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South Korea may probe use of funds for US troops' upkeep

SEOUL — A government audit board may investigate whether South Korean funds for the upkeep of U.S. troops are being used appropriately, according to media reports.

Yonhap News reported this week that the Board of Audit and Inspection is collecting documents from the Ministry of Foreign Affairs, the Ministry of National Defense and the Seoul Regional Tax Office to determine whether to launch a formal investigation.

The review is apparently focusing on whether the U.S. has tried to evade taxes on interest earned on unspent defense contributions from Seoul — an allegation U.S. Forces Korea denies.

According to Yonhap, the BIA review comes at the request of a left-wing civic group, Solidarity for Peace and Reunification of Korea, that says unspecified "data" show the U.S. has left unspent more than 1 trillion won ($944 million) in Korea-provided defense funds. The BAI received similar requests from another civic group in 2007 and 2008 but did not conduct an investigation.

USFK said in an email to Stars and Stripes that it "does not earn any interest on (Special Measures Agreement) funds deposited in the burden-sharing account, nor does USFK make any additional money off the SMA burden-sharing account."

The U.S. and South Korea just agreed on a five-year defense cost-sharing deal, following months of negotiations that centered on how much Seoul should pay and the alleged lack of transparency in the U.S. use of Korean defense funds.

Seoul will increase its contributions 5.8 percent in 2014. In addition to paying 920 billion won — about $866.6 million — South Korea will also make unspecified contributions toward labor, logistics and construction.

The old agreement expired at the end of 2013. The new one includes measures intended to increase transparency. However, the foreign ministry would not comment earlier this week on why Seoul believes its oversight of defense fund spending has been inadequate.

If BIA decides to launch a full investigation, it would be the first time the agency has inspected USFK’s use of money since the two allies signed their first SMA in 1991.

rowland.ashley@stripes.com
Twitter: @Rowland_Stripes

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