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South Korean Company Under Bribery Charges Involving US Military Garrisons

The SK Engineering and Construction (SK E&C) in South Korea is suspected for bribery charges regarding a massive relocation project for the U.S. military.

In 2008, SK E&C won a contract for the relocation and expansion of U.S. forces out of their bases currently north of Seoul and toward the United States Army Garrison-Humphreys in Pyeongtaek.

Prosecutors searched the SK E&C headquarters in Seoul this Friday to find out exactly how SK managed to get selected for the contract. Dozens of prosecutors seized related documents, hard drives and other materials related to the project.

Credit: Steven Satkwoski / U.S. Army Corps of Engineers

Credit: Steven Satkwoski / U.S. Army Corps of Engineers

This project is the largest in the history of the U.S. Department of Defense with U.S. expenditures estimated almost $3.2 billion. In a report released in 2013 by the U.S. Senate Armed Services Committee, US expenditures are “estimated at $3.2. billion, and that does not include an estimated $100-$200 million in transition costs for sustaining facilities until the move is completed.”

The relocation project was first scheduled to develop in 2008, but was delayed twice in 2012 and in 2016. The project was announced to start once again in September.

When the company won the contract in 2008, they won the $400 million worth project to landscape the site and build the infrastructure including roads, water, sewage and electrical facilities.

The South Korean prosecution suspects that SK E&C has handed nearly $2.94 million (3.2 billion Won) in bribes to Duane Nishiie to win the construction project. Nishiie was the U.S. Corps of Engineers contracting officer at the time.

Credit: Yonhap News TV via  YouTube

Credit: Yonhap News TV via YouTube

The company is accused of creating slush funds with a former official from the U.S. Forces Korea. Lee Seung-Ju was recently taken into custody and testified he had passed the money to Nishiie.

According to the U.S. Department of Justice, Lee and Nishiie were indicted in September for mail and wire conspiracy, bribery, wire fraud, and conspiracy. Both Lee and Nishiie has allegedly been bribed through in cash and other payments and concealed the money using foreign bank accounts.

In 2015, SK had been raided by the South Korean police again under suspicions involving more than $900,000 in alleged misuse of funds.