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What is the Ericsson List investigation?
Telecom giant Ericsson made tens of millions of dollars in suspicious payments in Iraq, financing slush funds, trips abroad for defense officials and pay-offs to local corporate executives and for transports through terrorist-held areas, according to an extraordinary internal investigation obtained by the International Consortium of Investigative Journalists and shared with global media partners.
The investigation is based on an internal Ericsson review leaked to ICIJ and shared with a collaboration of more than 110 journalists from 30 partners in 22 countries. It documents a pattern of bribery and corruption so widespread, and company oversight so weak, that millions of dollars in Ericsson payments simply couldn’t be accounted for.
Ignoring warnings from within the company about the growing danger, Ericsson continued to operate in Iraq as politically-connected militants were paid off, millions of dollars went missing and workers were placed in harm’s way. Two executives were quoted as saying that to leave Iraq would be “premature” and would “destroy our business”, a reference to Ericsson’s business in Iraq.
One telecom engineer, Affan, told ICIJ and its partners that he was directed to approach Islamic State militants with a letter asking for permission for Ericsson and its regional partner Asiacell to work in Mosul. Affan, who worked for an Ericsson subcontractor, Orbitel Telecommunication, said that he was kidnapped by ISIS and put on house arrest for a month. He said Ericsson employees abandoned him and would not answer his frantic phone calls during his ordeal. Orbitel declined to comment.
The Ericsson List probe also found that the company engaged in corrupt practices in Iraq even as it was negotiating with U.S. prosecutors to settle charges related to bribery in five other countries.
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The records show that besides Iraq, the company examined alleged misconduct in Lebanon, Spain, Portugal and Egypt. In addition, a spreadsheet lists company probes into possible bribery, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, the United States and South Africa. These probes have not been previously disclosed.
About the Ericsson List investigation
The revelations come amid fierce industry competition, especially with Chinese power player Huawei, for control of telecom networks in the 21st century.
The leaked documents include 73 pages of the explosive 79-page internal report, which presented the findings of a fraud investigation into an Iraqi project called Peroza. The report was prepared with the help of Simpson Thacher & Bartlett LLP, an international law firm based in New York. The report, while damning, often fails to reach specific conclusions, which suggests an incomplete review of some of the most explosive allegations.