hankyoreh

Body armor and a protective panel that were penetrated by bullets

Lobbying by a defense company resulted in it being granted general monopoly rights by the Ministry of National Defense on a body armor project worth up to 270 billion won (US$231 million) - even after the ministry had developed its own state-of-the-art body armor at a cost of 2.8 billion won (US$2.4 million).

Samyang Chemical, parent group of Samyang Chemtec - which came under fire last year for its production of penetrable body armor - hired 29 reserve soldiers over six years to work as lobbyists for affiliates. Seven were found to be retired generals employed under false pretenses in defiance of ethics regulations against the employment of former senior officials.

The Board of Audit and Inspection (BAI) announced the findings on Mar. 23 based on a review of the Ministry of National Defense, Defense Acquisition Program Administration (DAPA), and three other institutions for suspected improprieties in the acquisition of body armor and other military support supplies. According to the audit‘s findings, the ministry spent 2.8 billion won successfully developing liquid body armor capable of stopping armor-piercing bombs, with a decision made in 2012 to supply it to all troops. The military began work on developing the liquid body armor in 2007 after receiving intelligence that North Korea had begun supplying armor-piercing bombs developed to penetrate tanks and warships around 2006.

But in Oct. 2011, the liquid body armor project was abruptly halted on the orders of a Level 1 ministry official who oversaw the procurement of military support supplies. A former Army major general, the official also began pursuing a research and development project around the same time for a “new model” of multi-purpose body armor at the request of a former soldier with Samyang Chemtec - a form that was not capable of stopping armor-piercing bombs. Samyang Chemtec requested the use of defense performance standards for ordinary rounds from a specific North Korean rifle in judging the new body armor, which the official agreed to. At the time, Samyang Chemtec was the only company in South Korea with the rounds in question. The official also modified the project format to allow the granting of monopoly supply rights to a particular company - information that he then passed on to Samyang Chemtec. In 2012, the company was finally selected for an R&D project and received a contract for supplies worth 128.4 billion won (US$109.9 million) between 2014 and 2018, with additional guaranteed body armor supply rights worth 149.2 billion won (US$127.7 million) between 2019 and 2025.

Indeed, the ministry went on to purchase 35,200 sets of ordinary body armor at a cost of 26 billion won (US$22.3 million) from Samyang Chemtec in 2014-15 and supply it to overseas units. A June 2015 test by the BAI showed the body armor to be fully vulnerable by armor-piercing bombs.

While the official received 40 million won (US$34,200) from Samyang Chemtec, his wife was also employed at an affiliate under false pretenses and given a salaried position. A former Army field officer was given 51 million won (US$43,700) for leaking inside information from the ministry to the company; later, he was hired to the Samyang Chemtec board of directors. A Korea Military Academy (KMA) professor who received 110 million won (US$94,200) worth of stocks in exchange for smuggling out 534 rounds of test ammunition to provide to the company and issuing falsified armor test ratings was eventually hired as chief of a research institute affiliated with the company. While no evidence of his involvement in corruption has yet surfaced, the Level 1 ministry official’s predecessor was also found to have been hired at Samyang Chemical Engineering for a time after his discharge as an Army general.

The BAI has requested investigations or provided prosecutors with reference data on a total of 13 people to date, including three former generals, five former field officers, two government officials, and three Samyang Chemtec employees. It has also notified the Government Public Ethics Committee about nine people suspected of evading employment reviews according to the Public Service Ethics Act. In response to a BAI notification demanding the cancellation of Samyang Chemtec’s monopoly body armor supply rights, the ministry said it planned to “consider taking disciplinary action against the company as a wrongful provider and revoking its research and development confirmation document.”

Samyang Chemtec, the company implicated in body armor improprieties through illicit transactions with the military, is an affiliate of the Samyang Chemical Group, which experienced a windfall in the 1980s from tear gas manufacturing. While registered as a “weapons and ammunition manufacturer,” its main efforts have involved production of body armor and bulletproof helmets for the military.

The Samyang Chemical Group emerged out of Samyang Chemical Engineering, which was founded in 1975 and made huge profits from tear gas production during the military administrations of Presidents Chun Doo-hwan (1979-88) and Roh Tae-woo (1988-93) after its 1979 designation as a defense company. CEO Han Young-ja was successful enough to account for the single highest personal tax bill in the country in 1987 - ahead of the heads of both the Samsung and Hyundai groups. Han paid income taxes of 2.8 billion won (US$2.4 million) at a time when the starting salary at major South Korean corporations amounted to around 400,000 won (US$342 today; roughly $400 at the time) per month.

Connections between Samyang Chemical and military administrations also emerged in a 1996 investigation of slush funds involving former Presidents, with Han found to have provided a secret fund of 10 billion won (US$8.6 million) to Chun just ahead of the 1987 presidential election. Han was also accused of bribery in connection with the so-called “Yulgok Project scandal” in 1993.

Samyang Chemical continued carrying out defense projects even after declaring a halt to its tear gas production in a 1989 parliamentary audit. Many have called it a hotbed for the so-called “military mafia,” with former generals and other retired soldiers hired to its various affiliates - including Chemtec, the company implicated in the body armor improprieties. A BAI audit showed a total of 29 former generals and other Army officers working at Chemtec and other Samyang Chemical companies between Feb. 2008 and May 2014. Sources have described them as a key link between the group and the military.

By Kim Ji-eun and Kim Jin-cheol, staff reporters

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