Ericsson’s ongoing corruption scandal

The Swedish telecommunication company Ericsson is facing the prospect of being fined again by the U.S. Department of Justice (DOJ). In 2019 Ericsson was fined $1 billion for breaching the Foreign Corrupt Practices Act (FCPA). It is important to note that the DOJ can fine Ericsson, a Swedish company because they are listed on the New York Stock Exchange. Ericsson was found guilty of handing out bribes and operating illicit slush funds to expand their business. According to an article by tech website Fiercewireless.com, Ericsson bribed officials in six countries, Vietnam, China, Djibouti, Indonesia, Kuwait, and Saudi Arabia. On top of that, early last year, there were reports that Ericsson may or may not have paid a bribe to someone affiliated with ISIS to provide telecom equipment to Iraq.

Last week, a Reuters article revealed that Ericsson would be fined another $206 million for not adhering to its original agreement with the DOJ. According to a statement by the DOJ, Ericsson breached the DPA (Deferred Prosecution Agreement) by violating the agreement’s cooperation and disclosure provisions. This means Ericsson was not upfront with the DOJ about their financial activities. As a result, Ericsson must be overseen by an outside compliance professional for a further two years. In many countries where Ericsson operates, corruption is simply part of doing business. However, Ericsson didn’t heed the DOJ’s warning and is now facing a stiffer financial penalty that could have been avoided.

Ukraine Appoints a New Anti-Corruption Czar.

Last week, the Ukrainian government appointed Semen Kryvonos as the new National Anti-Corruption Bureau of Ukraine (NABU) director. According to a Reuters article, Ukrainian prime minister Denys Shmyhal stated that this appointment would satisfy one of the requirements allowing Ukraine to be accepted into the European Union. They must commit to tackling the widespread corruption that has plagued the country for years to gain entry. Despite Kryvonos’ appointment, questions about his suitability for this role have been asked. According to an article published by euromaidanpress.com, the Anti-Corruption Action Center, an activist group in Ukraine, worries that Kryvonos’s previous experience in Ukraine’s urban planning department isn’t sufficient experience for tackling endemic graft. This is a step in the right direction, but Ukraine will have to do more if it is genuinely serious about combating malfeasance and obtaining entry into the EU.

Allegations of Corruption at The Lebanese Central Bank.

Recently, allegations of embezzlement, money laundering, and illicit enrichment have been leveled at the head of the Lebanese central bank Riad Salameh, his brother Raja, and an advisor to Riad. According to an article by the BBC, Salameh and his brother allegedly stole $300 million from Banque Du Liban between 2002 and 2015. Lebanon is a country that, in recent years, has been in the grip of a prolonged recession. According to statistics in the BBC article, 80 percent of the population in Lebanon lives in poverty. A report in Reuters stated that Salameh and his brother allegedly funneled the stolen money through a shell company called Forry Associates based in the British Virgin Islands. It was alleged that a large portion of the funds stolen was used to purchase real estate in European countries.

The Swiss Financial Market Supervisory Authority (FINMA) announced that it was investigating twelve banks that are thought to have aided Salameh in his misdeeds. FINMA recently froze the Swiss assets of Salameh. Several well-known banks, such as HSBC, where Salameh holds an account, could be caught up in the investigation. The situation regarding the charges Salameh faces in Lebanon is more complex. An article by The National News, an English-language newspaper based in the United Arab Emirates, reports that Raja Hamoush, the public prosecutor for Beirut, confirmed that Salameh was being charged with embezzlement, money laundering, and illicit enrichment. In a separate article by The National, another investigation of similar scope was started in 2021 by Lebanese judge Jean Tannous. This appears to be a tangled legal web that will take some time to resolve if it gets sorted out.

The Wagner Group Sanctioned: Putin’s Corrupt Paramilitary

Recently, a mysterious paramilitary group called the Wagner Group, run by a crony of President Putin, has been in the news. Wagner is run by a man named Yevgeny Prigozhin, who, earlier in his life, was in prison after committing a series of robberies in the early 80s. According to an article in The Guardian, Prigozhin excelled in the free-wheeling culture in St Petersburg in the early 1990s. He quickly moved from selling hot dogs to buying up stakes in supermarkets and a liquor store. Eventually, he started managing a restaurant called the Old Customs House, where he made meaningful political connections.

Not long after, Prigozhin started to get involved in military-related issues due to being awarded catering contracts for the army. Shortly afterwards, according to the article in The Guardian, he asked the Russian Ministry of Defense for a parcel of land to train “volunteers” that would have no links to the regular Russian army. The organization quickly became Putin’s go-to option for any off-the-books military operations and gained a bloody reputation in Syria. Since the beginning of the war in Ukraine, Wagner has taken a more prominent role within the Russian military. On January 20th, Wagner was sanctioned by the U.S. government as a transnational criminal organization. According to an article in the AP, Wagner allegedly spends over $100 million monthly on the war in Ukraine. It is not clear from the article where precisely this money comes from, but it is a safe assumption that it comes from the Russian state. If the West is to aid Ukraine, limiting the ability of people or entities wishing to provide material support to the Wagner group will be essential.

Vietnam’s Ongoing COVID Corruption Scandal.

In recent weeks The Vietnamese government has been conducting a widespread anti-corruption crackdown. The head of the communist party, Nguyen Phu Trong, is driving this crackdown. According to an article by The Washington Post, two deputy prime ministers in Vietnam have resigned because their staff members have been detained on corruption charges. The allegations involve taking bribes during the COVID pandemic. One staff member was alleged to have taken bribes while purchasing COVID test kits, and another staff member was alleged to have taken an illegal payment from a transport company repatriating Vietnamese citizens who lived abroad. This is on top of a former deputy health minister being sentenced to four years in prison for being involved in a counterfeit medicine scheme.

Recently, an article by Aljazeera reported that the President of Vietnam, Nguyen Xuan Phuc resigned from his post after an internal Communist Party investigation. Phuc was said to have “taken political responsibility as leader when several officials, including two deputy prime ministers and three ministers, committed violations and shortcomings, causing very serious consequences .” An article in The Guardian stated that Phuc’s resignation might also be tied to political infighting in the Communist Party. It was also reported in an article by Radio Free Asia that the head of the agency related to vehicle registration was arrested on charges of taking bribes from the directors of regional vehicle registration centers across the country. It is clear that more high-profile names will likely be caught up in this mess.

Zelenskyy’s House Cleaning.

President Volodymyr Zelenskyy has recently fired several high-ranking officials in what is becoming an ever-widening corruption scandal. Reports emerged on Monday, the 23rd of January, that Zelenskyy had fired his deputy infrastructure minister Vasyl Lozinskyi for allegedly stealing $400,000 intended to support the war effort. According to an article in The Guardian, Lozinskyi colluded with contractors to inflate the price of items such as generators, and he would pocket the difference. And according to a Reuters article from the 22nd of January, defense minister Oleksiy Reznikov had secured food on contracts at highly inflated prices. Zelenskyy’s deputy cabinet minister was also fired after allegations emerged that he drove luxury cars around Kyiv shortly after Russia invaded.

A recent Washington Post article highlights the role journalists and NGOs in Ukraine have played in exposing corrupt schemes. Also, according to a recent report by The Guardian, Oleksandr Novikov, the country’s lead anti-corruption tsar, has vowed not to let up on pursuing corrupt individuals despite being in a war. According to polling done in Ukraine before the war, only 40 percent of the Ukrainian population was willing to report corruption. However, 84 percent of the population is now ready to report wrongdoing. Surely if Countries such as the US and the UK are going to continue giving military aid to Ukraine, they will want to see some progress on the anti-corruption front.

The Trial of Fox Sports’ Acquisition of World Cup Rights

Recently, an ongoing trial has occurred in New York City involving executives from Fox Sports who are facing allegations of paying bribes to secure the World Cup rights for 2018 and 2022, as well as for the Copa Libertadores, a tournament involving clubs from countries from South America. According to an article in the AP, Fox executives schemed to undermine rival bids for the TV rights. The primary witness, Alejandro Burzaco, has alleged that his fellow Fox executives bribed South American football officials to obtain the rights. According to a New York Times article, a well-known former FIFA official from Argentina, Julio Grondona (now deceased), was quoted to have said, “ If Fox puts up $400 million, it will win the rights”. This trial comes amid previous corruption scandals that have engulfed FIFA recently. This trial is ongoing, and there will likely be more revelations—updates to follow.

Russia Leaves European Anti-Corruption Convention.

Recently, the Russian government opted to leave a European Anti-Corruption Convention. This group is run by the Council of Europe, a human rights organization. President Putin asked the Duma, Russia’s Parliament, to end participation in the pact. According to an article written by the Associated Press, Kremlin press secretary Dmitry Peskov said that withdrawal from the convention would not affect official government efforts to fight corruption. This follows a trend of International organizations such as the European Council on Human Rights and the United Nations Humans Rights Council revoking Russia’s membership. I suspect there will be no change in Russia’s already weak efforts to stop corruption within the country.

The Diack Doping Case.

Recently an appeal trial has started in Paris involving the son of the former head of World athletics, Papa Massata Diack. According to Reuters, Diack was convicted on charges relating to kickbacks from Russian athletes in return for hiding their positive drug tests. He was sentenced to five years in prison and was fined €1 million. He is also facing similar legal issues in his native Senegal. This trial is ongoing, and I will update as more information becomes available.

The Downfall of the Corrupt Castillo Government in Peru

Recently in Peru, a constitutional crisis erupted when President Pedro Castillo was ousted from office. According to an article by ABC News, Castillo attempted to dissolve parliament to hold on to power and avoid elections. There had been reports in Peru that corruption had festered within the Castillo administration among some of his ministers. The Peruvian congress was getting ready to attempt to impeach Castillo for the third time when he tried to dissolve parliament. According to the Washington Post, Castillo was detained immediately and escorted out of the presidential palace.

Castillo’s replacement is his former vice president Dina Boluarte. According to the AP, Boluarte plans on instituting a robust anti-corruption platform as a part of her time in office. She has made all her ministers stand against government malfeasance as a requirement of serving in her cabinet. The hope has to be that Boluarte can bring unity to the country and quell the ongoing protests. It is still an open question if she forms a successful enough coalition to stay in power long term.