-pyeong, had millions of won hidden in a bank account. Further, a February scandal revealed that the Parliament Speaker Park Hee-Tae and several associates were guilty of political bribery.
With such rampant political corruption, Christian Science Monitor’s Donald Kirk considers a similar corruption of sports inevitable, particularly when large corporations own each of the country’s eight professional teams:
“In the wake of the soccer scandal, some people believe a baseball scandal was almost inevitable: In Korea, corruption is endemic and payoffs are periodically reported just about everywhere – from university campuses to large corporations to political campaigns to the government and the armed forces. And all eight teams are owned by some of Korea’s largest and best-known corporations.”
Therefore, the ultimate cause of sports scandals in Korea may be corporate corruption itself, which South Korea has done little to curb, despite a series of apologies and pledges by the government. Rather, South Korea has instituted an ineffective policy of whistle-blowing instead of attempting sweeping reform measures.
Perhaps the reason for the government’s ineffective response is the corporate sector’s mixed influence on the economy. On one hand, The Economist considers “powerful conglomerates, relatively weak smaller firms, and high social cohesion” the greatest force behind Korean growth. On the other, it also comments on these conglomerated “chaebols’” corruption:
“The chaebol system has proved prone to fraud, dodgy accounting and illegal political contributions. Many of the companies depend to an unhealthy degree on a founder or his family. About half the managers of Samsung’s firms used to work in the chairman’s secretariat—and thus directly for the founder or his son—and owe their promotion to the associated patronage.”
As South Korean growth begins to slow and the nation continues its long-term Asian leadership, such a corrupt system cannot justifiably endure. Adequate transparency legislation is necessary not only to avoid intra-Korean corruption, such as that in sports, but also to ensure fairness in the global economy. Indeed, with Korean politics stained by corruption scandals, the wealthy nation’s foreign investments may require equal attention.
Disclaimer: Unless specifically stated to be the views of the Task Force, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Task Force on Financial Integrity & Economic Development.