Rooting out military corruption
About 78 billion won ($67.9 million) in tax money was wasted on local development of the Surion, a utility helicopter. According to the Board of Audit and Inspection (BAI), Korea Aerospace Industries (KAI) cooked its accounts to pocket 54.7 billion won. The domestic aircraft monopoly recorded the development funds it raised from 21 companies as if it had been its own investment to draw 23 billion won in initial funds from the Defense Acquisition Program Administration (DAPA) and another 31.7 billion won on the pretext of buying technology from a foreign firm.
The Surion project cost a total of 1.3 trillion won; the defense acquisition authority claimed that the development would bring in 12 trillion won, saving on the import of military aircraft and the export of home-grown helicopters. But the project turned out to be an elephantine mix of corruption. Moreover, developers failed to localize the key power delivery system. And the quality of the helicopter was even questioned by local institutions.
KAI is the country’s largest defense company. It is the preferred bidder for the country’s ambitious 18 trillion won KF-X project to develop the country’s own fleet of multirole combat jet fighters. It needs outstanding credentials to lead the localization of next-generation military aircraft for the country. But the KF-X project has already experienced a major setback with Washington’s unwillingness to license the export of four core fighter technologies.
The procurement administration also must overhaul its acquisition and oversight process. In an internal audit, it was advised not to pay KAI under such questionable conditions. But the state office still went ahead with the payment.
Although the company has failed to localize technology, the government did not retrieve its funds of 15.6 billion won. The BAI has ordered disciplinary action for two DAPA officials in charge of the helicopter’s development. Because DAPA is so lax, companies have gotten away with overcharging and test manipulations to deliver cheap, flawed weaponry.
The country’s arms procurement program has seen one flop after another, from warships to aircraft. The BAI must continue with its investigation into all defense purchases to root out corruption and irregularities in arms dealings once and for all.
JoongAng Ilbo, Oct. 14, Page 34