Point Austin: The Gift Horse

No doubt faithful Chronicle readers can barely contain their glee over the news that Austin is reportedly one step closer to being named as the site of the new $3.5 billion (that's billion) Samsung chip plant. "It's too soon to break out the champagne," crowed the Statesman breathlessly Saturday, "but maybe not too soon to start chilling a few bottles." (Gee whillikers, Coxmen, get a grip – the rule is, No cheering in the press box.)

According to the Statesman via a company flack, a Samsung site-selection committee has recommended Austin to the board of directors, and a formal decision is expected within the next month or two. "Winning" this competition in civic abjection took $231 million in state, county, city, and school "incentives" – a pittance compared to the $500 million reportedly promised by New York – supplemented of course with the usual chorus of groveling by public officials of every stripe, from Gov. Perry, down through our ingenuous City Council members, right on down to the Manor school board.

During the couple of months before the deal is confirmed, it might be nice if ordinary Austinites get to meet our would-be partners in this arranged shotgun marriage with the biggest family-owned South Korean conglomerate, aka chaebol. For example, wouldn't you like to have a beer with Samsung Chair Lee Kun-hee, who at 4 billion dollars' worth is reportedly the richest man in Korea? Maybe you could ask him if he had anything personally to do with the $10 million in bribes his company allegedly spread around to buy the 1997 Korean presidential elections, a scandal that broke in July. Lee might have a clue, since his brother-in-law, Hong Seok-hyun, recently had to resign as Korean ambassador to the U.S. when it was reported that he had been a literal cash bagman for Samsung.

Or maybe you'd like to ask Lee about the 1996 deal that allegedly transferred roughly $9 million in illegal profits to his four children – thereby maintaining the family's hold on the company. You wouldn't be the only one asking such questions; last week the South Korean National Assembly said it wanted to talk to Lee about these and other matters. But Chairman Lee was suddenly unavailable. Indeed, we may see him next before his countrymen do. According to a Sept. 27 report in China's online Xinhua Daily, "Local media last week reported Lee has moved from Houston in the U.S. state of Texas to an undisclosed location in the United States."

So maybe that was Lee you saw two-stepping at the Broken Spoke, after all?

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The Law Stops Here

It's been a good long while since "Gone to Texas" meant you were on the lam from the authorities, but this whole Austin/Samsung deal has taken on an entirely new international significance. All this time, while local dignitaries were prostrating themselves before Samsung functionaries on two continents, maybe they also should have been consulting with multiparty South Korean opposition groups that have been trying to put an end to the political and business corruption seemingly endemic to the country's economy. Samsung has become a particular target, because of its size, but also because of its methods, which according to Korean sources are known for skirting the law. The Los Angeles Times reported last month, "Analysts say Samsung systematically recruited influential people, lobbied judges and prosecutors, and handed out money to politicians." The Times reported that the company's political machine has made it virtually immune to legal action, exemplified in the pardon issued in May by President Roh Moo-hyun to Samsung Vice Chairman Lee Hak-soo, after Lee Hak-soo was convicted on charges that he made $38 million (inflation's a bitch) in illegal political contributions in the 2002 presidential election campaign.

Again, we don't know if Chairman Lee was personally aware of his vice chair's generosity – that's another question you can ask him, should you run into him in the checkout line at HEB. But it seems useful for Austinites to know that Samsung's political practices apparently didn't change much between 1997 and 2002. Indeed, the 1997 scandal was only revealed when some (probably illegal) government wiretaps were released of Samsung executives discussing the political payoffs. (It's just a guess, but it makes a better story if the wiretaps were recorded on Samsung equipment.)

The presidential pardon of Lee Hak-soo suggests that if anything, the conclusion of Korea University politics professor Choi Jang-jip is an understatement: "The law stops at the gate of Samsung headquarters."

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Follow the Money

I know – we're not supposed to say anything bad about our prospective new neighbors, or houseguests, or esteemed benefactors, or padrones, or whatever the hell they are. We're all supposed to be walking on eggshells or, in the words of the Statesman editors, "Until [the decision is made], many in Central Texans [sic] will be holding their breath." (Now there's an image to ponder: a coven of somnolent Statesman editors, gathered around a conference table, slowly turning blue.) As the daily's Kirk Ladendorf helpfully explains, "Aside from the jolt of self-confidence and image enhancement, there are real dollars at stake, too."

We presume that refers to the $3.5 billion plant-cost mantra, or the $45 million in annual payroll, or the millions in water and electric fees glimmered by Austin Energy, or the millions more in supplies and services contemplated by the Samsung deal's drooling local promoters. Presumably, it doesn't refer to the millions in political payoffs that the Samsung Group is so accustomed to spreading all over Korea to buy both politicians and immunity from the law.

Apparently, little children, on this side of the world, the financial incentives all flow the other way.