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Dassault Aviation and Boeing in Bribe Allegations in Seoul : Corruption Case

In March 2002, Dassault Aviation said it was the victim of a smear campaign after the French aircraft manufacturer was accused in a corruption scandal embroiling the race for a South Korean fighter jet contract.

The company denied bribing a South Korean air force colonel to improve its chances of winning the deal to build 40 aircraft.

Newspapers in Seoul linked Dassault to a Won11m ($8,300, ?5,900) sweetener allegedly paid to the colonel in return for advice about the bidding process.

Dassault said it was being smeared by people that did not want its Rafale jet to beat Boeing's F-15 to the estimated $3.2bn contract. "There's nothing between Dassault and the colonel," a Dassault spokesperson told the FT. "Everybody knows the evaluation process has put the Rafale at the top. We fear that there is manipulation by people who are annoyed to see the Rafale at the top."

Any bidder proved to have paid bribes could be barred from the so-called FX contract, which is among the biggest defence deals currently being contested.

The corruption scandal emerged when a colonel, identified by his surname, Cho, was arrested on bribery charges. He is believed to be the same man that appeared on South Korean television with his identity concealed, to allege that the selection process was rigged in favour of Boeing.

Mr Cho was part of the air force's evaluation team that assessed the four bids - Eurofighter's Typhoon and Russia's Sukhoi, the other two candidates, are considered outsiders.

Dassault's more modern Rafale outstripped Boeing's ageing F-15 in flight tests, according to information leaked to the South Korean press. However, defence chiefs were reported to favour the US product because of Seoul's close military alliance with Washington. Last week, opposition lawmakers accused the government of succumbing to political pressure from Washington to select the F-15.

Dassault said it was "totally confident in the transparency of the process". Boeing denied involvement in the alleged bribery.

The following lists all references contained in our database that are relevant to this briefing
Financial Times [3/11/2002] 'Dassault denies graft claims in Seoul' by Andrew Ward in Seoul and Victor Mallet in Paris: [Source ID = 6528]


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