back to article Ericsson throws $1bn at US authorities to make bribery probe go away

Swedish telco slinger Ericsson has paid $1bn to end a double probe into bribery allegations by the US Department of Justice and the Securities and Exchange Commission (SEC). The company was accused of several breaches of the Foreign Corrupt Practices Act (FCPA) spanning multiple years up to the end of Q1 2017. Börje Ekholm, …

  1. DavCrav

    "The Securities and Exchange Commission covered alleged violations of the FCPA in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam and "of the bribery provisions of the FCPA in Djibouti, China and Saudi Arabia"."

    So... nothing involving the US then. I am not exactly a fan of bribery, but it looks an awful lot like a US Government shakedown of foreign companies to help alleviate some of the deficit that Trump's tax cuts have widened.

    Why can't the EU start fining US companies for their foreign bribery cases?

    1. macjules

      If you want a NASDAQ listing then I'm afraid that your conduct is indeed subject to US law enforcement.

      1. Anonymous Coward
        Anonymous Coward

        It's not only the NASDAQ listing, it's also that weird thing that US companies that get caught are fined in the millions, and the EU ones, in the billions. Strange, but surely a mere coincidence, right?

        1. macjules

          The EU tends to fine US "social" media giants in the billions for their various nefarious acts so I suppose the US courts/DoJ feel justified in reciprocating.

    2. Someone Else Silver badge

      Why can't the EU start fining US companies for their foreign bribery cases?

      They'd have to start with the Trump Organization, and the Donald himself; and, and recent events will amply demonstrate, we can't do that!!

  2. Spanners Silver badge
    Flame

    So basically

    A non-US company bribes someone in another non-US country and the USA feels that, as the world police, they are entitled to investigate and/or extract money.

    Many US companies got to where they are by dodgy deals (the F104 and MS Windows for example). Now that they are at the top of the tree, the ladder must be pulled up in case other countries demonstrate that they are short on principles too.

    1. Doctor Syntax Silver badge

      Re: So basically

      It may well be the case that bribery is a standard cost of doing business in those countries. Another way of looking at it might be that in those circumstances the US Govt. has decided to join in the game and get its own bung.

    2. Anonymous Coward
      Headmaster

      Re: So basically

      Ericsson's stock is traded through the NASDAQ in the U.S. That makes their worldwide activities subject to the Foreign Corrupt Practices Act. If Ericsson was not listed in the U.S., and their U.S. operations and personnel were not involved in conducting or covering up the bribery, and no Ericsson non-U.S. personnel planned, conducted or covered up activities banned under the FCPA while in the U.S. and its territories, then you would be right and their would be no U.S. jurisidiction over any corrupt practices.

      1. Anonymous Coward
        Anonymous Coward

        Re: So basically

        And yet, Google and others whine when compelled to abide by EU laws, merely on EU territory, like it's some sort of great injustice...

    3. Jr4162

      Re: So basically

      If an company is listed on a US stock exchange, the US government can punish them for financial malfeasance.

      1. Spanners Silver badge
        Big Brother

        Re: So basically

        financial malfeasance

        That means not being a US corporation then?

  3. Blockchain commentard

    So, they're bribing the DoJ and SEC with $1bn to make the previous bribery allegations go away. Setting themselves up surely?

  4. Martin Gregorie

    Ericson are a Swedish company, so surely its up to the Swedes rather than anybody else, to punish the company for bribery and corruption.

    Similarly it would be reasonable for the bribe takers to be punished by the governments of their countries, assuming that soliciting kickbacks is illegal in those places.

    However, as apparently none of the parties to any of these deals are Americans, exactly what gives the US Government the right to stick its oar in? However, doing so is a nice little earner for the US Government, innit?

    1. Anonymous Coward
      Headmaster

      Ericcsson's stock is traded in the U.S. on NASDAQ, so it is subject to the FCPA

      FCPA training and compliance is a big deal. I have sat through FCPA training at several of the Silicon Valley companies I worked for. I can specifically remember FCPA training at Unity Technologies, Symantec, Cisco, Saavis Inc and one now very defunct startup I was at. I am sure there are other companies I have been at whose training on this subject I have forgotten.

      Ericsson is listed in the U.S., and their personnel in their U.S. operations may have been involved in the bribery in question or covering up that bribery. Technically, you can have someone from Ericsson's offices outside the U.S. go to the U.S. on a business trip and conduct activity in support of this bribery while in the U.S., and that makes them and Ericsson liable under the FCPA. That is true even if that non-U.S. employee never sets foot in the U.S. again. That is to keep American multinationals from offshoring their corrupt practices to overseas offices, subsidiaries and personnel, while proclaiming that their American operations and personnel are completely innocent of activities banned by the FCPA.

      From the Wikipedia page on the Foreign Corrupt Practices Act.

      "The core aim of the Foreign Corrupt Practices Act (FCPA) is to prohibit companies and their individual officers from influencing foreign officials with any personal payments or rewards.[4] The FCPA applies to any person who has a certain degree of connection to the United States and engages in corrupt practices abroad, as well as to U.S. businesses, foreign corporations trading securities in the U.S., American nationals, citizens, and residents acting in furtherance of a foreign corrupt practice, whether or not they are physically present in the U.S. This is considered the nationality principle of the Act. Any individuals involved in these activities may face prison time.[4][page needed]

      In the case of foreign natural and legal persons, the Act covers their deeds if they are in the U.S. at the time of the corrupt conduct. This is considered the protective principle of the Act.[4] Moreover, the FCPA governs not only direct payments to foreign officials, candidates, and parties, but payments made to any other recipient in furtherance of influencing a foreign official, candidate, or party. These payments are not restricted to monetary forms and may include anything of value.[5] This is considered the territoriality principle of the act."

      1. Anonymous Coward
        Anonymous Coward

        Re: Ericcsson's stock is traded in the U.S. on NASDAQ, so it is subject to the FCPA

        I work in the EU for US company, and frankly, it's BS. They force everybody to go through an online "training" session, with a "test" to pass. First, it's in English, in a non-English speaking country. Then the test is laughable, a few multiple-choices to make. Some years, they even give you your wrong answers at the end before forcing you to retake the same test.

        But at the end of the day, hey, presto, by the magic of having us tick those boxes of barely understandable foreign legalese, they're not liable anymore!

        It's all BS, a US gov racket aimed at foreign companies.

        1. Anonymous Coward
          Anonymous Coward

          Re: Ericcsson's stock is traded in the U.S. on NASDAQ, so it is subject to the FCPA

          One of the reasons I remember the training when I was at Saavis was the online test they gave you after your FCPA reading materials. A couple of the questions were almost on the level of "True or false, is it permissable under the FCPA to give a Saudi prince a briefcase full of money in exchange for a contract?" Meanwhile, I am sitting there thinking that this question lacks a certain amount of nuance.

        2. Anonymous Coward
          Anonymous Coward

          Re: Ericcsson's stock is traded in the U.S. on NASDAQ, so it is subject to the FCPA

          @AC

          The training does not waive liability for corrupt practices as defined by the FCPA. It is done to train personnel on how to conduct business in compliance with the FCPA. The penalties for FCPA violation can be pretty heavy, both in terms of fines and jail time. FCPA violations can get company executives tossed into prison, so there is a lot of interest in training people to conduct business in compliance with the act.

          1. veti Silver badge

            Re: Ericcsson's stock is traded in the U.S. on NASDAQ, so it is subject to the FCPA

            And when those company execs are hauled into the dock, their defence will be "You can't possibly blame us, look at all this training we made people sit through!"

            Yes, it is all about liability.

  5. batfink Silver badge

    Ah I love the fact

    ...that you can just pay money to have charges dropped.

    America, yeah!

    1. Pascal Monett Silver badge

      Re: Ah I love the fact

      So right. What ? You accuse us of bribery ? Here, take a billion and leave us alone, deal ? Cool.

  6. vogon00
    Pirate

    Oh, delicious irony

    I worked for Ericsson for a while some time ago, before myself and lots of highly skilled and talented colleagues got sacrificed to the God of the low-cost-countries.

    Now, someone way, way senior compared to us has done the dirty. I hope his training record has the appropriate tick in the box!

    The beautifully ironic thing is that us plebs were continually harangued about the right way to behave commercially when overseas, with a mandatory Sarbanes–Oxley Act compliance and awareness course.

    Us engineering types recognised it for the corporate arse-covering-exercise it was, and simply didn't bother to waste our considerably more valuable time to attend....which irritated HR no end.

    At one stage, more than one of us were required for return from pretty distant secondments for *one day* to do the course.

    Icon as the senior team are obviously behaving this way...

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