Telecoms firm Ericsson put contractors’ lives at risk, according to a leaked company report seen by the BBC.
Image source, Reuters
The telecoms company Ericsson put contractors’ lives at risk by insisting they continued working in territory controlled by the Islamic State [IS] group in Iraq, according to a leaked Ericsson report seen by BBC News Arabic. This resulted in them being kidnapped by IS militants, the report finds.
Ericsson is one of the world’s biggest telecoms companies and a key player in the rollout of 5G networks in the UK, having replaced Chinese telecoms firm Huawei after security concerns.
The latest revelations follow last week’s admission by Ercisson Chief executive Borje Ekholm – in response to the leaked document – that money had been paid by the company to access quicker transport routes in Iraq at the time, and that IS may have been the recipients. More than $5bn was wiped from Ericsson’s market value after Mr Ekholm’s comments.
The document, obtained by the International Consortium of International Journalists [ICIJ] and shared with the BBC and 29 other media partners, is from a 2019 internal investigation into corrupt activities and bribery in 10 countries. The most serious findings centred on its operations in Iraq.
When IS seized Iraq’s second-city, Mosul, in June 2014, a senior Ericsson lawyer recommended shutting down the company’s operation in Iraq, but senior managers ignored this, the report found. They felt such an action was “premature”, and would “destroy” Ericsson’s business in the country, the document says.
Its insistence that the company’s contractors continued to work in IS-held territory put lives at risk because the militant group then took a number of contractors hostage, the report found.
Affan was among a group of engineers doing fieldwork for Ericsson at the time IS took over the city. He was sent with a letter on behalf of the company seeking permission from the terror group for them to continue working there.
But as soon as he arrived, they were met by a pick-up truck full of gunmen who seized him, he told German public broadcaster NDR, another of ICIJ’s media partners.
Then an IS fighter used his phone to call Ericsson managers and demanded the company pay $2.4m to work in the area, he says.
“He [the IS member] said that if you [Ericsson] do not pay, this person you sent and everyone else who works for you will be hunted down by us, we will bring them here. One by one”.
Affan was placed under house arrest and says an Ericsson manager then stopped answering his calls. “He abandoned me, he turned off the phone and disappeared.”
The BBC and ICIJ contacted the Ericsson managers – one of whom still works with the company – who received the call from IS, but they refused to comment.
Affan, who is named in the Ericsson report, was released after a month. While Affan maintains he was abandoned by Ericsson, the report says that one of the company’s partners “made arrangements” with IS to secure his release and let the company continue its work in Mosul. The report doesn’t identify what those arrangements were.
This wasn’t Ericsson’s only possible interaction with IS. The company’s transport contractor used a fast route through the country called the “Speedway” which avoided government checkpoints but passed through IS territory, the report found. Ericsson investigators said they found evidence of likely bribe payments to militants along this route.
One senior government telecoms official in Mosul who doesn’t want to be named for fear of losing his job, told another of ICIJ’s media partners: “Ericsson knew well what was going on. There is not a sane person who would deal directly with IS, they all do it through the subcontractors. Militants would take a percentage from every cent paid in Mosul on any project or work. This is how they accumulated millions.”
The internal Ericsson document reveals a widespread culture of corrupt activities and paying bribes totalling millions of dollars in 10 separate countries. The corruption extended to a slush fund for Lebanese officials over a number of years totalling nearly $1m alongside gifts such as a $50,000 luxury trip to Stockholm for the former Lebanese Minister of Telecoms, Boutros Harb.
Mr Harb told the BBC he had gone on a three-day business trip to Sweden paid for by Ericsson. But he hasn’t received any gifts or benefits. He added that he was unaware of any internal investigation by Ericsson.
Investigators also uncovered a $50,000 payment to a charity connected to the billionaire Barzani family, who rule the semi-autonomous region of Iraqi Kurdistan and own the mobile phone network Korek. The report couldn’t establish where the money went. A spokesman for the Sirwan Barzani didnt respond to our specific questions but said “Sirwan Barzani looks forward to the day when Daesh (IS) no longer pose a threat and he and his fellow Peshmerga can spend more time with their families.”
In 2019, Ericsson reached a $1bn settlement with the US authorities following allegations of widespread corruption in five countries. Ericsson has not clarified whether the new revelations were disclosed to the US Department of Justice at the time of the settlement.
The Department of Justice declined to comment on the Ericsson case. Ericsson did not respond to the BBC’s specific questions but said it is continuing to work with external counsel – to review the findings and remediation resulting from the 2019 investigation to identify any additional measures that the company should take.