The logo of telecommunications equipment maker Ericsson, in Beijing, October 14, 2020. MARK SCHIEFELBEIN/AP
Forced by the American judiciary to acknowledge an international corruption scandal and pay a $1 billion fine in the United States, Ericsson is faced with one of the most serious crises of its time on December 6, 2019. “Furious” at these “past mistakes,” the CEO of Swedish telecoms equipment maker Börje Ekholm then pledged in a press release to change the mentality internally to encourage his employees to “talk” and “face problems.” .
Ericsson employees were rightly alerted to a major “problem” in the days that followed: an internal investigation, which concluded on December 11, 2019, uncovered significant abuses in the group’s Iraqi arm. Corruption, conflicts of interest, questionable transactions and, above all, the urgent suspicion of indirect financing of terrorist groups are mentioned over a period from 2011 to 2019.
Based on the latest documents from the investigation of the American judiciary and elements from the investigation “The Ericsson List” conducted in cooperation with the International Consortium of Investigative Journalists (ICIJ), Le Monde can tell how the company is blocked tried in a spiral of lies to sabotage the work of the judiciary.
First series of scandals
In the 2010s, under the extraterritoriality of US law, the US Department of Justice (DOJ) investigated corruption in which the group was involved in several countries. This principle, on the border between an anti-corruption weapon and an economic lever, can be applied as soon as it is possible to link the company’s activities in the United States in one way or another – which, in the case of Ericsson, is simply established there .
The investigations focus on Ericsson’s actions in five countries: China, Vietnam, Indonesia, Kuwait and Djibouti. The corruption patterns identified consist of bribing executives to obtain public contracts, using slush funds. In China, for example, Ericsson has given out gifts worth tens of millions to win business. In Djibouti, he paid more than $2 million in bribes to local authorities in exchange for a roughly $20 million contract to roll out the 3G cellular network.
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That filing led to the signing of an agreement between the DOJ and Ericsson in December 2019: the company acknowledged the corrupt acts and accepted a $1 billion fine in exchange for freezing the charges. The agreement also provides for transparency obligations: the telecom group must fully cooperate with the American authorities, in particular by sending them “any evidence or allegations, as well as any internal or external investigations of which the company is aware”.
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