Ericsson risked workers lives by Islamic State

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. This resulted in them being kidnapped by IS militants.

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.

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. They felt such an action was “premature”, and would “destroy” Ericsson’s business in the country.

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.

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. Then an IS fighter used his phone to call Ericsson managers and demanded the company pay $2.4m to work in the area.

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 Ericsson managers – one of whom still works with the company – who received the call from IS, but they refused to comment.

Affan 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. 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 said: “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 totaling millions of dollars in 10 separate countries. The corruption extended to a slush fund for Lebanese officials over a number of years totaling nearly $1m alongside gifts such as a $50,000 luxury trip to Stockholm for the former Lebanese Minister of Telecoms, Boutros Harb.

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.

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.

Reported by the BBC.