The alleged involvement of the South Korean spy agency in a fumbled industrial espionage job is the dominating debate in the diplomatic community here.

At the center of the controversy is the bidding for a contract to supply trainer jets, tanks and missiles to Indonesia. South Korea’s T-50 supersonic planes are competing with Russia’s Y-130 trainer jets for the deal.

Some high-ranking diplomats expressed concerns for future dealings with South Korea, hinting that the trust essential for sensitive negotiations could be jeopardized.

“What’s dangerous and embarrassing over this matter is that this was a visiting presidential delegation,” said an African envoy. “This means they were representing their country’s president over the deal.”
 
Another envoy said he was not surprised, because military and industrial espionage happens all over the world; the exception is that agents are not usually apprehended in the middle of a robbery.

Last Wednesday three people allegedly from the NIS broke into a room in the Lotte Hotel used by an aide to the leader of a visiting Indonesian delegation.

Reports from police and local media say that two men and one woman used a USB flash drive to copy files from one of two laptop computers in the room while the delegation met President Lee Myung-bak to discuss defense contracts.

The aide returned while the intruders were still there. Surprised, they fled with one laptop only to return the stolen property a few minutes later.

“We are going to have to reexamine our entire security detail for future visits by even our smallest of delegations,” said one Asian envoy. “It’s a cost that was not foreseen until now.”

Because of sensitive matters surrounding the incident, diplomats wished to comment on this story anonymously.

Another diplomat pointed to the lack of security at the hotel. A group of NIS officials confiscated footage from the hotel’s security cameras last Thursday.

“No military data was stolen in Seoul,” Indonesian Defense Minister Purnomo Yusgiantoro, who was part of the trip, said after returning home.

Officials on both sides are attempting to defuse the story. The Indonesian minister who led the delegation, Hatta Rajasa, said that it was the case of someone trying to enter the wrong room.

“It’s normal that both sides would try to defuse the situation, it shows that both sides are still interested in the deal and are both trying to help each other avoid embarrassment,” said another Asian diplomat. Besides the sale of the training jets there are other bilateral pacts at stake.

Military insiders believe that the deal would have been signed if it were not for the botched attempt.

The NIS director has come under pressure to step down following the reports.

No comment has come from the Indonesia Embassy here except to say that they asked the Korean side to look into the case.

Korean officials plan to inform Indonesia of the findings of their investigation.

NIS officials are working through various channels to resolve the matter suggesting that they may have lobbied Indonesia to hush-up the break-in.

Lee has been pushing the sale of T-50 jets to several nations unsuccessfully since taking office ― namely the United Arab Emeritus, Poland and Singapore before setting his sight on Indonesia.

In December, Lee and Indonesian President Susilo Bambang Yudhoyono laid the foundation for a military industry cooperation which led to last week’s visit by high-ranking Indonesian officials.

While commenting about the level of agents working for the NIS, one Western diplomat pointed out that it is not the first time a Korean agent was caught with his hands in the cookie jar, referring to last year’s incident in Libya, in which an NIS agent was caught by Libyan authorities while gathering intelligence.

By Yoav Cerralbo (yoav@heraldcorp.com)