DAPA chief vows strict response to LIG D&A bribery allegations

Defense Acquisition Program Administration chief Lee Yong-cheol said Tuesday that corruption allegations surrounding LIG D&A had "dealt a gravely damaging blow to the organization's reputation," pledging a firm response. He also acknowledged uncertainty over how to impose sanctions, warning that barring the company from research and development participation could cause serious disruptions to military force buildup.

Lee made the remarks at a national audit of the DAPA conducted by the National Assembly's National Defense Committee, responding to questions from Reform Party lawmaker Cheon Ha-ram about the bribery case involving LIG D&A. "I believe we must respond with utmost strictness so that this kind of incident never recurs," Lee said. "It is desirable to respond on principle."

He added that the bribery case had "dealt a gravely damaging blow to the reputation of an organization I was deeply involved in founding," calling it "a matter that leaves me deeply displeased."

The questioning focused on whether LIG D&A should be barred from bidding on government contracts. Cheon said the amount of bribery covered by the indictment — about 460 million won ($344,000) — was the largest ever involving a DAPA employee since the agency's establishment. Lee acknowledged that was likely the case "based on the indicted bribery amount."

Lee said that under standard rules, companies found to have offered bribes are subject to bid restrictions, with fines imposed only as an exception.

Ahead of a review committee meeting scheduled for Oct. 20, Lee said the decision was not his alone to make. "The chief cannot unilaterally set the policy — it is a matter to be decided by a review committee that includes civilian members," he said, while stressing that "the basic policy itself must be strict."

He drew a distinction, however, between the impact of bid restrictions tied to contracts and sanctions applied to research and development agreements. While companies under bid restrictions can still enter into negotiated contracts under certain conditions, a ban on R&D participation could have a greater effect on force buildup, he said.

Lee said irregularities had also occurred in the technology project agreement portion of the case, noting that sanctions including financial penalties and R&D participation bans — or both — could be applied to the agreement. "Under the National Research and Development Innovation Act, a company barred from participation is excluded from all state-funded projects," he said. "Because there are no exceptions, this would cause very significant disruptions to force buildup, so I am giving some thought to the sanctions on the agreement side."

Cheon urged the agency not to treat LIG D&A differently from past precedents on the grounds of the company's large supply share or the difficulty of finding a replacement.

"All 27 cases in which DAPA has sanctioned a company for bribery since the agency's founding have resulted in bid restrictions," Cheon said. "Not once has a bribery case been resolved with a fine instead." He also noted that all three sanctions DAPA had imposed on LIG D&A over the past decade had been fines, while clarifying that none of those three cases had involved bribery.

"It is hard to accept imposing only a fine simply because the company is a large conglomerate that is difficult to replace," Cheon said, urging the agency to "make a decision that puts ethics and integrity first."