Jeopdae in jeopardy: Korea cracks down on bribes in brothels

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A JOURNALIST, a public servant and a beggar walk into a bar, runs a South Korean joke. Who ends up paying for the drinks? The beggar. The quip illustrates the expectations surrounding jeopdae, a widespread form of business entertainment in South Korea in which firms lavish generous hospitality not only on clients but also on reporters and public officials.

Weekend rounds of golf, posh dinners and nights on the town—from karaoke bars to hostess clubs called “room salons” that offer sex for money—have long been a staple of conducting business. Good relations with the bureaucracy are seen as essential to success in business, a legacy of South Korea’s state-centred economic development in the 1960s and 1970s. Local etiquette also creates a sense of obligation among relatives (however distant), former schoolmates or even people from the same home town, another source of bonhomie. Last year 591,000 companies spent 10 trillion won ($9 billion) on entertainment, according to the National Tax Service.

But the distinction between courtesy and bribery can be fuzzy. Now the government wants to put a stop to jeopdae: last month it introduced strict new limits on the favours and benefits that can be asked for or given to 4m public officials, teachers and journalists (on the basis that their work too is in the public interest). The new anti-corruption law does away with the need to prove an explicit link between a gift and a favour, which had often stumped prosecutors. It considers some requests to officials, such as asking for help securing a licence or getting a fine waived, to be automatically criminal, even without any obvious inducement. Receiving any benefits, whether money, meals or memberships, is banned above set limits: up to 30,000 won for dining and 50,000 won for presents (up to 100,000 won at weddings and funerals). Both the giver and the receiver can be prosecuted. Gifts to a spouse are considered no different from those received directly. Fines and jail time await wrongdoers.

Seven in ten South Koreans support the new rules, popularly known as the “Kim Young-ran act” after the former head of the state’s anti-corruption body, who drafted the new law in 2012. It had languished in parliament until the fatal overloading of a ferry in 2014 prompted outrage over cosy ties between businessmen and bureaucrats, which were thought to have contributed to the disaster.

According to a government poll conducted in 2014, 70% of respondents said they had no trust in either the civil service or the courts. Though South Korea is Asia’s fourth-largest economy and a healthy democracy, it ranks 27th out of 34 rich countries in an index of perceived levels of corruption compiled by Transparency International, a pressure group. In January a former prime minister, who stepped down last year, was charged with accepting illegal campaign funds from a businessman; in August a chief editor at Chosun Ilbo, the country’s biggest daily newspaper, was fired over allegations that DSME, a local shipbuilder, had provided him with a luxury trip in return for positive coverage.

The law amounts to a revolution in local business culture. Officials and journalists are being encouraged to “go Dutch” on bills, hitherto a cultural no-no; restaurants have devised special menus that squeak under the new spending limit. Lawyers are advising companies to exercise extreme caution until prosecutors set a few precedents, says an executive in charge of government and press relations at a large conglomerate. No one wants to be a test case. He has cancelled all dinners and golf outings with journalists or officials (green fees are typically 250,000 won a head) until the end of the year.

At Hyundai Card, part of the Hyundai Group, screensavers quiz employees on the law, with pop-ups that do not go away until answered correctly. Staff must sign written pledges to abide by the act. CJ, a food and entertainment firm, has swapped all of its corporate credit cards for “clean” ones. These, introduced to the public sector in 2005, block payments at lavish or shady venues, such as nightclubs, massage parlours, casinos and room salons.

But once the initial caution subsides, the law’s success will depend on public reporting, says Lee Sung-bo, formerly head of the anti-corruption agency. Already private institutes are offering courses to a fleet of amateur detectives, known as “ranparazzi”, to instruct them on hunting for discarded receipts and filming deviant officials with hidden cameras, for rewards of up to 200m won.

The worry is that high-level bribes will continue, hidden by money-launderers. Chung Jae-won of Kookmin University in Seoul says that the law’s woolliness means it might apply differently to those in power. He notes that local media have reported on low-level graft involving lunches and gifts, but not the darker room-salon culture controlled by cartels “at the core of high-level bribery”. Outing the most toxic deals at big secretive firms will depend on insiders, not scrappy “ranparazzi”.

Much will depend, too, on how police and prosecutors apply the law. They themselves are not immune to influence: in July a prosecutor was arrested on charges of receiving millions of dollars in shares and cash from the founder of Nexon, South Korea’s biggest online-gaming firm.

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Julio Marchi ©

Publisher / Editor at BS News & Media Services
A free thinker, not labelled as anything, not associated with any party, not part of any group or engaged with any religion... A simple guy tired of the nowadays bullshit who decided to promote more serious debates about what is really happening hoping to bring back intelligence to the superficial and shallow news & headlines that unfortunately took over the existing media scene.
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