Bribery allegations still hang over Internet contract
November 11, 2007
OSAN AIR BASE, South Korea — Although scandal-wracked SSRT is no longer providing home Internet service at U.S. military installations in South Korea, the fallout over bribery allegations against its chief executive is far from over.
But customer discontent has eased from a year ago, now that LG Dacom has taken over SSRT’s contract with the Army and Air Force Exchange Service.
“I’m actually pretty happy with it,” said Air Force Staff Sgt. Timothy Zink, 25, of Arkansas City, Kan. He’s with the 51st Security Forces Squadron.
“I haven’t had any problems at all,” he said of his Internet service. “From the minute I got it it’s run pretty well. I have really fast Internet speeds. Compared to stateside prices, it’s right about average priced,” said Zink, who pays about $40 per month.
Army Pfc. Diego Lopez, 19, of Santa Ana, Calif., also pays about $40 for his Internet package.
“It’s fine but it could be a lot better,” said Lopez, of the 35th Air Defense Artillery Brigade. “Some days it’ll be really slow. Other days it’ll work fine. The equipment's OK. The price is fair.”
Air Force Staff Sgt. Alexander Jensen, 30, of Iron Mountain, Mich., said he’s satisfied with his service but not with the $66 a month he pays for his Internet package.
“In the States, I can get it for $25 a month versus what they’re charging here,” he said.
Yet, he added, “I don’t know what you can get better unless you get better competition … More options is always nice.”
On Jan. 31, SSRT transferred the rights to its contract with AAFES to LG Dacom (whose contract runs through 2019) through a legal process called novation, used when a company can no longer fulfill its contract.
AAFES initially awarded SSRT the $206 million, 10-year contract in 2001, but by May 2003 SSRT became the subject of repeated customer complaints of alleged price gouging and chronically poor service. In 2003, AAFES extended the contract with the company from 2011 to 2019.
In January, SSRT chief executive Jeong Gi-hwan was indicted in South Korean court on charges he bribed two AAFES officials, H. Lee Holloway and Clifton W. Choy, so he could hold the lucrative contract.
Jeong’s lawyers have said he’s innocent. His trial reconvenes Nov. 21 in Suwon District Court.
In light of the scandal SSRT customers interviewed by Stars and Stripes called for stern action by AAFES against any officials who may have been guilty of wrongdoing, and for U.S. prosecution of wrongdoers. Further, they called for AAFES to better police the ethics of its employees, and appealed to AAFES and U.S. military authorities to bring in more than one telecommunications company so they would not have to rely on a single provider.
Holloway and Choy are no longer employed by AAFES. The U.S. Air Force Office of Special Investigations has completed its own investigations into the bribery allegations and has forwarded its findings to federal prosecutors who will decide whether further action is warranted. Holloway and Choy have declined to be interviewed by Stars and Stripes.