Explained | The corruption and misconduct allegations around Ericsson

A leaked 2019 internal report of the Swedish telecoms giant reveals corruption involving possible payments to ISIS while the terror group was controlling nearly 40% of Iraq

The story so far: Swedish telecom company Ericsson announced on March 2 that it broke an agreement with the United States Department of Justice by hiding evidence about alleged corruption in Iraq that the company may have engaged in.

This comes after a leaked internal investigation report of Ericsson from 2019 revealed that it may have channeled money to the Islamic State (IS) terrorist group and made millions in suspicious payments between 2011 and 2019 to be able to function in Iraq. The internal investigation into corruption and misconduct engaged in by the company also revealed questionable activities in 10 other countries.

Also in 2019, the company had paid fines totaling $1 billion to the US Department of Justice under a Deferred Prosecution Agreement (DPA), after pleading guilty to paying millions in bribes between 2000 to 2016 to secure contracts in five countries — China, Djibouti, Vietnam, Kuwait and Indonesia.

This is the second time the DOJ has said that Ericsson breached the 2019 agreement by keeping information from it. In October 2021, the DOJ had said Ericsson breached the DPA by not providing some documents and facts.

Ericsson is a Sweden-based telecom equipment giant with an annual revenue of $25 billion, employing 100,000 people in 140 countries. Besides dealing in network towers, radio base stations and mobile switching centres, it also leads in developing 5G mobile technology in the UK.

The findings of a 2019 internal probe commissioned by Ericsson to a third party investigator to look into corruption within the company,  was leaked to the International Consortium of Investigative Journalists (ICIJ) and 28 other media outlets in 22 countries, who published the findings in February this year. 

The leaked report revealed that the Stockholm-headquartered telecom company may have engaged in bribing IS militants to use transport routes controlled by the terror group to deliver telecom equipment by circumventing Iraqi customs. It revealed that a total of $37 million in suspicious payments have been made by Ericsson, besides other misconducts.