Third Parties in LIG D&A Defense Corruption Indictment Point to Organized Crime [News File]

The defense industry corruption scandal involving the Defense Acquisition Program Administration (DAPA) and LIG D&A, through which hundreds of millions of won in bribes were exchanged to manipulate defense projects, features two unfamiliar individuals alongside the six indicted defendants in the indictment obtained by SBS: Mr. D and Mr. E from LIG D&A. Notably, Mr. D, who appears to be at the executive level, was seen soliciting illicit project contracts alongside the indicted LIG D&A Vice President Mr. B and Managing Director Mr. C.

Speculation was rampant within the defense industry, with insiders noting, "At the time of the crime, Mr. B and Mr. C were at the rank of department head or lower, meaning they lacked the authority to independently authorize a bribe of around 300 million won," and adding, "There was clearly a higher-up, but the prosecution's investigation seems to have stopped midway." The indictment thus reveals clues that lend weight to these industry rumors. Mr. D may either be one of the superiors above Mr. B and Mr. C or a stepping stone leading to them. Given that even Mr. E, who appears to be a regular employee, was mobilized, it raises the possibility that multiple executives and employees at LIG D&A joined forces in an organized crime.

  According to the indictment for the arrest and prosecution of Grade 5 DAPA official Mr. A, Mr. B and Mr. C of LIG D&A began lobbying Mr. A starting in October 2021, asking him to "provide continuous assistance as many projects in the electronic warfare sector are planned going forward." A solicitation meeting was also arranged at a restaurant in Anyang, Gyeonggi Province, between late 2021 and early 2022. At this time, Mr. D attended alongside LIG D&A's Mr. B to ask Mr. A for assistance in winning contracts in the electronic warfare sector.

The indictment specifies that the third party, Mr. D, is a former head and research fellow of the LIG D&A Research Institute. LIG D&A's Mr. B is known to have held the position of research institute head at the time of the crime, which suggests that Mr. D was Mr. B's superior. The fact that Mr. D attended the project solicitation gathering serves as evidence that Mr. D was also aware of the illicit transactions to a certain extent. With this level of information, LIG D&A should be able to identify who Mr. D is.

The bribe amount given by LIG D&A to DAPA official Mr. A totals 320 million won. This is excessively large for an amount that a research institute head at the department-head level and a headquarters general manager at the managing-director level could have independently authorized at the time. An executive at defense firm Company O pointed out, "It is impossible for 320 million won in bribes to be given to a DAPA official without the intervention of direct superiors and high-ranking officials who oversaw the indicted Mr. B and Mr. C from 2021 to 2025," and added, "I cannot understand why the prosecution's investigation did not trace back up to the higher-ups."
 
According to the indictments of Mr. A and Mr. B secured by SBS, LIG D&A illicitly secured projects A, B, C, D, E, and F from October 2021 to August 2025. Projects were funneled to LIG D&A through methods where Mr. A participated in proposal evaluations to give LIG D&A the highest scores while giving competitors the lowest scores. Due to LIG D&A's corruption, competitor companies repeatedly tasted the bitter cup of lowest scores and defeat.

Attention must be paid to Project E, hosted by the Defense Technology Promotion Institute, which underwent evaluation on July 21, 2023. According to the indictment, following a request from LIG D&A's Mr. C, DAPA official Mr. A received a preliminary briefing regarding Project E from LIG D&A's Mr. E. Subsequently, during the proposal evaluation, Mr. A selectively asked questions that were favorable to LIG D&A.

This is a textbook defense corruption tactic where a defense contractor contacts evaluation committee members in advance to instill the strengths of their proposal and elicit favorable questions during the evaluation presentation. Mr. E of LIG D&A, who appears to be part of the working-level research staff, must have already known what kind of wrongdoing he was committing at that time. Mr. E should also be regarded as an accomplice to the defense corruption.
  This case is called the largest defense corruption scandal in history due to the affiliations and profiles of the indicted individuals and the massive amount of bribes exchanged. The methods described in the indictment are also extreme. From the night before the proposal evaluation until the morning of the day itself, LIG D&A provided alcohol and massage entertainment to DAPA evaluators. They traveled to multiple golf courses to design bribery delivery plans and rewards. They even laundered funds and dragged Mr. A's family members into the corruption. Through these means, LIG D&A illicitly won six defense projects.

Broadly speaking, in addition to the indicted LIG D&A employees Mr. B and Mr. C, executive-level Mr. D and regular-employee-level Mr. E, who avoided indictment, also participated in the crime. Based solely on the contents of the indictment, this incident can be defined as an organized crime by LIG D&A. It is a crime committed against the state and has inflicted heavy damage on competitor companies. Would department-head-level or greenhorn-managing-director-level employees voluntarily risk their lives with burning corporate loyalty and use their own money to embark on a crime of this scale?


In a press release on August 21 last year, LIG D&A stated, "We will make ceaseless efforts to establish a compliance system that meets public expectations." Corporate compliance refers to fulfilling social responsibilities by strictly adhering to external laws, internal regulations, and ethical standards. Considering that LIG D&A triggered the largest defense corruption scandal in history, its compliance system must have been asleep all this time.

If LIG D&A's press release stating that it will establish a compliance system is sincere, the company must investigate on its own through what decision-making channels Mr. B, Mr. C, Mr. D, and Mr. E resolved, planned, and executed the crime. There is also a need to uncover the true identity of the funds used as bribes. It is necessary to track whether any high-ranking officials cowardly hid themselves. Only when LIG D&A does that much will it earn the qualification to discuss the establishment of a compliance system.
※ Please note: This article was translated by AI and may contain errors.