Point cards and bribery

A point card for a department store grants a shopper credit based on how much he or she spends. Airliners hold mileage marketing campaigns for department stores. Consumers feel as if they gain something for free by redeeming their miles or points for products, just like dust can pile up to form a big mountain.

Park Yeon-cha, chairman of Taekwang Industries who was a financial supporter of former President Roh Moo-hyun, would often present gift certificates for use at department stores as bribes. Two letter envelopes can hold 200 certificates of 500,000 won each (460 U.S. dollars) worth a combined 100 million won (92,000 dollars). Park gave gift certificates worth 100 million won to Park Jeong-gyu, former presidential secretary for civil affairs, at a Seoul hotel in December 2004. The secretary reportedly took the gifts without knowing what they were and later planned to return them. A delay in their return, however, made the high-ranking official keep the certificates instead. More than two years after his resignation from the presidential office over the Chuseok (Korean Thanksgiving) holidays in 2007, the secretary`s wife reportedly bought a luxury watch for 44 million won (40,300 dollars) and a ring for 45 million won (41,200 dollars) with the certificates. Park Jeong-gyu was eventually arrested on the charge of taking bribes, received a sentence of 3.5 years in prison and a fine of 94 million won (86,000 dollars), and was paroled after serving half of his term.

South Chungcheong Province Gov. Ahn Hee-jung, who was considered a key confident of President Roh, took gift certificates worth 50 million won (46,000 dollars) from Park Yeon-cha while a member of the then ruling Democratic Party’s supreme council. Ahn was also caught for his crime. The bribery scandal was exposed thanks to department store point accounts. The Taekwang chief used gift certificates that guaranteed anonymity, but Park Jeong-gyu and Ahn added points to their department membership cards, which later served as evidence. In comparison, Jeong Sang-moon, who served as presidential secretary for general affairs under the Roh administration, took gift certificates worth 100 million won from Park Yeon-cha in January 2005. When Seoul prosecutors began looking into a shipping company in late 2007, Jeong was implicated in the bribery case. To avoid being caught in a raid and search by investigators, Jeong reportedly shredded all of the gift certificates in his possession.

CJ CheilJedang used a method to give corporate credit cards to medical doctors to leave no evidence. The company lobbied the doctors to prompt them to use the CJ`s pharmaceutical products. The doctors who used the point cards added points, however, leading authorities to find that they took bribes. Park Yeon-cha and CJ used gift certificates and corporate credit cards instead of cash or checks to dodge law enforcement, but the recipients of the bribes got caught after they sought to add points to their cards. Point cards that department stores use to reward loyal customers have effectively been labeled as tools used in bribery. Doctors who caused losses to patients and the National Health Insurance Corp. by taking rebates have been humiliated after seeking relatively tiny gains stemming from the bribes.

Editorial Writer Choi Yeong-hae (yhchoi65@donga.com)