Record $4 billion Airbus fine draws line under 'pervasive' bribery

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PARIS/LONDON/WASHINGTON (Reuters) - Airbus bribed public officials and hid the payments as part of a pattern of worldwide corruption, prosecutors said on Friday as the European planemaker agreed a record $4 billion settlement with France, Britain and the United States.

The disclosures, made public after a nearly four-year investigation spanning sales to more than a dozen overseas markets, came as courts on both sides of the Atlantic formally approved settlements that lift a legal cloud that has hung over Europe’s largest aerospace group for years.

“It was a pervasive and pernicious bribery scheme in various divisions of Airbus SE that went on for a number of years,” U.S. District Judge Thomas Hogan said.

The deal, effectively a corporate plea bargain, means Airbus has avoided criminal prosecution that would have risked it being barred from public contracts in the United States and European Union - a massive blow for a major defense and space supplier.

Prosecutors said individuals could still face criminal charges, however.

Airbus, whose shares closed down 1%, has been investigated by French and British authorities for alleged corruption over jet sales dating back more than a decade. It has also faced U.S. inquiries over suspected violations of U.S. export controls.

“In reaching this agreement today, we are helping Airbus to turn the page definitively” on corrupt past practices, French prosecutor Jean-Francois Bohnert said.

France’s financial prosecutor said the company had also agreed to three years “light compliance monitoring” by the country’s anti-corruption agency.

The U.S. Department of Justice said the deal was the largest ever foreign bribery settlement.

CODE NAME ‘VAN GOGH’

In a packed hearing at London’s Royal Courts of Justice, an Airbus lawyer said the settlements “draw a clear line under the investigation and under the grave historic practices”.

Outlining detailed findings, the UK’s Serious Fraud Office (SFO) said Airbus had hired the wife of a Sri Lankan Airlines executive as its intermediary and misled Britain’s UKEF export credit agency over her name and gender, while paying $2 million to her company. The airline could not be reached for comment.

On defense deals, Airbus hired and disguised payments to a close relative of a government official in Ghana with no aerospace experience in connection with a sale of military transport planes, the SFO said. Ghana’s government could not immediately be reached.

Court filings in Britain and the United States outlined efforts to keep relationships and payments secret, including the use of code names such as ‘Van Gogh’ and payments described as “medications and dosages prescribed by Dr Brown”.

The SFO said Airbus sponsored a sports team owned by AirAsia executives while negotiating airplane orders.

AirAsia officials have strongly denied any wrongdoing in connection with the 2012 sponsorship agreement between the Caterham Formula 1 racing team and Airbus’ then parent EADS.

AirAsia could not immediately be reached for comment.

The British investigation also identified bribery allegations involving Taiwan’s TransAsia Airways, Garuda Indonesia and Citilink Indonesia.

Garuda and Citilink did not immediately respond to requests for comment. TransAsia went bankrupt in 2018.

The U.S. court documents outlined bribery and lavish hospitality involving plane sales to China.

NETWORK OF MIDDLEMEN

French and U.S. prosecutors said the settlement covered Airbus only as a company and any current or former employees involved in related crimes could still be open to prosecution.

“With this settlement we’ve completed a first phase ... we are now going to have to examine individual responsibilities,” French prosecutor Bohnert told reporters.


The UK’s SFO last year abandoned attempts to prosecute individuals following what was then a record bribery settlement with engine maker Rolls-Royce in 2017.

At the center of the Airbus case was a decades-old system of third-party sales agents run from a now-disbanded headquarters unit that at its height involved some 250 people and several hundreds of millions of euros of payments a year, sources familiar with the matter have said.

Airbus has said it halted payments in 2014 after discovering false statements on the use of agents to Britain’s’ export credit agency and later took its findings to UK authorities.

An internal investigation, which racked up legal bills of around 100 million euros a year, led to a board-driven clearout of top management and plunged Airbus into years of self-examination, hampering its sales efforts.

The probe also triggered an internal row over responsibility for lapses, with Airbus employees insisting they had no control over the choice of agents or offset deals handled under a separate entity, EADS, the former Airbus parent company.

Others say the system, whose roots go back decades to an era when payments to win deals were tolerated and tax-deductible, was an open secret in the company and French political circles where it was intertwined with influence-building abroad.

Airbus to pay around 1 billion euros in UK slice of global bribery settlement

LONDON (Reuters) - Airbus, the world’s largest aircraft maker, will pay just under 1 billion euros ($1.11 billion)in a British settlement to draw a line under a three-and-a-half year criminal investigation into allegations of fraud, bribery and corruption.

The deal under a three-year Deferred Prosecution Agreement (DPA), ratified in London’s High Court on Friday, means the European planemaker avoids prosecution in London in a case that spanned transactions involving more than a dozen countries.

UK prosecutors said Airbus failed to prevent individuals associated with the company from bribery involving Malaysia’s AirAsia and AirAsia X, SriLankan Airlines, Taiwan’s TransAsia Airways, Garuda Indonesia and Citilink Indonesia. They said the case also involved the sale of military aircraft to Ghana.

Earlier on Friday France’s prosecutor said the plane maker would pay a total of 3.592 billion euros in global corruption fines once settlements are reached.

U.S. judge approves Airbus deferred prosecution agreement over bribery probe

WASHINGTON (Reuters) - U.S. District Judge Thomas Hogan on Friday approved a deal to resolve the Justice Department’s probe into charges airplane Airbus SE violated anti-bribery laws and export controls.

“It was a pervasive and pernicious bribery scheme in various divisions of Airbus SE that went on for a number of years,” Hogan said in court.

Under the deal, Airbus is paying about $4 billion worldwide. Airbus will pay the U.S. Treasury about $527 million, a U.S. prosecutor said in a court hearing Friday. Airbus will face oversight from an outside monitor. Prosecutors will not pursue criminal prosecution against the company over the next three years as long as they are in compliance with the agreement. 

Airbus says it's settled with U.S., Britain, France over corruption cases

By Clyde Hughes

If approved, the settlements would end years-long investigations of the planemaker involving reports of corruption and bribery. 

Jan. 28 (UPI) -- Airplane manufacturer Airbus announced on Tuesday it has reached settlements with British, French and United States authorities over accusations of bribery and corruption.

Toulouse, France-based Airbus said it couldn't give details of the agreements, but said settlements were reached in principle.

Investigations began in Britain and France more than three years ago following accusations of corruption involved in Airbus jet sales. An inquiry was similarly started in the United States over suspected violations of export controls.

Settlements with each of the three nations would still require court approval.

"These agreements are made in the context of investigations into allegations of bribery and corruption as well as compliance with the U.S. International Traffic in Arms Regulations," Airbus said in a statement.

Analysts told The Financial Times Airbus could ultimately pay more than $3 billion in fines -- possibly surpassing the $738.5 million plea bargain to settle similar charges with Rolls-Royce in 2017.

Since the start of the investigations, most of Airbus's top management team have been replaced or retired -- including former CEO Tom Enders, who was one of several people investigated in 2017 by Austrian authorities in a separate case.

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