Hard on the heels of recent news that there may have been serious compliance breaches by its contractors in Iraq, Ericsson’s internal investigations, leaked to a number of press sources, have revealed more damaging details – including allegations that the telecoms giant may have been involved in corruption in a number of other countries.
Leaked documents seen by the International Consortium of Investigative Journalists (ICIJ) and sent to a number of media outlets apparently allege not only the payment of bribes to the Islamic State (IS) terrorist group but that the company had put its contractors at risk in the drive to keep doing business in militant-controlled Iraq.
A public statement from Ericsson reported recently on this site admitted to “serious breaches of compliance rules” in Iraq between 2011 and 2019. However, the more detailed internal investigation mentions bribes to IS and a slush fund run by contractors working for Ericsson, among other things.
The UK’s Guardian newspaper reports that many of the allegations in Iraq relate to contractors working for Ericsson guaranteeing effective transporting of the company’s infrastructure through Iraq. This, according to the investigators, may have involved bribes to militants and improper payments to customs officials to avoid border taxes.
The investigators have, however, said there is no evidence that Ericsson employees were directly involved in any payments to IS. In addition the report points out that there has been no firm interview confirmation of any allegations. However, email evidence does apparently support some of the allegations.
More serious, perhaps, are reports that the drive to continue the firm’s commercial operations even after IS took control of Mosul may have resulted in the kidnapping of contractors.
This is not just about Iraq. The Guardian notes that a US$1billion settlement with the US Department of Justice involving corrupt payments through slush funds between 2000 and 2016 mentions only five countries– Djibouti, China, Vietnam, Indonesia and Kuwait.
However, the records reported by ICIJ show that besides Iraq, the company has examined alleged misconduct in Lebanon, Spain, Portugal and Egypt. In addition, a spreadsheet lists company probes into possible bribery, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, the United States and South Africa. These probes have not been previously disclosed.
At the very least these leaks ask serious questions about company oversight. However, a detailed Ericsson response to these latest allegations has not yet been made available.