The revelation came three days after The Washington Post and other news outlets published details of Ericsson’s internal investigation, which revealed evidence of widespread fraud by company employees, decisions to send workers to terrorist-controlled territory, and the use of contractors who may have been paid by Islamic State fighters.
A report on the findings of an internal audit was received from the International Consortium of Investigative Journalists and shared with The Post as part of an international reporting project.
In a statement posted on its website, Ericsson said it had been informed by the Justice Department on Tuesday that its revelations to US investigators on Iraq were “insufficient” and that the company had “violated” the terms of its 2019 agreement. the US government.
The consequences are related to the conclusions of an internal investigation that Ericsson completed in 2019, which found that the company was involved in “bribes and concessions” and other fraud for almost a decade while pursuing contracts in Iraq that generated revenue of nearly $ 2 billion.
The internal report, based on interviews with employees and a review of millions of emails and other documents, also revealed worrying details about Ericsson’s decision to send workers to areas occupied by Islamic State militants.
The company continued to do so even after an engineer was abducted in 2014, making excessive cash payments to a cargo company that bypassed customs officials by “passing through ISIS-controlled areas,” according to company investigators.
In the end, investigators said it “cannot be ruled out” that Ericsson had contributed to the “illegal financing of terrorism”.
In a conference call with reporters and market analysts on Wednesday, Ericsson President and CEO Björre Ekholm reiterated the company’s claim that it had found no evidence of direct involvement of Ericsson employees in any payments to Islamic State.
“The issue of funding armed factions cannot be justified,” Ekholm said.
Ekholm described the findings of the internal investigation as “extremely inconvenient and extremely unsatisfactory”, but did not comment on what the company failed to share with the Ministry of Justice.
Ministry of Justice officials declined to comment.
“We are cooperating fully with the US authorities,” Ekholm said. “Now we have a notification of a violation, so, of course, we need to make improvements and changes.”
He said the company has taken steps to step up enforcement efforts, improve investigative mechanisms and encourage employees to speak out when violations occur. But he declined to answer a question as to why the employees named in the internal report remained in the company or were promoted.
The Justice Department’s announcement marks the second time Ericsson has been found in breach of a deferred prosecution agreement that has recognized widespread fraud in China, Vietnam, Indonesia, Kuwait and Djibouti.
Ericsson is one of the world’s leading manufacturers of sophisticated radios, switches and other equipment used in cellular communication networks. The Swedish company is seen by Western governments as a crucial alternative to Huawei, a Chinese company whose devices have been banned by the United States and other countries on suspicion of being set up to allow Chinese espionage.