(Bloomberg) -- A unit of Ericsson AB pleaded guilty to foreign bribery and the parent company agreed to pay more than $1 billion to resolve a long-running U.S. corruption investigation involving potential payoffs in several countries.
As part of the settlement in federal court in New York, which had been expected, Ericsson entered into a deferred-prosecution agreement and will add an independent monitor to ensure its compliance with anti-bribery laws.
The settlement includes a $520 million criminal penalty imposed by the Justice Department and about $540 million to be paid to the Securities and Exchange Commission.
The company admitted to a years-long campaign of corruption in five countries aimed at solidifying its grip on telecommunications business, according to U.S. Attorney Geoffrey S. Berman in Manhattan.
“Through slush funds, bribes, gifts and graft, Ericsson conducted telecommunications business with the guiding principle that ‘money talks,’” Berman said in a written statement announcing the settlement.
From 2000 to 2016, Stockholm-based Ericsson conspired with others to violate the U.S. Foreign Corrupt Practices Act -- paying bribes, falsifying books and records and failing to implement reasonable internal accounting controls, the Justice Department said. The company bribed government officials through third-party agents and consultants, it said.
The resolutions cover the company’s conduct in Djibouti, China, Vietnam, Indonesia and Kuwait.
In September, Ericsson said it had set aside 12 billion kronor ($1.2 billion) to cover U.S. penalties. Ericsson has said it’s been cooperating with U.S. investigators since 2013.
The Justice Department said Ericsson earned a 15% reduction in penalties for its cooperation. However, it said Ericsson didn’t receive full credit for cooperation because it didn’t disclose some allegations of corruption, didn’t produce certain documents and failed to take adequate disciplinary measures against some employees.
Ericsson has been moving to resolve the matter as it competes with Nokia Oyj for 5G network supply contracts and tries to take advantage of a U.S.-led boycott against Huawei Technologies Co., an Ericsson rival.
The $1 billion overall penalty is near the top of foreign-corruption cases and above those assessed against other telecommunications companies. Telia Co. paid $965 million in penalties in 2017 after admitting to paying hundreds of millions of dollars in bribes to a government official in Uzbekistan.
(Updates with details of the settlement)
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