The project to develop the "Korean-style electronic warfare aircraft (electronic warfare aircraft)," which neutralizes enemy air defenses and wireless command-and-control systems, is a core defense program worth 180 billion won. This mega project was recently caught up in a "bribery scandal." Investigators detected indications of illicit exchanges worth about 460 million won involving an official at the Defense Acquisition Program Administration and employees of LIG Defense&Aerospace (LIG D&A), which won the project. LIG D&A said, "The electronic warfare aircraft project is a separate program won with our own technology," and vowed to stake the company's future on a truth battle with prosecutors.
◇ DAPA official who gave LIG top marks… pocketed 460 million won in kickbacks through laundering
On the 3rd, according to the defense industry and according to legal sources, at the center of the case is A, a Grade-5 official (49) at the Defense Acquisition Program Administration. Prosecutors said A served as a proposal evaluation committee member for six defense projects totaling 91.5 billion won from late 2021 to late last year. A's score sheets were said to be excessively skewed. In 16 of 20 categories, A gave LIG D&A the highest marks and competitors the lowest.
Lee Yong-wook, the DAPA Administrator, said, "Evaluation committee members are randomly selected from volunteers, and because people usually do not volunteer, the structure makes it more likely that those who are proactive get the chance," adding, "I wondered how a project could be won just because one particular evaluator gave high scores, but the evaluations were conducted in a way that only adjusted scores that deviated from the standard deviation, even when extremely biased high scores were given." In other words, even if "favoritism-style" scores were given, the scores were not invalidated but were aggregated after a certain level of adjustment.
In return, A is believed to have received 320 million won in cash and a recommendation right to award subcontract service contracts worth 2.2 billion won. Including separate finder's fees and the like, the total A received came to 460 million won. To avoid the risks of directly exchanging cash, they signed sham service contracts, sent money as consulting fees, then converted it back into cash and funneled it to accounts under borrowed names in a multi-layered scheme.
On the 25th, A and those involved in the money laundering said they "admit most of the charges."
◇ Focus on whether it is linked to the Korean-style electronic warfare aircraft… LIG says "it underwent a fair evaluation"
The key question is whether this case is connected to the Korean-style electronic warfare aircraft project. Prosecutors said, "Three of the six projects were core precursor technologies for the research and development of the Korean-style electronic warfare aircraft won by LIG," adding, "Based on the three projects influenced by A, LIG D&A is assessed to have secured a favorable position in the competition." In other words, they allegedly secured the large-scale electronic warfare aircraft project by providing bribes worth about 400 million won.
The total budget for the Korean-style electronic warfare aircraft project is 177.77 billion won. Including follow-on projects, it is forecast to exceed 3 trillion won. The project is to develop a special-mission aircraft that collects and analyzes threat signals from neighboring countries and, in wartime, paralyzes enemy air defenses and wireless command-communication systems through electronic attack.
LIG D&A teamed up with Korean Air Lines and was selected as the preferred negotiation partner in Dec. last year. The competitors at the time were a consortium of Korea Aerospace Industries (KAI) and Hanwha Systems.
In response to the prosecutors' announcement, LIG D&A drew a firm line, saying there is no connection between the Korean-style electronic warfare aircraft project and the bribes. In a statement, LIG D&A said, "There are claims that the tasks in which the official participated as an evaluator formed the basis of the 'electronic warfare aircraft system development,' but in reality they are not related to the electronic warfare aircraft project's critical technology elements (CTE)," adding, "The official did not participate as an evaluator in the electronic warfare aircraft project, and the project was selected through a fair evaluation process with a large score gap."
◇ If illegality is recognized, domestic new orders will effectively be fully suspended
If the link between the bribes and the award is recognized at trial, LIG D&A will likely see domestic new contract awards effectively come to a full stop. The Administrator said, "Under the Defense Acquisition Program Act, bid participation eligibility is restricted for two years, and even after that, demerit points apply in the bidding process for three years." Trust could also fall in the global defense market, narrowing the path for overseas exports.
There could be major losses at the national level as well. Electronic warfare aircraft are a core weapon that determines victory in modern warfare and a key aviation technology possessed only by a few countries, including the United States and Russia. Even with no letup, development will be completed in 2034; if the contract with LIG D&A is voided, the force integration timeline could be delayed indefinitely.
The Criminal Division 11 of the Suwon District Court (Presiding Judge Song Byung-hoon), which is handling the case, decided to hold a hearing on the 29th of this month.