A special counsel team led by Lee Tae-han, which is investigating alleged bid-rigging in election supply contracts, has found signs of tax evasion at companies tied to the case and asked the National Tax Service to open tax probes. More than five firms are included, among them a ballot box manufacturer run by a former National Election Commission official.
According to the special counsel team on the 18th, the companies are suspected of exchanging fake tax invoices with firms that took part in the bidding as sham competitors, without any actual transactions. The team believes they sought to evade taxes while splitting the proceeds, and on the 16th of this month requested a swift investigation by the tax agency. It set Dec. 15 as the deadline for the findings and related documents to be returned.
Among the suspected tax evaders is a company run by a person identified as A, a former head of the political parties division at the National Election Commission. A is suspected of winning a bid to supply early voting ballot boxes for the June 3 local elections by putting up another firm as a sham bidder. The commission signed a total of 103 contracts worth 17.5 billion won ($12.6 million) with three companies linked to A, A's spouse and A's son, and 90 of those were awarded without competitive bidding.
Signs of suspected tax evasion were also found at Company B, a maker of polling station supplies that was searched on the 14th of this month, according to sources. Company B signed contracts worth about 5 billion won ($3.6 million) for items such as notices, vests and stickers for last year's 21st presidential election and this year's local elections. It won the contracts even though it offered a higher price than two rival firms, sources said.
The special counsel team believes election commission staff improperly intervened in the bidding process, including by adding evaluation committee members and manipulating the way scores were calculated.