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Ericsson quiet as international group publishes Iraq allegations

ICIJ Ericsson.jpg

Ericsson has not commented so far about last night’s publication of allegations about its activities in Iraq.

The International Commission of Investigative Journalists (ICIJ) posted on its site a number of articles about what it called “years of bribery and fraud” in Iraq.

Ericsson tried to forestall the allegations 12 days ago when it published a statement admitting it broke rules in Iraq for an eight-year period in the last decade.

The Swedish company admitted in a statement that a 2019 internal investigation revealed “unusual expense claims in Iraq, dating back to 2018”.

These covered “the conduct of Ericsson employees, vendors and suppliers in Iraq during the period 2011-2019”, said Ericsson in the statement.

Now the ICIJ has published what was likely the reason for the “detailed media inquiries from Swedish and international news outlets” that led to Ericsson’s 16 February statement.

ICIJ, a US-based non-profit organisation, is a consortium of a large number of international media, including Asahi Shimbun (Japan); the New York Times and the Washington Post of the US; Süddeutsche Zeitung of Germany; Kyiv Post of Ukraine; and the Guardian of the UK.

The organisation released a number of articles last night, as the world’s telecoms industry was gathering in Barcelona for Mobile World Congress, that alleged misconduct by Ericsson. The company alluded to these in its 16 February statement.

In summary, says ICIJ, “Ericsson sought permission from the terrorist group known as the Islamic State to work in an ISIS-controlled city [in Iraq] and paid to smuggle equipment into ISIS areas”. (Image: Rocco Fazzari/ICIJ.)

ICIJ says Ericsson “made tens of millions of dollars in suspicious payments over nearly a decade to sustain its business in Iraq, financing slush funds, trips abroad for defence officials and payoffs through middlemen to corporate executives and possibly terrorists”.

It says “millions of dollars in payments couldn’t be accounted for – all while Ericsson worked to maintain and expand vital cellular networks in one of the most corrupt countries in the world”.

ICIJ says “Ericsson’s business in Iraq relied on politically connected fixers and unvetted subcontractors. It was marked by sham contracts, inflated invoices, falsified financial statements and payments to ‘consultants’ with nebulous job descriptions.”

Ericsson CEO Börje Ekholm told Sweden’s business newspaper Dagens Industri about the company’s own internal enquiry: “What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organisations, including ISIS.”

Ericsson said in its 16 February statement that the investigation “found serious breaches of compliance rules and the code of business ethics. It identified evidence of corruption-related misconduct.”

 

 

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