Highway boss faces bribery inquiry

Prosecutors are investigating the head of the state-run Korea Expressway Corporation for allegedly receiving tens of millions of won in kickbacks from an engineering firm that worked on an expressway project, and yesterday evening requested a warrant to detain him. The investigation is an offshoot of a larger one into allegations of bribery in connection with the four-rivers project, an infrastructure plan championed by former President Lee Myung-bak.

According to sources at the Seoul Central District Prosecutors’ Office, Chang Seok-hyo, CEO of the Korea Expressway Corporation, was summoned on Tuesday, told he was a suspect and questioned about allegedly receiving bribes. The prosecutor said Chang may have received the kickbacks from the Yooshin Corporation after Chang was named CEO of the highway agency in June 2011. The prosecution said it suspects that Chang helped Yooshin become the construction inspector for a road-building project in Gyeonggi. In October 2011, Yooshin won a 26.6 billion won ($24.3 million) inspection contract for the Guri-Pocheon expressway project.

The four-rivers project, supported by the administration of former President Lee, was a plan to restore areas surrounding the country’s four major rivers - the Han, Geum, Yeongsan and Nakdong - at a cost of 22 trillion won.

Prosecutors have been trying to make the case that big construction firms colluded to win contracts for parts of the project. They are suspected of parceling out parts of the work, including design and safety inspections, to subcontractors like Yooshin. The head of Daewoo Construction and Engineering, for example, admitted on July 31 that he had received a bribe of 400 million won from Dohwa Engineering, a design firm involved in the huge restoration project. The prosecution reportedly asked how Chang had met the Yooshin chief executive and whether he had received any payments from the engineering firm.

In May and again in August, the prosecution raided the headquarters of Yooshin in Yeoksam-dong, southern Seoul, and questioned executives there in July. Prosecutors said they had developed evidence that the Yooshin head had amassed about 10 billion won in secret funds. They were reportedly told by some Yooshin officials that the funds had been used for bribes. Chang is said to be a confidant of the former president. He was the deputy mayor of Seoul in 2005-6, heading the Administrative Affairs Office. He also held jobs as the director of Seoul’s Office of Subway Construction and director of the Cheonggye Stream restoration project.

Yooshin won a design contract for the Lee administration’s grand canal project, a controversial proposal that was later replaced by the four-rivers project. Chang was the director of the grand canal task force on the former president’s transition team in 2008. Yooshin later won a design contract for a reservoir on the Nakdong River.

Chang is also under prosecutorial scrutiny for his activities related to the four-rivers project.

BY SHIM SAE-ROM, KWON SANG-SOO [sakwon80@joongang.co.kr]