Ex-AAFES official allegedly coached SSRT on contracts
SUWON, South Korea — Former AAFES official Clifton W. Choy allegedly coached a South Korean company on how to file misleading paperwork to help it compete for a lucrative Internet service contract with the U.S. military in South Korea, according to testimony Wednesday in Suwon District Court.
Choy also phoned executives of the company SSRT, also known as Samsung Rental Corp. Ltd., with inside progress reports that the bidding was going in their favor, according to Bok Jin-soo, a former SSRT executive.
Bok was one of two witnesses who testified Wednesday that SSRT paid cash bribes to Choy and another former Army and Air Force Exchange System official, H. Lee Holloway.
The testimony came during the trial of SSRT chief executive Jeong Gi-hwan, whom prosecutors accuse of bribing Choy and Holloway in connection with the Internet and phone service contract for U.S. military installations in South Korea.
South Korean authorities arrested Jeong in September 2006.
He is accused of paying Choy $100,000 to help win the contract, and later with paying Holloway $68,000 to help keep the firm out of trouble with AAFES over growing customer complaints of price gouging and poor service.
AAFES initially awarded SSRT the $206 million, 10-year contract in 2001.
By May 2003, SSRT had drawn repeated customer criticism, but AAFES awarded the firm a contact extension through 2019.
That extension was allegedly preceded by Jeong’s systematic and lavish bribery effort, according to Nov. 21 testimony from another former SSRT executive, Kim Hyun-chul, also known as Harry Kim.
According to Bok’s testimony Wednesday, Choy gave SSRT favored treatment in the bidding competition for the contract, including coming to the SSRT offices and coaching executives on how to fill out the AAFES application required of prospective bidders.
At the time, Bok said, SSRT fell well short of the requirements AAFES uses in gauging whether a firm has the know-how, finances and other qualifications to deliver a contracted service.
SSRT didn’t have the required experience or capital resources, according to Bok.
Later, when AAFES officials were reviewing the bids SSRT and other firms had submitted, Choy phoned SSRT from the United States, Bok testified.
Bok told of two such calls in which Choy allegedly told SSRT executives that the process was proceeding and in their company’s favor.
After SSRT won the contract, Jeong gave $20,000 to Choy in return for his help, Bok testified.
In addition, Bok testified, Jeong paid for liaisons between Choy and various women employed at so-called “room salons” in Seoul and elsewhere in South Korea, Bok testified.
Bok testified Choy was especially taken with one woman and maintained a relationship with her that spanned five or more months.
Bok described at least one occasion on which he, Jeong and Choy visited a room-salons establishment, where the women formed a line from which Choy chose a partner.
In all, SSRT spent about 300 million won (more than $333,000) on drinks and entertainment that included liaisons with other women, Bok testified.
On one occasion, Bok testified, Jeong said that because SSRT was reaping big profits from its AAFES contract, he ought to share some of that with Choy.
Also Wednesday, former SSRT executive Kim Ki-soo testified that Harry Kim told fellow executives that Holloway expressed a desire to own a $65,000 BMW luxury car.
Kim said that SSRT executives discussed the matter at a meeting and decided to pay the money to Holloway in installments.
Kim said it was his responsibility to provide Jeong the cash on request.
The first installment was paid to Holloway in October 2004, Kim testified, with payments continuing into 2005.
Kim said he did not witness any payments being made, but he gave Jeong the required envelopes of cash when instructed.
Jeong told Kim that if he were ever asked what the money was used for he should say he did not know, Kim testified.
Kim said SSRT executives felt compelled to go along with Holloway’s alleged “requests” for fear of alienating him.
Holloway, Kim testified, reminded SSRT that there were other telecommunications firms eager to have the profitable contract, and company executives took it to be a veiled warning that they could jeopardize their contract if they didn’t cooperate with Holloway.
Kim also said Jeong gave Choy $10,000 bribes each time the AAFES official made one of his periodic trips to South Korea.
U.S. Air Force investigators have completed probes into the allegations against Holloway and Choy and have forwarded their findings to federal prosecutors who will decide whether further action is warranted.
Holloway most recently was AAFES general manager at Fort Benning, Ga. His AAFES employment ended Jan. 11 after nearly 17 years.
Choy was services program manager at the AAFES Pacific headquarters on Camp Foster, Okinawa, from February 2005 until his employment ended Feb. 17 after 36 years.
Holloway and Choy have declined to be interviewed by Stars and Stripes.
Judge Kim Mi-ri set the next trial proceedings for Jan. 11.
Hwang Hae-rym contributed to this report.