Issues & Insights

We Won’t Be Fooled Again

Ukrainian President Volodymyr Zelensky’s impassioned pleas for aid to President Joe Biden and Congress highlights the horrors inflicted on his people and the need for countries, corporations and individuals to do the right thing. It also demonstrates those who are willing to work with the Russian government despite their actions. Some nations like Iran and China continue to bolster the Putin regime in order to destabilize the globe and continue a senseless war.

The French company Airbus, a major aerospace manufacture, heavily subsidized by European governments, only recently announced it will stop purchasing titanium from Russia. The company claimed it will phase out its business relationship in the months to come. If the slow and calculated withdrawal is to gain a competitive advantage over other companies that have cut ties with, curry favor with the Russian government, or to wait and see if the global pressure to isolate Vladimir Putin subsides is unknown.

The expression says “Fool me once, shame on you. Fool me twice, shame on me.” It reminds us that there is no reason to trust a person – or a company – after it has been caught deceiving you. So shame on all of us if we do business – or allow our governments to do business with a company that has ethical scandals and has shown a willingness to go against America’s national interest.

This month, a French court approved a 16 million Euro settlement with Airbus relating to charges that it paid bribes in Libya and Kazakhstan, as reported by Euro News on Dec. 1. The Libya charges go all the way back to the days before the revolution there, when the country was run by the Qadhafi regime This was at a time when the United States had sanctioned the nation on April 15, 1992, because of a Libyan agent convicted and imprisoned for the 1988 Lockerbie bombing. 

This round of penalties follows a massive settlement just three years ago, according to a U.S Justice Department release dated Jan. 31, 2020. At that time, Airbus paid “combined penalties of more than $3.9 billion to resolve foreign bribery charges with authorities in the United States, France and the United Kingdom arising out of the company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the company’s violation of the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in the United States.” This was a huge settlement for a company that had engaged in some really unethical behavior.

The massive fine marked the end of one case, but didn’t outline the limits of the ethical morass that Airbus was engaging in. “Friday was the end of Act I, now we are seeing the beginning of Act II with possible repercussions on airline relationships,” a person close to Airbus admitted to Reuters two years ago. Other countries, including Ghana and Colombia, opened investigations of government dealings with Airbus in 2020, so there may be more revelations.

There are always lessons to be learned. In 2020, an American law firm wrote that: “This case and others should serve as a clear wake-up call to company compliance officers to reexamine anti-corruption policies and procedures, on paper and in practice.” But Airbus must not have read that memo and didn’t learn much from its punishment, if the new settlement is any indication.

The reason to be concerned about all this is that Airbus is an important government military contractor. “International corruption involving sensitive U.S. defense technology presents a particularly dangerous combination,” as Principal Deputy Assistant Attorney General David P. Burns explained two years ago. “Today’s announcement demonstrates the Department’s continuing commitment to ensuring that those who violate our export control laws are held to account.”

Despite the pattern, Airbus has apparently not been held to account. It remains a major contractor for the American military and for our European allies. Whether or not it has cleaned up its act is unclear. However, all the tax dollars in aid the U.S. and its allies provide to the beleaguered country of Ukraine will not matter if NATO members continue to do business with companies that flaunt basic American and EU laws and interests.

Dave Mohel is president of BlueSkin Solutions.

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1 comment

  • This is at best a silly article at worst an insult to the reader. We as a country have become so impressed with ourselves that we expect the entire world to bow at our feet or we will punish them for failing to. Sanctions are an act of war. Do Not Forget that.

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