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Senior tax official mired in art scandal

Published: 03 Nov. 2009, 23:53

Gaain Gallery in Pyeongchang-dong, Jongno District, was raided by prosecutors as a part of an investigation into allegations that a tax official offered to drop tax probes if companies bought art from the gallery, which belongs to his wife. [YONHAP]

A senior tax official surnamed Ahn has been banned from leaving the country following allegations that he pressed construction companies into buying pricey paintings and sculptures from his wife’s art gallery in return for dropping tax probes.

Prosecutors are currently examining documents, accounting records and computer hardware from six construction companies and the Gaain Gallery that they obtained after they raided sites on Monday.

They also questioned workers at construction companies about the suspicious art purchases, adding that items at the gallery belonging to Ahn’s wife, whose surname is Hong, were sold at inflated prices.

Ahn is a senior figure in the National Tax Service.

“We are investigating an allegation that some construction companies bought paintings and sculptures at high prices from the gallery to halt tax probes into their firms,” a prosecutor, who asked not to be named, said.

According to prosecutors looking into the case, the companies under investigation bought art from the gallery to decorate newly completed buildings.

Under Korea’s law governing culture and arts promotion, construction companies are required to use 0.7 percent of their construction budget to buy art - sculptures, craft work and paintings - when they construct a building that is 10,000 square meters (107,638 square feet) large.

Prosecutors are investigating whether the tax probes into the construction companies were actually halted or limited, in return for buying the art.

Earlier this year, Ahn was suspended from work after an art scandal involving former National Tax Service Commissioner Han Sang-yool broke.

Han had been designated as the new National Tax Service head in December 2007. He allegedly offered an expensive painting called “Hakdong Maeul [Hakdong Village]” by the late Korean artist Choi Wook-kyung to then National Tax Service commissioner Jun Gun-pyo, his predecessor, in return for a promotion in 2007.

The painting is thought to be worth around 35 million won ($29,540).

Han left his post in January this year and flew to the United States in March. The investigation has stalled as Han hasn’t yet returned.

Jun was arrested while in office in December 2007 on bribery charges.

Jun’s wife, Lee Mi-jung, then put up the painting for auction at the art gallery belonging to Hong to cover her husband’s legal expenses.

Hong’s gallery, Gaain Gallery, is located in Pyeongchang-dong, Jongno District, central Seoul.

By Lee Chul-jae, Kim Mi-ju [[email protected]]