CJ probe ties ex-top taxman to bribery

By Choi Kyong-ae

Another bribery scandal has hit the National Tax Service (NTS).

On Tuesday, prosecutors raided the house of former NTS Commissioner Jeon Goon-pyo who allegedly received bribes of $300,000 in cash and a luxury watch ― from CJ Group in exchange for favors in July 2006 around his inauguration as chief of the tax agency through a junior NTS official.

They also raided an NTS office in Seoul to take CJ’s tax-related documents in its probe into the cash-for-tax favor scandal in 2006, an official from NTS said.

“The prosecution seeking information on such misconduct is generally a positive development for the economy in the long run,” Kim & Chang lawyer Jeffrey Jones said via email.

Reportedly, the NTS overlooked CJ’s wrongdoings in the same year when CJ Group dodged more than 350 billion won in corporate and income taxes in spite of evidence of wrongdoing. But the NTS didn’t confirm it.

In a questioning before he was arrested on Saturday, Heo Byung-ik, former assistant commissioner for corporate taxation, “acknowledged he took the bribes from CJ but argued he delivered them to Jeon at CJ’s request,” a spokesman for the prosecution said asking not to be named.

Jeon is barred from leaving the country and expected to be summoned as early as this week for questioning, said the spokesman. But Jeon denied the allegations, according to Yonhap News Agency.

In a disgrace to the tax agency, eight out of 19 former NTS commissioners excluding the incumbent Kim Duk-joong have records of being arrested or questioned due mainly to their engagement in illegal fundraising or taking kickbacks. The NTS confirmed the figures.

Jeon, who served three and a half years in prison for similar charges from early 2008, may face another jail term if he is found guilty.

Currently, prosecutors continue their probe into CJ for tax evasion. CJ Group Chairman Lee Jay-hyun is behind bars on charges including embezzlement and tax evasion.

Since President Park took office early this year, the NTS has been aggressive in bringing the “underground economy” above ground to collect as much taxes as possible to help finance the government’s costly welfare and other policies.

NTS Assistant Commissioner for Investigations Kim Young-kee said last week, “We will continue to be strict against offshore tax evasion, tax evasion by the super rich, conglomerates and high-income independent businesses.

The NTS collected taxes valued at 82.12 trillion won ($73.9 billion) as of the end of May, down 9 trillion won from a year earlier. It is targeting to collect 210 trillion won worth of taxes for this year, up from the 192.1 trillion won collected last year.