Home LATEST NEWS Ericsson’s dirty business in Iraq during the Daesh era

Ericsson’s dirty business in Iraq during the Daesh era

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The leak contains an Ericsson internal investigation report that cites numerous instances of corruption, bribery, fraud, embezzlement and money laundering by employees of the Swedish multinational and by some of its subcontractors in Iraq between 2011 and 2019.

The 79-page report was written by Ericsson’s compliance department, which is responsible for monitoring the activities of the multinational. It mentions dubious payments of tens of millions of dollars, including free trips for officials of the Iraqi Ministry of Defense.

Profits first

Present in Iraq since the fall of Saddam Hussein’s regime, Ericsson is doing important business there. According to the confidential report, its sales reached $1.9 billion between 2011 and 2018.

Iraq is one of the most corrupt countries in the world and, according to international relations professor Miloud Chennoufi of the Canadian Forces College, the Swedish multinational must have known what it was getting into.

You know very well that you are going to indulge in practices that are on the verge of legality and of course, on the edge of illegality.he said.

Gunmen on a vehicle.

On June 23, 2014, Daesh fighters drove an Iraqi forces vehicle through the streets of Mosul.

Photo: The Canadian Press/AP

But things got tough for Ericsson when the Islamic State armed group captured the city of Mosul in June 2014 and declared a caliphate.

Ericsson was planning to deploy 3G telephony equipment, but its employees deployed in the field were now afraid to go out.

According to the internal report, employees strongly suggested suspending Eriksson’s operations in Iraq citing a case of force majeure. But despite the heightened risks, Ericsson’s management in the Middle East chose to continue operations.

A suspension of work was judged premature and would have ruined their business in Iraq.

Abducted by Daesh

A month later, in July 2014, Ericsson then ordered an employee of one of its contractors to deliver a letter to representatives of the armed group Islamic State, asking them to allow its teams to continue their work.

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But as soon as the letter was delivered, the employee was kidnapped by militants.

The kidnappers demanded that the Swedish multinational pay millions of dollars to be able to continue its activities on their territory.

According to the report, Ericsson managers wanted to reach an agreement with Daesh so that the employee would be released and the company could continue its activities. The employee was released, but the report is silent on the arrangements made with the activists.

A flag on a telecommunications tower.

A flag of the Islamic State armed group flies atop a telecommunications tower in the village of Tel Asquf, near the city of Mosul in Iraq in August 2014.

Photo: AFP / AHMAD AL-RUBAYE

Ericsson should have left Iraq, especially after propaganda videos showing the beheading of hostages appeared on the internet, Professor Chennoufi said.

There, it is really a lack of judgment to pursue the cases in Iraqhe said.

Especially since by continuing his work, Ericsson was setting up a communications infrastructure that could be used by Daesh to disseminate its propaganda.

Bypass customs

Ericsson employed a ploy to prevent its communications towers and equipment from being delivered through major highways where Iraqi customs posts were located.

According to the leak, Ericsson didn’t want to pay the customs duties and made a deal with a shipping company that offered to go through back roads.

However, the bypass was longer and passed through territory controlled by militant groups, including Daesh. These checkpoints were used to threaten and extort money from travellers.

The internal investigation report concludes that it cannot be excluded that the transport company has made passage payments and has committed to the potential illicit financing of terrorism to carry out transport activities for Ericsson.

Professor Chennoufi believes that Ericsson’s legal responsibility and moral responsibility in all these cases there is absolutely no shadow of a doubt.

Ericsson confirms

Ericsson declined to grant an interview to the Consortium of Investigative Journalists.

But in response to our questions, the company issued press releases in which it admitted that there was corruption-related misconduct in Iraq and that funds may have flowed to Daesh.

The company adds that its internal investigation did not identify any Ericsson employees. directly involved in the financing of terrorist organizations.

Ericsson says several employees were fired and disciplinary and corrective action was taken.

However, some of the employees mentioned in the investigation report are still employed by Ericsson. One of them even received a promotion.

In its press releases, Ericsson maintains that it is committed to conducting its business responsibly, applying ethical anti-corruption, humanitarian and human rights standards.

Ericsson CEO Börje Ekholm told Reuters the internal investigation has never been publicly disclosed before because its findings were not considered sufficiently significant to justify their disclosure.

The day after the release of the press release, the value of Ericsson shares fell by more than 10%, or US$4.4 billion.

A corruption tax

Ericsson has already been accused by US authorities of corruption in other countries.

In 2019, the Swedish multinational signed an out-of-court settlement with the United States Department of Justice to avoid facing criminal charges. She had to pay a billion dollar fine.

This is the same kind of agreement that SNC-Lavalin wanted to obtain in Canada and which put the government of Justin Trudeau in hot water.

Some say it’s a corruption taxpoints out Professor Denis Saint-Martin of the University of Montreal.

According to him, studies show that several multinationals that have negotiated such agreements promise to change their practices and then do it again. It does not seem to put the brakes on the practice of bribing public officials abroadhe said.

With the collaboration of Sydney P. Freedberg, Maggie Michael, Amir Musawy and Paul Émile d’Entremont.

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