Telecoms company Ericsson gave millions to ISIS in Iraq, report says

A leaked internal report by the Swedish business shows corruption and terrorist-linked transactions between 2011 and 2019

Ericsson headquarters in Stockholm, Sweden. Its CEO, Borje Ekholm, said it had identified 'unusual expenses dating back to 2018'. Photo: EPA

Swedish telecoms company Ericsson has been accused of spending “millions of dollars” to smuggle equipment into ISIS-controlled territory in Iraq.

The claim is contained in a leaked internal report by the company obtained by the International Consortium of Investigative Journalists.

Speaking to local media on February 16, Ericsson’s chief executive Borje Ekholm said it had identified “unusual expenses dating back to 2018”.

“What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organisations, including ISIS,” Mr Ekholm told Swedish paper Dagens industri.

The ICIJ said that between 2011 and 2019, Ericsson made payments “to sustain its business in Iraq, financing slush funds, trips abroad for defence officials and payoffs through middlemen to corporate executives and possibly terrorists”.

“The internal investigation describes a pattern of bribery and corruption so widespread, and company oversight so weak, that 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.”

The ICIJ also said the leaked Ericsson report showed the company had relied on fixers and unvetted subcontractors to run its business with the involvement of fake contracts, invoices with inflated amounts, doctored financial statements and other payments made to “contractors” with vague job descriptions.

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“In one instance, a member of a powerful Kurdish family, the Barzanis, collected $1.2 million for ‘facilitation to the chairman’ of a mobile phone operator — also a Barzani,” the ICIJ said, citing the internal Ericsson report.

The leaked documents include 73 of the report's 79 pages with summaries of 28 witness interviews and 22.5 million emails, which the ICIJ distributed to 28 media outlets to help verify the information.

In 2019, Ericsson paid more than $1 billion in settlements to the US government over a “scheme to make and improperly record tens of millions of dollars in improper payments around the world”, the US Department of Justice said, after a subsidiary of the company pleaded guilty to its role.

The ICIJ called it “one of the largest foreign corruption settlements in history”.

Updated: February 28, 2022, 7:44 AM
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