In December 2019, Ericsson was ordered to pay more than $1 billion in criminal and civil penalties—a $520 million criminal penalty and approximately $540 million to the SEC—for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a widespread scheme to make and improperly record tens of millions of dollars in improper payments around the world. Ericsson further entered a deferred prosecution agreement with the DoJ, in which it agreed to the imposition of an independent compliance monitor for a three-year term.
The newly agreed upon term of the compliance monitorship will run through June 2024. “This extension is consistent with our commitment to continuous improvement of Ericsson’s ethics and compliance program,” said Ericsson President and CEO Börje Ekholm. “We have made significant progress in changing our culture and implementing an enhanced compliance framework and system of internal controls, and we will use this additional time to ensure these improvements are ingrained in our organization, our daily interactions and the way we do business.”
Board Chairman Ronnie Leten commented, “We are dedicated to acting with integrity in everything we do and continuing to align business operations with strengthened internal controls, governance and risk management processes. Our work with the monitor has meaningfully advanced our ethics and compliance program, and we welcome this extension of our engagement with the monitor.”
Iraq affairs
The public statements made by Ekholm and Leten do not align with the additional corruption allegations the company is now facing. The company’s $1 billion settlement with the DoJ and SEC in 2019 did not mention anything about corrupt dealings in Iraq or alleged payments made to terrorist group ISIS.
On Feb. 27, 2022, a leaked internal investigation report obtained by the International Consortium of Investigative Journalists (ICIJ) revealed that Ericsson “made tens of millions of dollars in suspicious payments over nearly a decade to sustain its business in Iraq, financing slush funds, trips abroad for defense 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 report revealed. “The review, which has not been made public, covers the years 2011 to 2019.”
According to the ICIJ, the company internally investigated alleged corrupt practices in 15 countries in 2011. “The records show that besides Iraq, the company examined alleged misconduct in Lebanon, Spain, Portugal and Egypt. In addition, a spreadsheet lists company probes into possible bribery, money laundering and embezzlement by employees in Angola, Azerbaijan, Bahrain, Brazil, China, Croatia, Libya, Morocco, the United States and South Africa. These probes have not been previously disclosed.”
To date, many questions remain unanswered. On Dec. 14, 2022, the ICIJ reported that the SEC is still investigating the matter, and that the DoJ is preparing to bring additional penalties against Ericsson. Lawsuits alleging the company withheld material information about its operations in Iraq have also been filed. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.