March 6, 2023: Swedish telecommunications firm Ericsson was agreeing to pay a $206 million penalty and pleaded guilty violates the anti-bribery benefits of the Foreign Corrupt Practices Act, U.S. prosecutors stated on Thursday.
In 2019, Ericsson had already paid a $520.6 million penalty over what New York federal prosecutors stated was a “years long campaign of corruption,” involving the bribery of administration officials and falsifying books and records in Djibouti, China, Indonesia and Kuwait. Hence, the company paid $540 million to the Securities and Exchange Commission.
Ericsson has utilised outside consultants to pay bribes to administration officials and manage off-the-books “slush funds” in all five countries, prosecutors stated, using “sham contracts” and “false invoices” to get the nature of the funds that deferred prosecution agreement stated.
Ericsson employees in China are making “tens of millions of dollars” to be paid out to employees and consultants, “nearly a portion of which was used to provide things of value, which include leisure travel and entertainment, to foreign officials,” which include at a state-owned telecommunications firm, the DOJ said.
In Djibouti, the Justice Department stated an Ericsson employee paid over $2 million in bribes to high-ranking administration officials in the country’s executive branch and Djibouti’s state-owned telecommunications firm.
“When the Department allowed Ericsson to enter into a DPA to resolve an investigation into the FCPA violations, the firm agreed to comply with all provisions of that deal,” Assistant Attorney General Kenneth Polite stated in a press release. “Instead of honouring that commitment, Ericsson failed to cooperate completely and failed to disclose proof and allegations of mistaken in breach of the deal.”
In a press release, Ericsson CEO Börje Ekholm said that with the latest penalty and plea deal, “the matter of the breaches is now resolved.”
“This is permitting us to focus on executing our strategy while driving continued cultural differences across the firm with integrity at the centre of everything we do,” said Ekholm, becoming CEO in 2017. “This resolution is a reminder of the historical misconception that led to the DPA.”