Lawmaker Kwon Hyang-yeop criticizes 'brazen' 3% kickback culture at construction sites
An official at the Korea Industrial Complex Corp. has been dismissed after it emerged he demanded 500 million won ($361,000) in bribes from construction contractors and received entertainment at upscale hostess bars on multiple occasions.
During the misconduct investigation, remarks suggesting that kickbacks of "typically 3 percent of the contract value" were an industry norm were documented, along with evidence that the official had pressured subcontractors — details included in the corporation's disciplinary records.
According to national audit materials submitted to lawmaker Kwon Hyang-yeop of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee, the official, identified only as A, served as a construction supervisor at the South Jeolla Province regional headquarters. In April 2024, he asked an acquaintance acting as an intermediary to contact a pipe rack construction company on his behalf and demand 500 million won in kickbacks.
A held a supervisory position overseeing construction management and inspection for a shared pipe rack project and exploited that role to solicit the bribes. His acquaintance, identified as B, then visited the construction firm and pressured its representatives to hand over the full 500 million won, invoking his personal ties to A.
Separately from the bribe demand, A used his supervisory authority to pressure contractors, telling them they needed to follow his instructions to avoid penalties for construction delays and warning that the pipe rack project would not proceed smoothly without him.
He was also found to have exploited his position to receive entertainment — including payments for female hostesses — at a bar and other venues on nine separate occasions between August 2023 and April 2024, totaling 6.02 million won in hospitality.
After the misconduct came to light, the corporation conducted an internal audit and confirmed on Dec. 3 last year the 6.02 million won in entertainment expenses that A had acknowledged receiving. It imposed the harshest available disciplinary measure — removal from office — along with a surcharge of 6.02 million won, and pledged to prevent a recurrence.
"In the course of investigating the bribery case involving a Korea Industrial Complex Corp. employee, the raw reality of the supervisory environment was laid bare — with 3 percent of the contract value cited as the going rate for kickbacks," Kwon said. "The corporation must conduct a comprehensive investigation of all construction and inspection work it oversees, and stake its institutional reputation on determining whether this kickback culture truly exists."
parkds@heraldcorp.com
