Telecoms giant Ericsson may have paid ISIS for access to Iraq

The company admits finding purchases for transport routes in Iraq controlled by the terrorist group.

Roland Magnusson via Getty Images

Ericsson's chief executive officer Borje Ekholm has told Swedish newspaper Dagens Industri that the company may have made payments to the Islamic State (ISIL/ISIS) terrorist organization for its operations in Iraq. According to Bloomberg, the CEO said the telecoms giant has identified "unusual expenses dating back to 2018." While the final recipient of those payments has yet to be identified, Ekholm has admitted that they're seeing records of purchased transport routes "through areas that have been controlled by terrorist organizations, including ISIS."

Ekholm's admission comes after Ericsson issued a statement in which it said it continues to "invest significantly" into an investigation regarding compliance concerns surrounding its Iraq-based business. In that statement, Ericsson said that unusual expense claims triggered an internal investigation in 2019, which led to the discovery of "serious breaches of compliance rules" in the conduct of its employees, vendors and suppliers in Iraq. Regarding those purchased transport routes in particular, Ericsson said they were used in "connection with circumventing Iraqi Customs." The company wrote:

"Ericsson invested significant time and resources to understand these matters. The investigation could not identify that any Ericsson employee was directly involved in financing terrorist organizations."

After Ericsson released its statement, the International Consortium of Investigative Journalists (ICIJ) revealed that the company spoke to address the wrongdoing the consortium uncovered as part of a global investigation. The ICIJ also said that it will publish its own findings "soon."

Ericsson has been landing massive 5G contracts around the world in the past couple of years, in part because some countries need to replace banned Huawei equipment used in their networks. This isn't the first time the telecoms giant has been caught in a corruption scandal, however. It was previously charged with violating the Foreign Corrupt Practices Act between 2000 and 2016 for bribing officials and falsifying records. In 2019, Ericsson settled with the US Justice Department and the SEC for $1.1 billion to leave it mostly free of criminal convictions, sanctions and penalties. But US prosecutors determined last year that it violated the terms of the settlement by failing to provide certain documents and information related to it.

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