‘Doubts still remain’ in suspected bribery case of Korea’s KNOC and Kurdistan oil minister

23 March 2015 – KOREA TIMES / MESOP – SEOUL – Doubts still remain over a suspected bribery case involving the Korea National Oil Corp. (KNOC) and a Kurdistan oil minister, even after the Kurdistan Regional Government (KRG) released information about related transactions.

“There are a number of doubtful points involving the KNOC’s oil exploration projects conducted in Kurdistan,” an accountant familiar with “energy diplomacy” told The Korea Times on condition of anonymity. “The KRG cannot be free from such doubts, although it released information about how much it received from the KNOC, and claimed the account in HSBC in London belonged to its government,” the accountant said. He has been consulting about the ongoing parliamentary investigation to uncover the outflow of national wealth during the failed energy diplomacy under the previous Lee Myung-bak government. He was among those who accompanied a bipartisan delegation of lawmakers for the inspection of the KNOC and other concerning bodies, such as Korea Gas Corp. “Information released from the KRG was not meaningful at all. It was nothing,” he said.

His remarks referred to the KRG’s statement that refuted articles published by The Korea Times in collaboration with Rep. Chun Soon-ok. Chun assumed that a $31.4 million signature bonus paid in 2008 as part of the oil deal could have been a bribe given to Ashti Hawrami, the Kurdish natural resources minister, and the money could have been shared by former aides of President Lee, Kurdistan officials and Choi Kyu-sun, a middleman.

In its statement, the KRG presented a table showing the dates and amount of the transactions, noting that the money was spent in “the normal course of government business,” including building a children’s hospital.The accountant said, however, that such data was not an official receipt issued by the bank, thus failed to settle doubts.“Even if the bank account belonged to the regional government as claimed by the KRG, the suspicion of bribery still remains too when thinking about previous examples that noncommercial organizations such as religious groups created a secret fund in a bank account belonging to the organizations,” he said.

The accountant noted that the allegation raised by Chun as a lawmaker was a reasonable doubt, and it is the opposite party that is responsible for answering such questions. In that sense, he argued, the explanation from the KNOC was not sufficient either. The state-run oil company has maintained that it paid all the money involving the oil exploration project into bank accounts as instructed by the KRG, claiming that its obligation regarding the transaction was over then. The accountant said, however, that the explanation was just poor and proved that the oil firm did not fulfill its duty when spending enormous amounts of taxpayers’ money. “The KNOC shouldn’t say that it fulfilled its duty simply because it sent money to the bank account as instructed by the KRG. It should have checked whether the HSBC account was genuine before the transactions,” he said. “Such principle also applies in deals by ordinary people. I will give you an example. I sold a thing to you and asked you to send money to my wife’s account, and you did it. In this case, the law doesn’t absolve you of obligation if the account was not genuine.”