Ericsson allegedly paid bribes to IS group in Iraq, leaks show

Leaked documents have showed that telecom giant Ericsson allegedly paid bribes to the Islamic State group militants in order to sell its services in parts of Iraq. 

An internal investigation by the Swedish-based firm, which was later obtained by the International Consortium of Investigative Journalists (ICIJ), found that tens of millions of dollars were spent in suspicious payments to sustain Ericsson’s activities in Iraq between 2011 to 2019. 

Company investigators said they could not rule out the possibility that Ericsson financed terrorism through subcontractors at a time when IS-held large parts of Iraq, although they could not identify any employees "directly involved". 

The internal report found "evidence of emails indicating illegal bypassing of customs and passing through IS-controlled areas in connection to transportation in Iraq".

"There were numerous interviews stating it was more important to do business and deliver to customers, than ensuring the transportations were conducted according to laws and regulations," the investigators said after questioning a number of Ericsson employees and associations. 

Records showed that the company's persistence to work in IS-controlled areas led to militants kidnapping the crew chief of their subcontractors. 

They also documented allegations of misconduct in at least ten countries across four continents, including Lebanon, Spain, Portugal and Egypt. 

Around two weeks ago, Ericsson released a statement admitting "it found serious breaches of compliance rules and the Code of Business Ethics" in relation to its Iraqi business activities.   

The statement acknowledged payments to "intermediaries" and "the use of alternative transport routes in connection with circumventing Iraq Customs". But, it said the "ultimate recipient of these payments" could not be identified. 

In 2019, the Swedish-based firm reached a $1 billion settlement with the US Department of Justice following allegations of bribery and corrupt business practices in five countries over a 17 year period.  They avoided a criminal trial as part of the agreement. 

The ICIJ, who obtained the 73 pages of leaked documents, has criticised Ericsson's internal probe for failing to reach specific conclusions and for insufficiently investigating the most explosive allegations, including payments to terrorist organisations.

"Investigators didn't interview officials of either the main transport firm moving Ericsson equipment through IS territory or the subcontractors the company relied on to work in IS-held Mosul," they said. 

Ericsson, which is headquartered in Stockholm, has customers in more than 180 countries around the world. They say the firm is "committed to conducting business in a responsible manner". 

At its height in 2014, IS controlled around 40 percent of Iraq.