Ericsson has almost everything going for it, if only it could get out its own way and shake its corrupt heritage.

The Swedish company, which ranks as the No. 1 or No. 2 radio access network (RAN) vendor globally, depending on who’s doing the counting, admits it found evidence of “corruption-related misconduct” dating back to 2011 and as recently as 2018 in Iraq.

Ericsson reports multiple employees violated multiple business ethics, financial regulations, and compliance rules it implemented as part of a $1.06 billion settlement with the U.S. Department of Justice (DoJ). 

This latest admission of criminal activity also likely puts Ericsson out of compliance with the agreement it made with the DoJ that formally placed it under a three-year period of formal monitoring with an independent compliance monitor.

Ericsson admits employees made monetary donations without a clear beneficiary, paid a supplier for work without a defined scope or documentation, used suppliers to make cash payments, funded inappropriate travel and expenses, and improperly used sales agents and consultants. Violations span Ericsson’s internal financial controls, conflicts of interest, non-compliance with tax laws, and obstruction of the investigation, the company added. 

Investigators also “identified payments to intermediaries and the use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organizations, including ISIS, controlled some transport routes,” Ericsson said in a statement.

More alarming admissions followed. “Investigators could not determine the ultimate recipients of these payments. Payment schemes and cash transactions that potentially created the risk of money laundering were also identified,” the company said.

“The investigation could not identify that any Ericsson employee was directly involved in financing terrorist organizations,” Ericsson added. 

While the company claims it “invested significant time and resources to understand these matters,” the inconclusive results leave open the possibility that far greater malfeasance occurred.

Ericsson adds “several employees” and third-party relationships were terminated as a result of its investigation into unethical and illegal business practices in Iraq.

This latest admission extends a decades-long problem for the company and puts its corrupt behavior on the record in more countries.

These criminal activities are systemic despite Ericsson’s claims to the contrary.

The company in late 2019 admitted to a 17-year long bribery scandal involving high-ranking government officials and the falsification of financial documents in China, Djibouti, Indonesia, Kuwait, Saudi Arabia, and Vietnam. Ericsson also, at the time, claimed the criminal activity, including multiple breaches of the U.S. Foreign Corrupt Practices Act, ended in the first quarter of 2017. It fired 50 people in 2018 following an internal investigation.

Ericsson CEO Börje Ekholm called the actions “completely unacceptable and a hugely upsetting chapter in our history,” when the settlement was reached in December 2019 after a six-year investigation by the Securities and Exchange Commission and the DoJ.

The terms of that settlement are now very likely under review, as Ericsson has fallen out of compliance and possibly exposed itself to additional penalties.

Current Verizon CEO Hans Vestberg led Ericsson between 2010 and mid-2016 — or six months prior to when these activities were alleged to have stopped — when he abruptly resigned following several underperforming quarters. Vestberg was at Ericsson for 19 years, and replaced Carl-Henric Svanberg, who left Ericsson to become chairman at BP.