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If you think the NSA is bad …

Protesters shout slogans condemning South Korean National Intelligence Service involvement in the country's last presidential elections, during a demonstration outside the Seoul city hall.
Ed Jones | AFP | Getty Images
Protesters shout slogans condemning South Korean National Intelligence Service involvement in the country's last presidential elections, during a demonstration outside the Seoul city hall.

Americans are apparently blasé about government eavesdropping.

In the days after former National Security Agency contractor Edward Snowden revealed that Washington spies extensively on its own citizens, polls found that about half of Americans have no problem with such snooping, as long as it protects them from terrorism.

But a scandal unfolding here in South Korea illustrates how such domestic snooping can easily harm a democracy.

(Read More: Microsoft Helped NSA Access Encrypted Messages: Report)

The imbroglio — which has sparked student protests and candlelight vigils around Seoul — actually consists of two episodes rolled into one.

The most recent scandal heated up when left-wing lawmakers accused the intelligence agency, the National Intelligence Service (NIS), of trying to protect its turf by leaking a sensitive and secret transcript in late June.

The document revealed details of a 2007 summit between North and South Korean leaders. In it, a now-deceased South Korean president, Roh Moo-hyun, discussed the possibility of redrawing the rival Koreas' sea border to help build peace.

At the other end of the table was enemy No. 1: former North Korean despot, Kim Jong Il.

The revelation had the potential to skewer Roh's party, now the opposition. For many South Koreans, the episode amounts to treason.

(Read More: America's NSA 'In Bed With" Germany and Most Others: Snowden)

But the motive for the disclosure may have gone deeper.

Lawmakers claim that the spy agency was attempting to distract the public from yet another explosive affair: a clandestine NIS propaganda operation to influence the December 2012 presidential election.

In late 2012, two NIS agents published thousands of online comments in support of Park Geun-hye, the conservative politician who was elected president in December. The young spooks tried to smear the political left, claiming some were North Korean sympathizers and communist instigators.

In the raucous political system of South Korea, it's common for the mainstream press and pundits to paint their opponents in extreme ways.

The propaganda campaign didn't stay secret for long. Last month, the former spy chief, Won Sei-hoon, was indicted on allegations that he personally orchestrated the operation; the former Seoul police chief is also being prosecuted for supposedly whitewashing the first investigation into the case.

(Read More: This Is Like the 'Cold War': Europe Fumes Over US Spying)

The NIS insists that it acted within legal bounds when declassifying the summit transcript. Under South Korean law, the head of the agency can request the release of state secrets if it does not pose a threat to national security.

It released the document out of concern for the "deepening schisms in the public" and its "negative effect national security," according to a statement issued on July 10.

An NIS spokesman could not be reached for comment.

Under South Korean law, documents of this sensitivity held by the National Intelligence Service would typically stay classified for up to 15 years. Two-thirds of lawmakers would have to agree, or a court order issued, before release into the presidential archive.

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President Park, who prevailed with a 3 percent margin over her liberal opponent, insists that she didn't know of the plot and didn't reap any advantage.

Her administration points out that the NIS was meddling under the previous right-wing presidency of Lee Myung-bak, a factional rival and hardly a friend of Park's.

But given her family baggage, she's having a hard time maintaining distance.

In the 1960s and 1970s, her father, the dictator Park Chung-hee, used the precursor to the NIS for election rigging and other dark arts.

The opposition is using the scandal to pin her to that legacy, say analysts. In Seoul, university students and activists have been protesting the revelations in recent weeks, calling for her removal.

According to polls, Park's popularity has slumped from more than half to about 40 percent in recent weeks. The Asan Institute, a Seoul-based think tank, says the decline is not necessarily a result of the spy scandal, but rather a return to "normal" levels after the election.

(Read More: Hackers Shut Down Korean Sites on War Anniversary)

"She might be completely unscathed or, in the worst case, impeached and removed from office," said Daniel Pinkston, the Seoul-based senior analyst at the International Crisis Group, a nonprofit.

The NIS has long been prone to scandal. Out of the 11 heads who have served over the past decade, Won is the eighth to be investigated.

Part of the problem, critics say, is that every president since 1988, the start of the democratic era, has sidelined the most talented officers in favor of political cronies. Under South Korean law, the NIS is required to stay neutral in domestic politics.

The result, they say, is a highly politicized (and some say bumbling) agency that gets into trouble every few years, and has failed to report key events such as Kim Jong Il's death in 2011.

Pinkston says the latest affair gives South Koreans an opportunity to fix the institutional flaws of the NIS, improving its intelligence-gathering abilities.

Call it a lesson for the US, where the National Security Agency, we now know, has nearly unchecked spying capacity. And while Americans apparently don't mind such a dragnet approach, South Korea shows how an unfettered spy network can go awry.

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