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Exclusive Probe Into Foreign Defense Firms May Widen

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  • Published Oct 6, 2009 6:14 pm KST
  • Updated Oct 6, 2009 6:14 pm KST

A US Firm Also Becomes Target of Investigation After Saab

By Jung Sung-ki

Staff Reporter

An investigation into bribery cases allegedly involving foreign defense firms is widening as more evidence of their illegal lobbying activities has emerged, a military source said Tuesday.

The move comes as the Defense Security Command (DSC) is conducting a probe into Saab, a Swedish defense and aerospace company, which is suspected of having offered bribes to the president of an advisory defense think tank at the National Assembly.

During an analysis of materials confiscated from the Security Management Institute (SMI), new evidence has emerged that another foreign defense firm allegedly gave bribes to the institute, the source told The Korea Times, asking not to be named.

He declined to identify the other foreign company concerned, but other sources said it is believed to be a U.S. defense manufacturer.

"Investigators are still analyzing confiscated goods and will summon related officials, if necessary," the source said.

DSC commander Lt. Gen. Kim Jong-tae said during a parliamentary audit of the administration Tuesday that his command was investigating six suspects and had secured four witnesses.

"Our command began an investigation earlier this year when we secured evidence that classified information on the KF-X program was leaked to the Swedish firm," Kim said. "Suspects will be summoned from Thursday for questioning."

Completion of the investigation is scheduled for late this month, he added.

The DSC is probing the case in cooperation with the Seoul Prosecutors' Office and the National Intelligence Service, the source said.

Under the authorization of the prosecution, the command raided Saab's branch office here and SMI headquarters in southern Seoul last month to seize documents and computer files in a bid to uncover their alleged connection.

Prosecutors traced the bank accounts of officials from Saab and SMI.

The source privy to the investigation said Saab was suspected of having offered 300 million to 500 million won to the SMI president, a former head of the state-funded Korea Institute for Defense Analyses, in exchange for classified information on a national fighter development project codenamed KF-X.

Observers say the ongoing intensive probe is in line with President Lee Myung-bak's push to eradicate irregularities in huge arms deals.

In August, Lee was quoted as saying that he believes that about 20 percent of the defense budget could be saved annually if military authorities didn't receive "rebate payments" in weapons deals.

He called for general defense-spending reductions amid the economic downturn.

Cheong Wa Dae later cut next year's budget proposal submitted by the Ministry of National Defense to a 3.8 percent increase from last year. The ministry had originally proposed a 7.9 percent increase.

"The probe of Saab seems to be the beginning of a wider investigation into illegal lobbying activities by foreign firms and their agencies," a defense expert said. "Depending on the results of the ongoing investigation, many arms acquisition projects, including the KF-X program, could be affected."

gallantjung@koreatimes.co.kr