‘Too big to jail’

Back on September 25, 2014, then deputy prime minister for economy Choi Kyung-hwan made a surprise visit to the press room at the Government Complex Sejong . He said he just stopped by, but he told reporters to ask him questions, saying that he has something he must say. While eating peanuts, Choi corrected his posture, when a reporter asked, “What do you think about controversy over pardon of entrepreneurs?” He replied, “If laws are enforced too sternly just because they are entrepreneurs, it will not be helpful to the economy.” His remarks entailed potential political damage, but the prevailing sentiment in the administration was that entrepreneurs should not be behind bars for too long.

An analysis of punishments given to entrepreneurs who were convicted from 2000 to 2007 by the Korea Institute of Public Finance has revealed that the probability for business tycoons, their family and executives to be handed probation was about 10 percentage points higher than that for ordinary people. This trend is reflected in the "3•5 Principle." It means penalty that is handed to a convicted family member of Korean conglomerate owners was generally "three-year jail sentence and five-year stay of execution."

The situation seems to be pretty much the same in the U.S. as well. According to an analysis of 156 lawsuits that were filed against 10 major banks since 2009 by the U.S. Justice Department and the Securities and Exchange Commission, 47 people were actually indicted, and only one of them was executive, the Wall Street Journal reported on Friday. It means that although it was none other than American investment banks that sparked the global financial crisis, few people were arrested in realty, and even if some were handcuffed, executives were easily released. The analysis has thus demonstrated that large banks are not only well aware of legal loopholes but are highly skilled in dodging responsibilities by using their staff as scapegoat.

Along with the phrase "Too big to fail," American people often use as words meant to criticize problems with massive capital these days. The former means "Too big a company cannot fail," and the latter implies "Too big an entrepreneur cannot be put behind bars." Critics say that corporate scandals and corruptions continue to occur while corporate restructuring gets nowhere due to such practice in Korea as well. Rule of law will not be established in Korea if the country turns a blind eye to former CEOs of Daewoo Shipbuilding & Marine Engineering, who were responsible for the crisis facing the shipbuilding industry, Hanjin Shipping's former chairwoman who escaped from the sinking ship before investors and employees, and creditors who disregarded deteriorating finances.