Airbus under scrutiny for middleman involvement in Kuwait deal

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Sonjib Chandra Das
  • Update Time : Tuesday, October 22, 2024
Airbus

The Airbus bribery scandal has reached new heights as emails obtained by reporters reveal that senior executives at the European aerospace giant maintained communication with a middleman during a controversial Kuwait military helicopters deal. This continued engagement occurred even while the company was under international scrutiny for allegedly using intermediaries to bribe clients across multiple countries. The middleman in question, Farid Abdelnour, played a central role in the negotiations for the Kuwait contracts, further highlighting the tangled web of Airbus’ controversial dealings.

In 2016, Airbus secured a lucrative contract with Kuwait’s Ministry of Defense, reportedly worth around €1 billion. The deal involved the delivery of 30 military Caracal helicopters, as well as negotiations for a separate contract for civilian helicopters. The procurement, however, has been marred by accusations of bribery and the use of middlemen, raising serious concerns about corruption.

Emails leaked to reporters from the French media outlet Revue XXI and shared with the Organized Crime and Corruption Reporting Project (OCCRP) show that despite Airbus Helicopters’ internal pledge to halt payments to intermediaries in 2015, executives continued discussions with Abdelnour well into 2016. This revelation comes at a time when Airbus was already embroiled in multiple legal probes for bribery in various countries.

Farid Abdelnour, a 65-year-old consultant, emerged as a key figure in the Kuwait helicopter deal. The leaked correspondence suggests that Airbus executives, including current CEO Guillaume Faury, who at the time led the helicopter division, engaged in regular communication with Abdelnour. Even after Airbus came under investigation for corruption and bribery in other nations, the company appeared willing to pay Abdelnour’s invoices, further complicating its legal standing.

The correspondence revealed that Faury and his colleagues continued to value Abdelnour’s work, with Faury himself thanking him for his support in Kuwait. In one email from October 2015, Abdelnour sent an urgent message to Faury, demanding a response after a period of radio silence. Faury’s reply was swift and seemingly supportive, acknowledging that Abdelnour’s contributions were “crucial” to the success of the deal.

Despite the internal compliance review at Airbus, which concluded in late 2015 that there were significant issues with its global intermediaries, the company did not sever ties with Abdelnour until December 2016. By then, it had already secured the contract with Kuwait, raising concerns about the ethical practices involved in securing the deal.

The situation became further complicated when Abdelnour, after not receiving payments from Airbus for his work on the Kuwait deal, took the company to arbitration at the Paris-based International Chamber of Commerce. In 2020, the arbitration court ruled in Abdelnour’s favor, ordering Airbus to pay him €12 million. The ruling was based in part on the correspondence between Airbus executives and Abdelnour, which suggested that the company had continued “business as usual” with the intermediary well into 2016.

The arbitration ruling caught the attention of Kuwaiti officials, who launched their own investigation into whether the payment to Abdelnour constituted a form of “commission” on the helicopter contract. Despite Airbus’ assurances to Kuwait that no such commissions had been or would be paid, the ruling raised suspicions within the Kuwaiti Ministry of Defense, further complicating Airbus’ standing in the country.

In 2020, Airbus struck a series of deferred prosecution agreements (DPAs) with authorities in France, the UK, and the US to avoid criminal prosecution for its use of intermediaries to secure contracts. The agreements required Airbus to pay a staggering $3.9 billion in fines, which at the time was the largest DPA settlement ever. However, the Kuwait helicopter deal and Abdelnour’s involvement were not included in these agreements, as the investigation into the Caracal contract was initiated later by Kuwaiti officials.

The DPAs were intended to allow Airbus to move past its legal troubles, but the revelations about continued engagement with intermediaries like Abdelnour during this period raise questions about whether the company fully cooperated with investigating authorities. Rory Donaldson, head of the business integrity program at Transparency International UK, pointed out that to qualify for a DPA, companies must cease all corrupt practices once they have self-reported. The leaked emails, however, suggest that Airbus may have failed to meet this requirement, as it continued to work with Abdelnour even after reporting its own misconduct to UK authorities.

The Kuwaiti investigation into the Caracal helicopter deal culminated in a parliamentary committee report in January 2024, accusing Airbus of “fraud and deception” in its handling of the contract. The report raised serious concerns about the transparency and integrity of the deal, accusing the company of paying commissions despite its promises to the Kuwaiti government.

According to the findings, Airbus’ conduct led to the waste of €349 million in public funds, and eight senior Kuwaiti officials were held responsible for enabling these damaging actions. Seven of these officials were suspected of profiteering, with one being accused of concealing crucial information about the payment of commissions. The Kuwaiti Ministry of Defense also complained about several operational issues with the helicopters, including spare parts shortages and untrained pilots, further compounding the problems associated with the deal.

While the Kuwaiti parliament dissolved in May 2024, leaving questions about the long-term consequences of the report, the findings have added significant pressure on Airbus. The ongoing investigation has damaged the company’s reputation, and the prospect of further legal action remains a real possibility. Kuwait’s parliamentary report claimed a staggering waste of resources, while Airbus continues to deny any wrongdoing related to commission payments.

As the bribery probe unfolds, the case serves as a stark reminder of the challenges global corporations face in balancing business interests with ethical obligations. For Airbus, the continued fallout from its dealings with intermediaries like Abdelnour demonstrates the long-lasting repercussions of corrupt practices. Whether the company will face further legal consequences for its actions in Kuwait remains uncertain, but the shadow of scandal continues to loom over one of the world’s largest aerospace firms.

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Avatar photo Sonjib Chandra Das is a Staff Correspondent of Blitz.

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