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New York, September 17, 2001—The Committee to Protect Journalists
(CPJ) is monitoring events in South Korea with some concern, as the
government's crackdown on alleged financial wrongdoing by the country's
major media companies is likely to have profound implications for local
journalism.
Despite President Kim Dae-jung's international reputation as a champion
of democracy, capped in 2000 with his receipt of the Nobel Peace Prize,
he has long had a contentious relationship with the press at home. So
when police arrested three top media executives in mid-August on charges
of tax evasion and embezzlement, many characterized the move as an attack
on the independent press.
On September 4, the Seoul District Prosecutor's Office formally indicted
the three executives and 10 others on charges of tax evasion. The indictments
followed a months-long National Tax Service audit of South Korea's largest
media companies, the most extensive audit of a single industry under
the Kim administration. Twenty-three media companies currently stand
accused of tax evasion. If convicted, they could be forced to pay back
taxes and fines totaling over 505.6 billion won (US$393 million).
While the administration denies that the massive tax probe was politically
motivated, some newspaper executives say it is no coincidence that the
media companies most skeptical of President Kim and his Sunshine Policy
of engagement with communist North Korea have been among those hardest
hit by the audits. "The motivation behind this investigation is to muzzle
the Big Three papers, because they are critical of the president and
his policies," Kim Young-hie, vice president of JoongAng Ilbo,
told The New York Times.
The "Big Three" are Chosun Ilbo, JoongAng Ilbo, and Dong-A
Ilbo, and together they control about 70 percent of the country's
newspaper market. Their sheer size made them liable for larger fines.
State broadcasters and the liberal newspaper Hankyoreh, which
has been a longtime supporter of Kim Dae-jung, were also fined.
A parliamentary committee was established to investigate the fairness
of the investigations, but its work has been slowed by other political
crises. On September 3, the National Assembly passed a motion of no
confidence in a senior cabinet minister, resulting in the mass resignation
of Kim's entire cabinet.
The two events are not unrelated. The steady drumbeat of bad press has
certainly contributed to a steep decline in President Kim's approval
ratings, and legislators capitalized on widespread public disenchantment
to push the no-confidence motion.
The opposition Grand National Party has joined the embattled newspaper
owners in accusing the government of mounting a poorly disguised attack
against the private media as an institution. On the other hand, many
journalists and civil society groups have been outspoken in their defense
of the tax probe, arguing that the domestic media business is rife with
corruption and in need of a complete structural overhaul. Yet even supporters
of the audits agree that going after South Korea's powerful media tycoons
has obvious political repercussions, and may ultimately transform the
journalism industry. CPJ will be watching to ensure that press freedom
is not compromised in the process.
TIMELINE
January 11, 2001—During his New Year's press conference, President Kim
Dae-jung stated, "It is incumbent upon the news media to practice fair
and balanced reporting with responsible criticism. We are aware of the
high level of public demand for reform of the news media. I believe
all of us, media, academia, citizen groups, and the National Assembly,
should join hands in efforts to transparent and fair reform measures
for news media." Though government spokesman Park Joon-young later told
journalists that the president favored voluntary reform measures, domestic
media reports expressed some apprehension about Kim's remarks.
February 8—The National Tax Service launched a major audit of 23 media
companies in what authorities conceded was the most extensive investigation
of any single industry during Kim's administration.
February 12—The Fair Trade Commission began a separate audit into the
business practices of 13 newspapers and three major broadcast outlets.
April 13—The Regulatory Reform Committee, composed of seven government
officials and 13 academic and civic group leaders, announced its decision
to revive guidelines regulating newspaper marketing and distribution.
Committee members said the regulations, which were dropped by Kim's
administration in January 1999, were needed to curb unfair business
practices.
June 20—The National Tax Service released the results of its four-month
probe, announcing that 23 media companies would be fined a total of
505.6 billion won (US$393 million).
June 29—At a rally held by the Korean Federation of Press Unions and
a non-governmental pressure group called People's Action for Press Reform,
activists announced the June Declaration for Media Reform. The declaration
stated that "the freedom of journalism belongs not to privileged media
companies or journalists but to the people," and supported the audits
as long as they were conducted in a transparent manner. The groups added
that they would "strongly resist any government bid to control the media."
August 16—Government prosecutors petitioned the Seoul District Court
to approve warrants for the arrests of five media executives accused
of large-scale tax evasion and embezzlement.
August 17—The Seoul District Court issued arrest warrants for three
media owners on charges of tax evasion and embezzlement, but cited insufficient
evidence in rejecting prosecutors' requests for the arrest of two other
executives. The three owners were arrested the same day, and have been
held without bail while awaiting trial. They are: Bang Sang-hoon, president
and owner of Chosun Ilbo, Korea's biggest-selling newspaper;
Kim Byung-kwan, principal owner and honorary chairman of Dong-A Ilbo;
and Cho Hee-joon, controlling shareholder of Kookmin Ilbo, a
smaller newspaper owned by the Full Gospel Church. Hearings in the cases
of Bang and Kim are scheduled to begin on October 24; Cho's trial is
due to start on October 28.
August 20—The ruling and opposition parties agreed to establish a special
parliamentary committee to investigate the government's audits into
the tax and trade practices of 23 major media companies. The committee
will be composed of 10 lawmakers from the opposition Grand National
Party, eight from the ruling Millennium Democratic Party and two from
the splinter United Liberal Democrats.
September 3—The National Assembly passed a vote of no confidence in
Unification Minister Lim Dong-won, the principal architect of the president's
Sunshine Policy of engagement with North Korea. The United Liberal Democrats
(ULD), which had been an ally of the ruling Millennium Democratic Party,
voted with the opposition—splintering the ruling coalition and prompting
a cabinet reshuffle.
September 4—The Seoul District Prosecutor's Office formally indicted
three newspaper owners, who have been detained since August 17, as well
as ten media executives also accused of large-scale tax evasion. The
ten others indicted have not been detained; they have been identified
by Chosun Ilbo as:
-Bang Kye-seong, managing director of Chosun Ilbo
-Kim Byung-keon, former vice president of Dong-A Ilbo
-Song Pil-ho, vice president of JoongAng Ilbo
-Lee Jae-hong, head of the management office of JoongAng Ilbo
-Chang Jae-keun, former president of Hankook Ilbo
-Lee Tae-soo, chief of business support division of Daehan Maeil
-Chung Tae-shik, Daehan Maeil
-Kim Moon-jin, Daehan Maeil
-Kim Hak-kyun, Daehan Maeil
-Kim, accountant of Daehan Maeil
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