Ericsson List: How a telecom company may have funded the Islamic State
The International Consortium of Investigative Journalists got hold of some of the Swedish company's internal review documents. In addition to blatant cases of corruption and money laundering in several countries, findings show that after 2014 the company may have paid terrorists to do business.
Baghdad (AsiaNews/Agencies) – In 2014, Ericsson, the Swedish-based telecommunications giant, asked the Islamic State (IS) to be allowed to continue operating in Mosul and smuggled equipment into IS-controlled areas, this according to the Ericsson List, a project by the International Consortium of Investigative Journalism (ICIJ), which obtained documents from an internal company review.
The ICIJ report, which was shared with a number of international newspapers, found Ericsson’s business practices included sham contracts, inflated invoices, falsified financial statements and payments to “consultants” with shady job descriptions.
After the findings were published, Ericsson released a public statement on 15 February in which it acknowledged “corruption-related misconduct” in Iraq and possible payments to the Islamic State.
The company, officially known as Telefonaktiebolaget LM Ericsson, generated US$ 25 billion last year and employs approximately 100,000 people in more than 140 countries.
It is a leading supplier of towers, radio base stations and mobile switching centres, essential for modern communications. From 2011 to 2018, its sales in Iraq totalled about .9 billion.
In 2019, the Swedish giant admitted that it had engaged in illegal business practices in five countries (China, Vietnam, Indonesia, Kuwait and Djibouti) and reached a billion-dollar settlement with US authorities to avoid a criminal trial.
Internal documents indicate that the company examined corruption allegations concerning certain employees in 15 other countries, including Iraq.
According to leaked documents, in 2014, when the Islamic State was at its peak following conquests in Syria and Iraq, two employees proposed halting operations in Iraq. Senior executives rejected the recommendation, claiming that leaving would “destroy our business”.
Shortly thereafter, Ericsson asked a local partner, Asiacell Communications, to seek “permission from ‘local authority ISIS’” to continue work in Mosul.
The internal review concluded that they could not rule out the possibility that the company financed terrorism through its subcontractors, although they were unable to identify any employees “directly involved”.
The internal investigation is incomplete, the ICJI noted, because it does not include interviews with the people directly involved.
Still the company’s investigators found that Elie Moubarak, Ericsson’s account manager for Korek Telecom, a mobile phone carrier and the company’s largest customer in Iraq, engaged in “corruption and financial irregularities.”
In one instance, Moubarak asked for a US$ 50,000 “donation” to Kurdistan’s Peshmerga forces “for fighting ISIS,” the report reads.
The militia was led by Sirwan Barzani, one of the main shareholders of Korek, a member of one of the main Kurdish family oligarchies with whom Ericsson had close ties.
Ericsson’s internal report shows that Korek evaded taxes and fees amounting to US$ 375 million and threatened to “demolish rival company towers in Kurdish territory.”
However, the biggest problems came with the rise of the Islamic State. Ericsson and its partner Asiacell needed to move cell towers and equipment from Erbil, in northern Iraq, to Ramadi, in the middle of the country.
A transportation contractor, Cargo Iraq, offered two options, according to the report: the “legal way” and the “Speedway”. The latter passed through ISIS territories and avoided Iraqi customs controls, which risked blocking goods for weeks.
At least 30 lorries each paid US$ 3,000 to US$ 4,000 to haul various equipment across IS-controlled territory. In March 2017, the company paid US$ 22,000 per lorry for three loads in one day.
The investigations into the matter have not yet been completed, and the ICIJ cannot exclude Ericsson’s money funded terrorism.
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24/02/2016 13:02
