The powerful heads of South Korea’s top conglomerates on Tuesday denied they were buying influence or preferential treatment by donating millions of dollars to the two foundations that are at the center of President Park Geun-hye’s sudden political collapse.
Lee Seung-chul, the Vice President of the Federation of Korea Industries said the Park Blue House did not make explicit threats nor enticements when asking for donations, but cooperation was expected.
“At that time, it was difficult to refuse requests and orders from the Blue House,” he said.
The National Assembly is holding hearings this week with corporate leaders from Samsung and Hyundai Motor Groups and other powerful conglomerates about their possible involvement in the presidential influence peddling scandal.
Prosecutors investigating the case claim the president was involved in efforts by her longtime confidante Choi Soon-sil and some of her closest associates to force major Korean corporations to donate more than $65 million to two foundations using the threat of tax audits. Choi is also alleged to have funneled some of the funds to her private companies and to side contracts for friends.
The president has defended her subordinates’ efforts to solicit corporate funding to establish Korean sports and cultural foundations, saying they were created in the national interest. But she maintains she never personally benefited from these fundraising efforts and was unaware of any illegal actions, such as coercion, extortion, and attempted bribery, allegedly taken by those around her.
Similar to the U.S. Watergate hearings that forced U.S. President Nixon to resign in 1974, some of the key questions being asked of the Korean corporate heads testifying under oath were, “What did the president know and when did she know it?”
Lee Jae-yong, the Vice Chairman of Samsung, said he recalled two broad conversations with President Park in July 2015 and in February 2016 about the idea of encouraging corporate support to fund foundations for the public good.
“President Park said if corporations support the development of culture and sports, it would be good for the economy and tourism, so (she asked) for generous support” he said.
Lee also said he was embarrassed by the situation and was appearing with a "heavy heart.”
While the Samsung leader said he did not know Choi Soon-sil personally, he did confirm that his company paid Choi a significant sum of money, but said he could not further discuss the matter as it is now the subject of a criminal investigation.
The South Korean media has reported that Samsung transferred over $3 million directly to a German sports company established by Choi and her daughter Chung Yoo-ra.
Choi has been charged with abuse of authority, coercion and attempted fraud.
One of the president’s aides faces similar charges and another has been indicted for leaking government secrets to Choi, who held no official position or security clearance.
CJ Group pressured
None of the Korean corporate leaders testifying Tuesday directly implicated President Park in any wrongdoing.
Nor have any of the 53 corporate groups that gave money to the foundation, been accused of any wrongdoing in the case.
Sohn Kyung-shik, chairman of CJ group, an entertainment company did confirm that a top presidential aide did in the past ask him to replace his company vice president Ms. Lee Mi-kyung. Sohn said he heard the Blue House wanted the CJ Group to hire Choi’s friend Cha Eun-taek to create a creative cultural innovation center but the company rejected the idea. Cha is a music video director who has been charged with coercion and embezzlement for allegedly collaborating with Choi in pressuring corporations to award lucrative contracts to their private companies.
Also on Tuesday President Park told Saenuri Party leaders she would accept the result of an impeachment vote against her this week, but would not resign immediately and unconditionally, as demanded by opposition parties, according to a top party official.
There was media speculation that the president may offer to resign on a firm date in April to maintain party support against impeachment. The president was able to postpone a impeachment vote last week with she offered to step down, but only after the National Assembly arranges for an orderly and stable transition of power.
However the leaders of the three main opposition parties have rejected any proposal to extend her time in office.
After many protesters denounced the Saenuri Party during last weekend’s massive peaceful demonstrations across the country, there are indications that close to 40 ruling party members of parliament will support impeachment. That would be more than enough to reach the two-thirds majority needed for the measure to pass.
Youmi Kim contributed to this report.