By Ryu Jin
Staff Reporter

The Seoul branch of the Boeing Company, a major U.S. defense contractor, finds itself in a tight spot after one of its Korean agent companies recently was investigation.

The police are looking into the possibility that the agency for Boeing’s Apache attack helicopters, identified only as ``A Corp,’’ bribed a senior procurement officer in the Korean military.

According to police, the head of A Corp. was arrested on Friday for allegedly giving Lee Won-hyong, a retired Army major general who served as key procurement officer, 5 million won ($4,220). Lee was also arrested.

Boeing Korea has denied any link with the bribery charges.

``The Korean authorities have not contacted Boeing about the reported situation and the company has no reason to believe the investigation relates to its business with the company,’’ Maggie Kymn, communications director for Boeing Korea, told The Korea Times.

Apache is one of the candidates for the Defense Ministry’s 2.1 trillion won (roughly $1.6 billion) AH-X project. Kymn dismissed any notion that the alleged bribery charges are connected with the AH-X project, which is not yet at the bidding stage.

The latest event would be doubly embarrassing for Boeing, since it recently fired two top executives after serious allegations of ethical misconduct regarding U.S. contracts. And, although he was not implicated in the affair, the company’s long-time CEO, Phil Condit, resigned shortly thereafter.

Boeing made inroads into South Korea in 1969 and has participated in several major arms contracts with the country, including the next generation F-X fighter jet project and the F-15K in 2002.

The AH-X project originally envisaged the development of 36 attack helicopters for the South Korean Army by 2008, with three helicopters _ Boeing’s AH-64D Apache Longbow, Bell’s AH-1Z and Kamov’s KA-50 _ considered as the most viable candidates. But the project has been delayed indefinitely due to budget shortages and protracted negotiations as well as mounting criticism from the public.

Though no concrete link has been found so far, Boeing Korea is trying hard to block any possible implication from the arms bribery scandal, since it could be a serious blow to its image in the country.

``Boeing expects its consultants to commit themselves to the highest standards of ethical conduct, and Boeing will not tolerate anything less,’’ Kymn said. ``Boeing is suspending the A Corp. relationship pending a review.’’


jinryu@koreatimes.co.kr