DOD Bid Scandal Falls to New Depths DOD Bid Scandal Falls to New Depths – NTK Network

DOD Bid Scandal Falls to New Depths

A Korean aviation company is in hot water for failing to disclose that it was under investigation for corruption when it won U.S. defense contracts, another development in a series of scandals for the embattled company.

By NTK Staff | 06.26.2018 @8:59am
DOD Bid Scandal Falls to New Depths

A Korean aviation company is in hot water for failing to disclose that it was under investigation for corruption when it won U.S. defense contracts, another development in a series of scandals for the embattled company.

Korean Aerospace Industries, which is currently vying for the $16 billion T-X Trainer contract with their partner Lockheed Martin, is also mired in scandal for its controversial $150,000 payments to President Trump’s former lawyer Michael Cohen, an arrangement now under FBI investigation.

In this latest scandal, KAI failed to disclose it was under investigation for corruption by the Korean government and even had several former executives indicted for a litany of serious charges. Just two weeks after the indictments, KAI passed the U.S. Air Force business integrity review.

The Washington Post reports:

“On Oct. 11, nine current and former executives at Korea Aerospace Industries were indicted in Seoul on charges that included bribery, embezzlement and defrauding the South Korean government, records show. Just two weeks later, KAI cleared a business integrity review by the U.S. Air Force and won a contract worth up to $48 million — its largest ever from the Air Force — to maintain fighter jets.

Experts said the criminal case should have subjected the company to additional scrutiny. But KAI did not alter filings it had previously submitted to the U.S. government certifying that none of its executives were under indictment, according to a public database of federal contracting information.”

News of this scandal comes just a few weeks after the Washington Post reported that Cohen was under investigation from taking payments from several companies, including KAI.

KAI claims the payment was not related to their contract with Lockheed Martin but was instead for Cohen’s legal advice on accounting services. However, the Post reports that “Cohen has no known experience in government accounting.”

The report also raises a series of important questions, such as how could Cohen even know to contact and pitch his services to a foreign defense firm? And if KAI reached out to Cohen, despite his lack of experience in accounting, what were their motives? KAI’s dealings with Cohen are the subject of an ongoing FBI investigation which may turn up more details on the suspicious relationship.

To complicate the matter further, KAI has a questionable history on a range of other issues. KAI was raided multiple times by prosecutors and investigators, due to its allegedly covering up significant flaws in its military chopper, not to mention the executives who were arrested for allegedly embezzling money.

In fact, Lockheed denied allegations that it had illicitly “received business favors from the Park [South Korean] government,” and similar allegations were leveled against KAI. The Korea Times reported that state prosecutors investigated a program involving Lockheed and KAI’s dealings with the Korean government.

The investigation is ongoing and will continue to be a headache for Lockheed, casting a shadow over their efforts to win the T-X contract.

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