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President vows to investigate defense projects

July 18,2017
President Moon Jae-in vowed on Monday to scrutinize corruption allegations surrounding major defense projects of previous administrations, ordering the Blue House to create a system to fight corruptions.

The move was made amid an ongoing investigation by the prosecution into alleged ties between the procurement agency and one of the country’s largest defense contractors.

“Rooting out irregularities and defense industry corruption is the earnest desire of the people who elected this administration,” Moon said in his opening remark for the senior presidential secretariat meeting.

“It is a task that cannot wait, and it is a task that we must accomplish. I want to advance a national anticorruption campaign by restoring the presidential anticorruption consultative body, established and operated during the Roh Moo-hyun administration.”

Moon said the presidential anticorruption arm was established in 2004 and contributed to improving the country’s ranking on transparency and anticorruption indices.

“But it was stopped in the next administration [of Lee Myung-bak], and as we all know, the country faced severe corruptions and irregularities,” Moon said.

He vowed to end defense industry corruption, citing a recent audit into the military helicopter project of the Park Geun-hye administration. Saying defense corruption benefits the enemy, Moon said the prosecution and the Board of Audit and Inspection need to address cases independently whenever necessary, but that a systematic effort is needed to completely end defense industry corruption.

He ordered the office of senior secretary of civil affairs to establish a team of concerned authorities to achieve this. The plan, if necessary, should be discussed at the presidential anticorruption consultative body, Moon added.

Moon’s order came as the Board of Audit and Inspection has asked the prosecution to investigate the head of the nation’s defense procurement agency, a college friend of former President Park appointed during her presidency, for breach of trust over an accident-prone helicopter project.

The prosecution is also investigating one of the country’s biggest defense companies for various corruption allegations. The audit board said Sunday it requested the prosecution on June 21 to conduct an investigation into Chang Myoung-jin, head of the Defense Acquisition Program Administration (DAPA), based on its audit of the Surion helicopter project. The audit concluded that the helicopters contained various defects including an icing problem, a crucial safety issue that can lead to engine failure during flight. Although the DAPA was aware of the defects, it delayed the test and allowed the Korea Aerospace Industries (KAI), the builder of the helicopters, to supply the aircraft, the audit board said.

The Surion project, code-named KUH-1, started 11 years ago to replace the Army’s aged transport utility helicopters. In 2006, the defense procurement agency decided to independently develop new transport utility helicopters and KAI was selected as the developer. For six years since June 2006, nearly 1.3 trillion won ($1.15 billion) was invested for technology development alone. In July 2012, Surion was certified as combat ready and mass production began. In December 2012, the helicopters were operationally deployed to the Army.

After Surion failed to pass 29 out of 101 test categories in March 2016, the DAPA stopped KAI in August of that year from supplying the helicopters. But Chang trusted the KAI’s promise to resolve the problems, particularly the anti-icing defects, by June 2018 and allowed the firm to resume the supply, the audit board said.

The audit board also said Chang convinced the military leaders that the Surion helicopters had no safety issue. He also changed the labeling of the anti-icing capability from a safety management item to a general item. “This was practically giving a favor to KAI,” an audit board official said.

Chang, a weapons developer with the state-run Agency for Defense Development, was appointed to head the DAPA by Park in November 2014. A classmate of Park’s at the electronic engineering department of Sogang University, Chang and Park were laboratory partners during their junior year. He vowed to root out perennial corruption from the defense industry, but he himself is now facing an investigation.

The DAPA has long promoted Surion as the country’s advanced arms systems. As of now, the Army operates 60 Surion helicopters and more are to be supplied to the police and the marine forces. The project is worth more than 3 trillion won, including the technology development expenses.

The project went through audits in the past, but the latest audit revealed shocking findings on defects of the accident-prone helicopters.

The first audit took place in 2015 during the Park administration, as a part of a special audit on defense industry corruptions. The audit concluded that the KAI inflated the costs during the development process and scored 54.7 billion won of unjust profit. Two DAPA officials were prosecuted on charges of conspiring with the KAI over the allegation.

After a series of accidents were reported, the Board of Audit and Inspection conducted the second audit from March to May 2016. Another audit followed from October to December later that year to review the helicopters’ test and the government’s certification process. The Board of Audit and Inspection announced its conclusion based on the two audits on Sunday.

According to the audit report, five incidents, in which the windshields of aircraft were destroyed, were reported from February 2013 till January 2016. In August 2014, an accident involving an engine failure was reported. In January and February 2015, two Surion helicopters had to make emergency landings during flight exercises as their engines suddenly stopped when anti-icing systems were turned on. In December of that year, one helicopter crashed due to the same problem.

“Surion is a newly developed aircraft, so unexpected problems may be seen,” said the audit official. “But the issue is that the DAPA failed to take necessary follow-up measures to resolve the problems.”

After the crash, a belated test was conducted in March 2016 to check on the helicopter’s functions and an icing issue was discovered. The DAPA still allowed the KAI to continue supply, only based on its promise to make an improvement by June 2018. The Audit Board said the DAPA not only lost 457.1 billion won in compensation it supposed to receive from the KAI, but also another 20.7 billion won to repair already purchased helicopters.

The audit board’s announcement was made as the prosecution raided the KAI on allegations of corruption over major defense projects. A prosecution source told the JoongAng Ilbo its investigation into Chang and the DAPA, and the probe into the KAI, all relate to defense industry corruption.

BY SER MYO-JA, LEE CHUL-JAE [ser.myoja@joongang.co.kr]