A.1.c. Drafts of major presidential speeches, including the Dresden Address in which Park Geun-hye famously declared that Korean unification would be a “bonanza” (or daebak.) [See A.2.c.]
Armed with this information, Choi Soon-sil could plant her own crony in significant positions [see B.1.a., B.1.b.] and adjust her holdings in a way that would benefit from Korean government’s policies. [See A.2.d., C.4.a.]
A.2. Setting National Policy. Choi Soon-sil and her cronies not only received the state briefings, but actively participated in giving comments and setting policy directions.
A.2.c. Choi Soon-sil’s favorite activity, according to her gigolo, was to edit presidential speeches. Choi edited the Dresden Address, presidential remarks at a cabinet meeting, presidential commemorating the May 18 Gwangju Massacre, etc.
As it is the case for any enterprise, Choi Soon-sil’s corruption plan depended on placing the right people in the right places. In some cases, Choi Soon-sil and her cronies would put people they could trust into positions of power; in other cases, Choi would simply reward people loyal to her with outrageous positions. Choi and her cronies were likewise diligent in getting rid of people who got in their way.
B.1. Hiring in Government. Choi Soon-sil placed as many cronies as possible in the Blue House, other government positions and state-owned corporation positions, particularly those involved in doling out culture and sports-related budget.
B.1.a. The most significant Choi Soon-sil ally is Woo Byeong-u, a Blue House chief whose wife was friends with Choi. Because Woo had a distinguished career as a prosecutor, his appointment did not cause much of a stir. But Choi also turned her personal trainer Yoon Jeon-chu into a Blue House aide, which did cause a stir. (Yoon’s former clients also included movie stars Jeon Ji-yeon and Han Ye-seul.) Choi also turned one of her nephews and the nephew’s friend into Blue House aides. Astonishingly, the last job that Choi’s nephew had was a temp position for a department store. The Blue House aides, in turn, interfered with appointments of high-ranking police officials.
B.1.b. Choi and her cronies involved themselves in a number of appointments. The most significant one appears to be Jeon Dae-ju, ambassador for Vietnam. In Korea, ambassador positions are given almost exclusively to those who worked for the Ministry of Foreign Affairs for a very long time after passing the very difficult civil service exam. Jeon, however, was a businessman and had no government experience at all. Choi Soon-sil was also involved in appointing the head of the the head of the Korea Creative Content Agency or KOCCA. (Anyone who watched a Korean grup musik at SXSW should be familiar with KOCCA—that is the agency that is in charge of sending the musicians to Austin, Texas.)
B.2. Hiring in Private Sector. Choi Soon-sil also influenced hiring in the private sector as a part of her influence-peddling.
B.2.a. Choi maintained a substantial amount of assets in Germany, received a rapid promotion to an executive position after he returned to Korea. Ahn Jong-beom, one of the Blue House chiefs who was also Choi’s crony, called the Korean Air to demand a promotion for a manager in Korean Air’s Frankfurt office. The manager was promoted to run Korean Air’s Jeju office, but soon was accused of sexual harassment. Ahn, the Blue House chief, called again to prevent the manager’s termination. (Korean Air refused, and the manager was terminated. Blue House retaliated for this slight. [See B.4.b., C.4.d.])
The Blue House also cracked down on members of the media on this issue as well. [See B.4.a]
B.3.b. Government officials who failed to meet Choi Soon-sil’s objectives were also purged. Park Geun-hye personally named two under-ministers (next in line after minister and vice minister) of the Ministry of Culture, Sports and Tourism to be fired, for producing a report concerning the fishy judging of an equestrian event in which Choi Soon-sil’s daughter competed. [See E.1.b.] When Choi’s plastic surgeon Kim Yeong-jae’s plan to market into Kazakhstan failed [see B.2.b], the head of Korean Culture Center in Kazakhstan was summarily dismissed despite having a year and a half left in his term. Government initiatives that seemed to duplicate the efforts of Choi Soon-sil’s fake foundations were also cancelled. [See D.1.a.]
B.4. Harassing Media, Corporations and Civilians. While Choi and her cronies could not directly fire people in the private sector, they brought all of the government’s force onto bear to harass those who were in their way.
B.4.a. Using Korea’s liberal defamation laws, the Blue House sued the newspapers and individuals who dared to expose Jeong Yoon-hoi and Choi Soon-sil. Blue House aides sued the journalists and editors of Segye Ilbo, the newspaper that initially reported on Jeong Yoon-hoi’s improper influence over the Blue House [see B.3.a.] for defamation. (The suit was later dropped.) Blue House also indicted journalists who inadvertently got close to Choi Soon-sil—such as Kato Tatsuya of Japan’s Sankei Shimbun, who reported on the rumor that president Park Geun-hye was with Jeong Yoon-hoi during the Sewol ferry disaster. [See F.3.a.] During the interrogation for criminal defamation, Kato recalled that the prosecutors were particularly interested in how much he knew about Choi Soon-sil.
B.4.b. Choi Soon-sil extorted from large corporations, and punished the corporations that refused to pay into her slush fund. The biggest corporate victim of Choi was Hanjin Group, which is affiliated with Hanjin Shipping and Korean Airlines. Hanjin has been a thorn in the side of Choi Soon-sil and the Blue House. Korean Airlines terminated its employee accused of sexual harassment despite Blue House pressure. [See B.2.a.] Cho Yang-ho, president of Hanjin Group, was serving as the chairman for Pyeongchang Winter Olympics Organization Committee, and refused to give a subcontract to a company owned by Choi Soon-sil and Cha Eun-taek. [See C.4.d.] Hanjin only contributed around US $800,000 to foundations owned by Choi Soon-sil, a small amount relative to other large corporations that paid into Choi’s slush fund. [See D.1.a.] For this, the Ministry of Culture, Sports and Tourism pushed Cho out of his chairman position. Three months later, Hanjin Shipping—the sixth largest shipping company in the world—filed for bankruptcy, despite the expectation that the Korean government would step in to bail out one of the largest companies in Korea that would cause a massive ripple effect on the Korean economy.
B.4.c. Choi Soon-sil and her cronies also harassed individuals who did not cooperate with their plans. Choi had the gall to harass figure skating champion Yuna Kim—perhaps the stupidest thing that Choi could have done, considering Yuna Kim’s messianic stature as Korea’s greatest sports hero. Choi’s crony Cha Eun-taek was promoting a calisthenics jadwal [see C.2.e.] and asked Yuna Kim to help with the promotion. Kim refused, and was denied the 2015 Sportsman of the Year Award from Korean Sport & Olympic Committee despite being the overwhelming favorite based on her stellar performance at the 2014 Winter Olympics.
With the ability to influence the Korean government’s policy direction, Choi Soon-sil and her cronies set Korea’s national policies such that the government budget would come to their pockets. They did so by operating a number of companies, some of which were relatively legitimate ones rendering actual services. More commonly, Choi’s companies were shells whose sole purpose was to serve as a vessel for money. Choi particularly focused on culture and sports promotion, which naturally led her to the biggest upcoming culture and sports event in Korea—the Pyeongchang Winter Olympics in 2018.
C.1. Riding the Hallyu Cash Wave. For the last decade, Korea has had a consistent governmental project to promote its culture abroad. As it turned out, this was the easiest money for Choi and her cronies to steal.
C.1.a. Have you ever wondered why the booths sponsored by the Korean government at KCONs around the world are so shitty? Wonder no more. One of Choi Soon-sil’s companies, ostensibly engaged in the business of events planning, was running the KCON and demanded that a Korean Cultural Center open in Abu Dhabi, and the center indeed opened in March of this year. [See A.2.d.] If this scandal was not revealed, Choi and her cronies surely would have pocketed the budget allocated for Korean Cultural Center Abu Dhabi. Choi’s cronies also were accompanied the president’s international trip in an unofficial capacity, and negotiated local governments—usually in the Middle East—about opening an international office. When the doctor failed to make headway abroad, Korea’s diplomats paid the price. [See B.3.b.]
C.1.d. One of Park Geun-hye administration’s major initiatives was the “creative economy”—which may as well have been Cha Eun-taek’s personal piggy bank. Korean government allocated approximately US $110 million on constructing “creative culture centers” around Korea. Cha spent most of the budget, but the whereabouts of the money remains a mystery, as the Minister of Culture, Sports and Tourism specifically prohibited his subordinates to audit the expenditure. Cha also envisioned a “K-Culture Valley,” which was to be a massive complex holding a theme park, concert halls, traditional houses to be used as guest houses, etc. CJ E&M won the bid for the construction, and received massive discount on the rent to be paid on the land that was not previously in the plans. (Aside: if you see a tacky government project in Korea that is called “K-something” or another, at this point you can safely assume that it had to do with Choi Soon-sil.)
C.2. Siphoning Sports Budget. In addition to cultural budgets, Choi Soon-sil focused on stealing the budget allocated for sports events. Because Choi’s daughter and niece were involved in horseback riding [see E.1.a.], and Choi’s gigolo Go Yeong-tae was previously a gold medalist in fencing in the Asian Games, there was a cover for Choi to be involved in sports business.
C.2.a. Korean government has been developing the mountain ridges on Korea’s eastern coast—which includes Pyeongchang, the site for the Winter Olympics—to attract tourists. The development plan includes a horseback riding park, to be run by Choi Soon-sil’s family.
C.2.b. Ministry of Culture, Sports and Tourism compelled a casino company to start a fencing team for the disabled. (It is ordinary for Korea’s corporations to sponsor a sports team, but definitely not ordinary for the government to order the sponsor.) The casino company found that all the athletes for the team had an exclusive contract with a management company owned by Choi Soon-sil. In other words, the casino company was simply paying Choi by way of its fencing team that it was ordered to create.
C.2.c. Pursuant to the Dresden Address (which Choi Soon-sil edited [see A.1.c., A.2.c.],) Korean government was planning to establish a DMZ World Peace Park. The park includes a sports complex that would host events for North and South Korea. Choi Soon-sil’s shell company was supposed to run the sports complex, which was never built because of tensions between the two Koreas.
C.2.d. Korean government had a jadwal to promote local sports by setting up around the country “K-Sports Clubs,” whose management rights Choi Soon-sil attempted to obtain. Because the management rights for a new club was easier to obtain, Choi’s cronies attempted to open a number of new K-Sports Clubs in Namyangju, Dangjin and Gochang. In addition to general management rights, Choi attempted to operate the coffee shops and stores inside the club. [See A.2.b.]
C.2.e. Cha Eun-taek won the government bid, worth around US $300,000, less than US $7,000 to the person who actually created the calisthenics regimen. The sports stars who refused to participate in the promotion of the calisthenics regimen—most notably Yuna Kim—were frozen out of government awards and subsidies. [See B.4.c.]
C.3. Miscellaneous. Of course, culture and sports were hardly the only budget items that Choi Soon-sil and her cronies grubbed on.
C.3.d. Choi’s personal plastic surgeon Kim Yeong-jae also got a piece of the action. [See B.2.b, B.3.b., C.1.c.] Although Kim was hardly renowned in his field, his small clinic established a Winter Sports Talent Development Center, ostensibly for the purpose of nurturing young talents in winter sports, and swindled the government assistance. (Samsung also “donated” more than US $1 million to this center. [See D.3.a.])
C.4.c. Choi and her cronies also ensured that the Olympics would please Park Geun-hye’s personal sensibilities. Although Pyeongchang’s mascot was set as a tiger and a bear, Minister of Culture, Sports and Tourism Kim Jong-deok, a Choi crony, insisted that forced Cho to resign from being the chairman of the Organization Committee. [See B.4.b.]
D. Influence Peddling with Corporations
In a country like Korea where the government sets the industrial policy, controlling the government necessarily means having a significant leverage with corporations. Choi Soon-sil, naturally, maximized these opportunities as well. Choi’s main vehicles for dealing with corporations were two “foundations”—Mir Foundation and K-Sports Foundation, which were ostensibly established for developing sports talents. Choi and her cronies in the Blue House, including the president herself, met with the leaders of Korea’s major corporations to ask for “contribution” into those foundations. In exchange, Choi would give out contracts and other favors.
D.1. Straight-Up Extortion. Much of Choi Soon-sil’s collection efforts were exactly that—extorting money for no benefit in exchange (except perhaps the benefit of not being driven into bankruptcy.)
Of course, the foundations hardly spent this money into their stated purpose of developing sports talent. One of the biggest expenditures was to take out massive insurance policies (essentially acting as a savings account) for Choi’s cronies.
D.1.b. The US $645 million contribution was only the first round of extortion. After the first round, Park Geun-hye met with the chairman of Lotte Group to demand another US $62 million—while the chairman was under investigation for embezzling his company’s money. After some resistance—which included the offer to actually build a physical sports center—Lotte eventually ponied up the cash. Choi Soon-sil also demanded POSCO open a bulu tangkis team to be managed by her management company. [See C.2.b.] POSCO initially refused, but later opened a fencing team and paid US $1.2 million to Choi’s company for management fee.
D.1.c. Choi Soon-sil and her cronies did not just steal money; sometimes, they attempted to steal a whole company. In early 2015, POSCO planned to sell off its subsidiary called Poreka, an advertisement company. Lotte and a smaller company called CommTogether expressed interest in acquiring Poreka. At this point, Park Geun-hye personally ordered that Poreka cannot be sold to a large company, effectively taking out Lotte from the bidding process. Then Choi’s crony Cha Eun-taek attempted to acquire Poreka through Cha’s shell company, but POSCO would not sell to Cha’s shell because the shell had no history of being in the advertisement business. After CommTogether acquired Poreka, Cha had his crony (Song Seong-gak, head of KOCCA) threaten CommTogether’s CEO into giving up the company, claiming the government would “bury [him] and eliminate [his] company through tax audits.” Because CommTogether held on until the end, Poreka remained with CommTogether.
D.1.e. Choi’s cronies had many other ways to steal from corporations. Cha Eun-taek, for example, sold one of his buildings to a subsidiary of Ottogi, a major food manufacturer, for a price that was at least US $1.8 million higher than the market rate. Jeong Yoo-ra, Choi Soon-sil’s daughter, had standing letters of credit from KEB Hana Bank, allowing her to obtain loans up to US $380,000 as a teenager.
D.2. Giving Out Deals. To her (dubious) credit, Choi Soon-sil did not simply steal from Korean corporations. Once becoming aware that Choi was in the position to control policies and direct contracts, corporations engaged in a quid pro quo with Choi.
D.2.a. All of Korea’s major corporations were compelled to pay into K-Sports and Mir Foundations. [See D.1.a.] Lotte Group saw the payment as an opportunity to win government bids—specifically, in duty free stores. Although Lotte lost out in the earlier bidding process to open a new duty free store, it obtained the approval after it paid more than US $2 million into Mir Foundation. CJ Group paid US $1 million into the two foundations because Park Geun-hye implied in the meeting with CJ that she would pardon its former CEO Lee Jae-hyeon, who was imprisoned for embezzlement and tax avoidance. After CJ paid, Lee received a special pardon from the president, and won the bid for the construction of K-Culture Valley. [See C.1.d.]
The smaller Daelim Corporation paid less into the foundations—only around US $500,000—but it managed to put its employee and a former employee on Mir Foundation’s board. Daelim was prohibited from entering into government construction bids because of prior anti-competitive behavior, but it received an early reprieve last year.
D.2.b. Of course, the influence-peddling was not just through the two foundations. Lee Yeong-bok, owner of the company that managed the luxurious LCT condos in Busan, was Choi Soon-sil’s friend, and accordingly LCT condos received a designation for investment immigration, allowing foreign investors into the condos receive permanent residency in Korea. In one instance, Choi Soon-sil had the president to compel Hyundai Motors to award a contract to a car parts manufacturer—which was owned by the parents of Choi’s daughter’s friend.
D.3. Samsung. Korea’s flagship corporation deserves a special section here, because it continued its tradition of excellence by finding the way to outdo Korea’s other large corporations in this scandal. What separates Samsung is the fact that it managed to find the most efficient use of its bribes, such that it may have leveraged the bribe money into the greatest benefit.
D.3.a. What is remarkable about Samsung’s relationship with Choi Soon-sil was that Samsung focused on the thing that Choi cared for the most—namely, her daughter Jeong Yoo-ra and the horses that Jeong used for equestrian competitions. [See E.1.a.] Initially, Samsung former Blue House chief Ahn Jong-beom—one of Choi Soon-sil’s cronies—directed the NPS as to how it should vote. As a result of the merger, the NPS lost nearly US $300 million, but the Samsung Group was able to transfer its control to Lee Jae-yong at a low cost.
E.2.e. Jeong Yoo-ra took a break from school in the second semester of her freshman year, sign a declaration that they would give up the right to inherit Choi’s assets. (The declaration is not legally binding.)
F. Drug Use and Sewol Ferry Disaster
The strangest and the most unexplained part of this entire sordid affair is Choi Soon-sil’s drug use with the president. Choi came and went from the Blue House as she pleased, carrying in prescription drugs that she received on Park Geun-hye’s behalf. This may be connected to one of the biggest mysteries of the Park Geun-hye administration: what was she doing for seven hours while the ferry Sewol was sinking with 300 young passengers aboard?
F.1.a. As discussed above, the Blue House is a large bureaucracy of its own, and one of the Blue House offices is for assisting the First Lady. Because Park Geun-hye is not married, there was a question as to whether that office would exist during the Park administration. The office did continue to exist, although no one at the Blue House was entirely sure what it was doing. Now we know that the office essentially existed to assist Choi Soon-sil as she went in and out of the Blue House. Many of Choi’s cronies in the Blue House (including her former personal trainer [see B.1.a.] worked for this office.
F.1.c. Because the Blue House is a governmental body, it acquires goods through Public Procurement Service, a centralized bureaucracy that handles all procurements for Korean government. According to the PPS records, the Blue House purchased three beds for the Blue House main hall in the beginning of Park Geun-hye’s presidency. This is suspicious for several reasons. First, the main hall is the office; the president lives and goes to sleep in the separate Blue House residence hall. Why would there be beds at the office. Second, even if the president wants to nap at the office from time to time, why would she need three beds? Currently the speculation is that the extra bed must be for Choi Soon-sil, but that still leaves an extra bed. [See F.2.d.]
F.2. Drugs, Drugs, Drugs. Choi Soon-sil, and apparently Park Geun-hye, were fans of medical procedures for anti-aging and rest. It appears that one of the main reasons why Choi Soon-sil visited the Blue House so often was to use drugs with Park.
F.2.a. Choi Soon-sil apparently has a long-standing routine of receiving injections of anti-aging supplements. She would rent a room at her favorite spa, bring in a nurse, and smuggled out a vial of Park Geun-hye’s blood for check-up (again entirely bypassing the Blue House medical staff,) and picked up medicines for Park Geun-hye based on a fake prescription issued to Choi , issued by one of Choi’s doctor cronies.
In addition to the official purchase through PPS, it appears that Park Geun-hye (with Choi Soon-sil’s help) has been purchasing drugs off-line as well. Choi Soon-sil would receive a prescription on Park Geun-hye’s behalf and picked up a large amount of anti-aging injection vials, apparently to be delivered to the Blue House. Currently, the investigation is focused on whether Park Geun-hye also made off-line purchase of propofol, a prescription sedative whose overdose killed Michael Jackson. [See F.3.b.] Choi would purchase propofol from her plastic surgeon Kim Yeong-jae [see B.2.b., B.3.b., C.1.c., C.3.d.], and the amount of propofol that Kim Yeong-jae’s clinic used appeared to coincide with Park Geun-hye schedule—that is, the clinic stopped using propofol whenever the president was traveling abroad.
F.3. Sewol Ferry Disaster. Park Geun-hye’s drug habit may yet resolve the biggest mystery of her administration—what was she doing during the Sewol ferry disaster, one of the greatest man-made disasters in Korea in the last several decades? The news that Sewol was sinking broke around 9 a.m. on April 16, 2014, and the Blue House received a report of it by 10 a.m. But Park Geun-hye did not appear in public until after 5 p.m., when she appeared at the disaster response center. The “missing seven hours” by Park Geun-hye has been this administration’s greatest controversy, as the Blue House steadfastly refused for more than two years to disclose what Park Geun-hye was doing for hours while 300 school children were drowning on live television.
F.3.a.Quick review of the timeline first. The first call for the Sewol ferry came at 8:52 a.m., and the first news report broke at 9:19 a.m. The Blue House claims that it received the first briefing on the accident at 10 a.m. The last survivor from the ferry was rescued around 10:20 a.m. Around 10:30 a.m., Park Geun-hye called the maritime police twice to receive briefing and give directions. Park then took no action until she called the Blue House chief of national security at around 2:11 p.m. Park called the chief at 2:57 p.m., and held the Blue House chiefs meeting at around 4 p.m. Then Park appeared in public for the first time at 5:15 p.m. At the disaster response central, Park Geun-hye appeared clueless, asking why it was so hard for the rescue team to find the students floating with life vests on the water—when it has been clear to the whole country for hours that most of the passengers were trapped in the ship and never made it out.
Several unresolved questions arise from this timeline. First, it is not entirely clear where Park Geun-hye was and what she was doing between the initial report at 10 a.m. and the public appearance at 5:15 p.m. During that seven-hour window, Park Geun-hye did not receive any briefings in person, nor did she give any order in person. She received all reports either via paper reports or over the phone, and gave all directions over the phone. Second, the Blue House stated that Park Geun-hye was at the Blue House residence, which only raises further questions: why would she be at the residence, and not at the main hall of the Blue House where the offices are? Third, even if we believed everything that the Blue House said, there is a 3.5-hour gap in Park Geun-hye’s activity between 10:30 a.m. and 2:11 p.m., while the entire country was watching the television, horrified.
F.3.b. Once the Choi Soon-sil-gate and Park Geun-hye’s drug habit became public, the leading theory of the “missing seven hours” became that the president was under the influence. There are multiple sub-theories. One of them is that Park was asleep under the influence of propofol. [See F.2.c.] The Sewol sank on Wednesday, April 16, 2014. Dr. Kim Yeong-jae, Choi Soon-sil’s plastic surgeon, closed his clinic every Wednesday—but nonetheless she was going through a plastic surgery of some kind, like a Botox injection. Proponents of this theory (who include prominent opposition politicians) claim that Park Geun-hye’s face changed significantly between April 15 and April 16.
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This concludes the comprehensive compendium of allegations against Park Geun-hye in relation to Choi Soon-sil and her cronies. I will update this list periodically if there is a major new development.
Got a question or a comment for the Korean? Email away at askakorean@gmail.com.
