MOBILE PHONE firm Ericsson is in the middle of a vast corruption scandal.

Some details are really shocking — like probably paying off Isis terrorists in Iraq — but I’d like to look at some of the more mundane nuts and bolts of how bribes are paid, because they show how prosecutable corruption is closely related to a more general, systemic corruption.

Corruption features in the international mobile phone business because networks typically rely on licences from governments or subcontracts with national phone companies.

There are public officials with a lot of influence over huge contracts, especially as mobile networks grow and are upgraded across the world

The Ericsson scandal first broke in 2019, when the Swedish telecoms giant agreed to pay a $1 billion fine to the US Department of Justice (USDOJ).

Ericsson admitted to what US officials called “a years-long campaign of corruption in five countries to solidify its grip on telecommunications business … through slush funds, bribes, gifts and graft,” which “involved high-level executives and spanned 17 years and at least five countries.”

Ericsson paid bribes in China ($31.5 million), Indonesia ($45m), Vietnam ($4.8m) and Kuwait ($450,000) between 2000 and 2016.

The USDOJ says bribes were paid through “consulting companies” or “sham contracts” as well as “an expense account that covered gifts, travel and entertainment for foreign officials.”

The scandal revived this February when the International Coalition of Investigative Journalists (ICIJ) was leaked an internal Ericsson “due diligence” report which suggests the corruption went much further than the company admitted to the USDOJ in 2019.

Ericsson held its own internal inquiry into corrupt behaviour and it looks very like the firm hid a lot of corruption from the USDOJ, even when it made the 2019 settlement.

Possibly corrupt behaviour is noted in many more countries in the leaked internal report, including the US, Portugal, Spain, Azerbaijan and 10 other nations.

The ICIJ has picked out the most shocking. Ericsson paid associates of government officials for many years in Iraq. In 2014, as Isis took control of large parts the country, Ericsson regional staff agreed to seek “permission from ‘local authority Isis’” to continue their business.

They paid extra to middle-men who would in turn pay Isis to allow Ericsson to drive around Iraq and instal its mobile phone masts in areas controlled by the terrorist group.

That’s the headline story, but I wanted to look at the mechanics of the more run-of-the-mill bribery.

Ericsson agreeing to pay a large fine meant that there was no major court case in 2019, which would have revealed some of the more specific details.

However, the USDOJ did launch a prosecution of one Ericsson executive last September: the charges lay out how USDOJ thinks the bribe scheme worked.

It says that the executive, a dual Swedish-Ethiopian citizen called Afework “Affe” Bereket, worked for Ericsson Egypt as its account manager for the Horn of Africa.

Bereket led a scheme to pay a $2.1m bribe to high-level government officials in the African Republic of  Djibouti, in order to win and keep a $20.3m telecoms contract.

The bribe was paid by entering into a “sham contract” with a “consulting company” paying it for work that wasn’t really done.

Bereket covered the fake deal with a “due diligence” report he wrote for head office that hid the fact the consulting company was actually owned by the spouse of a senior official.

While Bereket went through the motions of filing the paperwork to cover bribery, plenty of people in the firm understood what was going on.

He emailed the office to press for paying the consulting company ASAP, explaining: “Everybody in the ministry [is] waiting their part of the cake.”

So a state contractor paying the relative of a current government official for non-work is bribery. But it is not completely removed from other business practices that are common in Britain, where a state contractor doing poor work hiring a former minister or government official or relative of figures in the leading party is normal.

One is a kind of specific, individual corruption. The other a kind of general, systemic one. Where the second is normal, the first is more likely to happen.

Moreover both can increase the amount public money flowing to private contractors for bad work.

Another detail that is released in the ICIJ leak is telling. Among the really shocking stories about Isis, Ericsson’s own internal investigators point to the firm paying for “pocket money and travel costs” for 10 representatives of Iraq’s Ministry of Defence (MoD) to travel to Spain and Sweden.

The report says: “Approximately £20k was paid by Ericsson. Additional costs for gifts and entertainments for MoD representatives during the trip was also confirmed, with a total cost for the travel except the pocket money of $97.8k.”

The investigators say that because the firm was in negotiations with Iraq’s MoD for a contract at the time, “offering pocket money and payment of travel costs and gifts to government officials is a breach of the Erricsson anti-corruption group directive.”

So paying for travel and entertainment of public officials during contract negotiations is corruption, but again, this is on a continuum.

Private companies involved in longer-term negotiations with the government about regulations and contracts can and regularly do take MPs from the governing party on well-financed “fact-finding” trips or to sports and entertainment events.

This tends to involve back-bench MPs or former ministers, rather than current ministers or officials — although in the case of the Ministry of Defence, current officials are quite regularly entertained by arms firms.

There is a kind of broader corruption which is related to the more targeted corruption shown in the Ericsson case.