Board of Audit and Inspection Confirms Legal Violations in Presidential Office Relocation Construction...Security Office Executive Involved in Misconduct (Comprehensive)

"Security Office Executive Colludes with Broker, Embezzles 1.57 Billion Won"
Unable to Identify Kim Geon-hee's Connection in Vendor Selection Process

[Image source=Yonhap News]

On the 12th, the Board of Audit and Inspection (BAI) revealed that it detected misconduct by a senior official of the Security Office during the construction process of relocating the presidential office and residence, and requested dismissal. It also confirmed violations of laws and regulations in supervision and completion during the relocation construction of the presidential office and residence. The BAI explained that it did not find any connection between First Lady Kim Keon-hee and the selection process of the construction company.

On the same day, the BAI announced the audit results related to "illegal suspicions regarding the relocation and expenditure of the presidential office and residence," and uncovered misconduct by a senior official of the Security Office during the installation of bulletproof windows.

A senior official A of the presidential Security Office, who was responsible for the bulletproof window installation project, selected a broker B, with whom he had a close relationship involving meals and trips for several years, as the de facto project manager at the end of March 2022. Although A knew that B was merely a broker, he allowed B to inspect the construction site and arbitrarily negotiated the contract amount. In April of the same year, without consulting the contracting department, A instructed B to begin manufacturing bulletproof glass and window frames.

In particular, between April and June 2022, A was aware that the installation costs for the bulletproof windows requested by B were likely inflated, but he did not order any cost calculations or price investigations from his subordinates, resulting in a high-priced contract.

B submitted an estimated amount more than five times the actual total cost during three private contracts between the private construction company he introduced and the Security Office and Ministry of the Interior and Safety. Of the total project cost of 2.04 billion KRW for the bulletproof window installation, the actual cost including company profits for manufacturing and installing bulletproof glass, window frames, and film was only 470 million KRW. B, who established a company on paper under his spouse's name, embezzled 1.57 billion KRW through this company as a commission for contract mediation.

Moreover, A pushed forward construction work not budgeted during the Security Office building relocation outside of contracts, inflated costs of other projects to cover construction expenses, demanded payment of construction costs from related personnel, and forced related personnel to purchase land at inflated prices from acquaintances, engaging in repeated misconduct.

The BAI stated, "We requested disciplinary action (dismissal) against A for improperly handling the selection of contractors, cost calculations, and construction supervision of the bulletproof window installation project," and explained, "We requested an investigation by the Supreme Prosecutors' Office last October for A, B, and C, the project and contract manager of the construction company."

Ministry of the Interior and Safety Overpaid 320 Million KRW in Construction Costs

The BAI revealed that laws related to national contracts and construction were not properly followed in the relocation of the presidential office and the repair of the residence.

In particular, the Ministry of the Interior and Safety neglected the post-contract cost settlement under the condition of post-cost review, resulting in an overpayment of 320 million KRW in construction costs.

The BAI pointed out that the Secretariat was negligent in supervising the residence repair construction. They did not establish a detailed project plan from the budgeting stage, started construction before securing the budget and signing contracts, and confirmed violations of the "Framework Act on the Construction Industry" such as subcontracting to unqualified companies.

The BAI said, "In future similar projects, to prevent violations of laws related to national contracts during the entire process of contract, supervision, and completion, no construction should begin before securing the budget and completing design. Detailed project plans must be established and measures to prevent recurrence should be prepared." It added, "We requested thorough verification of the qualifications of participating companies and that construction and design companies submit drawings accurately reflecting the actual construction details to be used in completion inspections, emphasizing strict management of related tasks."

Furthermore, the BAI notified that personnel data referencing responsibility would be sent regarding the former presidential secretary who oversaw the relocation project from the Presidential Transition Committee task force to the presidential office and residence relocation, to be considered for future public office reemployment.

The Ministry of the Interior and Safety was instructed to devise measures to recover the overpaid construction costs related to the office relocation and to strictly manage related tasks.

The BAI judged that there was insufficient evidence for allegations of abuse of authority and violations of the State Property Act in the decision-making process related to the presidential office relocation.

Presidential Office: "Will Address Procedural Deficiencies and Establish Recurrence Prevention Measures"

In response, the presidential office stated on the same day, "The BAI audit results confirmed that there was no preferential treatment related to the relocation of the presidential office and residence," and added, "We will review procedural deficiencies caused by the urgency and security concerns during the relocation process and establish measures to prevent recurrence."

The presidential office explained, "We signed private contracts with companies qualified for each major type of construction related to the relocation of the presidential office and residence," and said, "For highly secure facilities directly related to national security, considering the urgency and security requirements of the relocation, it is appropriate to proceed with private contracts under the 'Act on Contracts to Which the State is a Party,' as has been the case in previous administrations."

A presidential office official added, "Along with the justification for private contracts, the BAI confirmed that there was no preferential treatment as the company profits were within normal levels after verifying whether excessive construction costs were paid. The senior Security Office official accused of personal corruption has been excluded from duties, and a prosecution investigation is underway. Additional measures will be taken based on the investigation results."