
Airbus ran ‘massive’ bribery scheme to win orders - avocado4
https://www.ft.com/content/f7a01a60-442b-11ea-abea-0c7a29cd66fe
======
fnord77
> Airbus for years conducted a “massive scheme to offer and pay bribes”,
> involving very senior executives, according to disclosures in courts in
> Washington DC, Paris and London, as Europe’s aerospace champion agreed to
> pay €3.6bn in penalties to regulators in France, the UK and the US.

So nobody went to jail, though

~~~
ekianjo
Nobody goes to jail for "lobbying" in the US while it is clearly about the
same thing as bribery. Just a legal form of it.

~~~
manfredo
While lobbyists have sometimes bribed officials through gifts and perks, which
is illegal, lobbying is not bribery. Say you're interesting in promoting
renewable energy. You and like minded people put together resources to promote
renewable energy to politicians, explaining its benefits. This activity is
lobbying for renewable energy.

~~~
7952
This breaks down when politicians get some kind of personal benefit such as
campaign contributions or a consulting job. This is a conflict of interest and
should exclude them from any vote about the interests of the lobbyist.

~~~
gizmo
Lobbyist help politicians accomplish what they already wanted to do. Whenever
politicians enact policy some interests inevitably benefit from it, and other
interest's goals are frustrated by it. So of course there are going to be
lobbyists (or activists) who want to argue their case on both sides, and good
lobbyists are very well prepared and very persuasive. It's soft influence, and
no quid pro quo is necessary for lobbyists to have a big impact on policy.

~~~
mdorazio
You haven’t explained why lobbyists are necessary, or even a good thing. Why
is a system allowing lobbying better than one that bans it in favor of
politicians independently making decisions based on the will expressed by and
likely benefits for their constituents? And please don’t say it’s hard for
them to understand all the issues. That’s literally their job and the reason
they have a staff.

~~~
m463
If it was banned, it would still happen, but not in the public eye.

A relative of a friend was a politician. He used lobbyists indirectly to work
on issues. Say he needed help understanding a school textbook issue. He would
call up his oil lobbyist, whose job it was to make him happy. It was
definitely not his job to piss him off. He would quickly get a report on the
textbook issue, probably written by _the_ expert in the field.

~~~
jyounker
The lobbyist then gets to choose _an_ expert which represents the _lobbyists_
worldview. This is what he is getting paid to do.

~~~
m463
But the oil lobbyist wouldn't have a horse in the game for school textbooks.
He would play fair in the hope that the politician would "play fair" on future
oil issues.

It's a wierd sort of politician problem solving, making do with the resources
you have.

------
wrnu
Wouldn't be the first time. In Canada our former PM was accused of accepting
'kickbacks' in 1995.

[https://en.m.wikipedia.org/wiki/Airbus_affair](https://en.m.wikipedia.org/wiki/Airbus_affair)

------
neonate
[http://archive.md/MIVp8](http://archive.md/MIVp8)

~~~
lucasverra
Thanks. How do you go from paywall to archive.org link ? Or i was your action
having access behind FT's paywall ?

~~~
333c
The link isn't archive.org. It's a different service.

------
hogFeast
Thank god.

A particularly nasty aspect of this story, alluded to at the bottom but not
made explicit, is that Airbus was taking massive export credits (in the UK,
they got the lion's share of the budget).

It was only in the UK that Airbus was required to actually required to produce
documentation about the customer, and the scheme was only uncovered when
someone at UKEF realised that Airbus wasn't doing this and the govt had been
giving out hundreds of millions to corrupt politicians.

Also, the timeline here is incredible. As soon as the UK announced their
investigation, and Airbus was banned from receiving credits...they were in
negotiations to resume funding, and (somehow) Enders only lost his job 3 years
later (and even the UK has turned back on the money spigot...although this
time with sheepish promises about trying to fund a company other than Airbus
through UKEF).

Airbus is everything that is wrong with the corporate world. Run by
politicians, hopelessly corrupt, always spinning, and receiving massive
subsidies by dint of their impact on local job markets.

~~~
gdy
"Airbus is everything that is wrong with the corporate world."

But it makes planes that don't crash like Boeings.

~~~
sojournerc
[http://www.airsafe.com/events/models/rate_mod.htm](http://www.airsafe.com/events/models/rate_mod.htm)

Not exactly...

~~~
zwirbl
So both companies build planes that crash, with mostly similar rates as well
The outliers in this list are the 747, the A310 and the 737MAX in ascending
order

------
yalogin
Every company doles out bribes. In many countries bribery is the way to go.
Things don’t happen without it. They just find creative ways to make it legal
that’s all.

~~~
spenczar5
“Every company” is obviously hyperbole. My local deli doesn’t bribe anybody.
What do you really mean - every $1bn+ revenue aerospace firm?

~~~
georgemcbay
"My local deli doesn’t bribe anybody."

You sure?

I mean, I agree with you that "every company" is certainly hyperbole, but
bribery happens on different scales. Its not all national level and involving
6+ figure sums.

I know someone who worked at a local restaurant where the owner bribed someone
at the local health inspection office to be tipped off before "random
inspections" giving them a couple of days notice to get things sorted out
prior to the inspection.

I suspect companies committing bribery are the minority, but it can and does
happen at the local small-business level.

~~~
perl4ever
Vehicle inspections.

------
jdkee
Bribery or MCAS? Your choice.

~~~
bobbydroptables
Option 3: start jailing these fraudsters for criminal fraud. Jail corporate
profits for 6 months. Claw back any and all executive pay since the fraud
began and distribute it to low level employees or other victims of the fraud.

If you can't survive as an honest company you don't deserve to survive.

And there are _very_ few people that give the government as many screws as
executives to modify their behavior.

~~~
Ididntdothis
In medical devices when you screw up they can stop you from selling in a
country for a while. That usually wakes people up. Stopping them from doing
business for a while would wake up a lot of companies. But they can always
hold their employees hostage since they would take most of the suffering.

~~~
monadic2
Unless of course the screw up is “normal”, like leaving your device unsecured
and open to the internet (which is wide spread in the medical device
community, at least in practice).

~~~
Ididntdothis
I guess with “screw up” I meant things the regulatory organization doesn’t
like. This could mean just wrong paperwork.

As far as security goes things are improving. Five years ago you got brushed
off if you pointed out how easily hackable the devices were. Now people are
listening and the FDA also seems to understand issues better.

------
drno123
As a business flyer - at this moment I am willing to pay 10-15% more for my
tickets provided I fly only airbus equipment.

~~~
kjaftaedi
Even if you own the business, your funds for traveling should come from the
company and not your own pocket.

------
nixass
Bribery? Don't Americans call it lobbying?

~~~
pxtail
It would be lobbying if involved company would have name 'Boeing' otherwise
it's clearly bribery!

------
LaserToy
Anyone here actually believes it is only Airbus???

~~~
clSTophEjUdRanu
Is there evidence of others?

~~~
pinkfoot
Well, in the UK no less than PM Blair personally interfered to get to SFO to
drop the in investigation into BAE bribery on the Eurofighter Typhoon project
in Saudi Arabia.

Something about 5,000 jobs, ₤6 billion, and - of course - upset Saudi princes.

[https://en.wikipedia.org/wiki/Al-
Yamamah_arms_deal#Serious_F...](https://en.wikipedia.org/wiki/Al-
Yamamah_arms_deal#Serious_Fraud_Office_investigation)

------
jariel
In Canada SNC Lavalin same things.

This is not an easy thing though: the countries in which bribes are paid are
run by corrupt people who expect kickbacks as part of doing business, and
there's no other way about it.

If the West wants to play morally superior on this - then 100% of Airbus,
Boeing, SNC, Halliburton and massive industrials will full-on go out of
business.

This issue is not part of the current round of negotiations with China and
it's too bad, because without a level playing field - many industries will be
wiped out and other countries will be happy to pick up the slack.

This stuff is quite common, we need a comprehensive solution.

One indirect approach might be to invest and push for open journalism in
places like Malaysia, so as to force their own hand on corruption though that
may be asking too much.

~~~
fennecfoxen
I question the premise. The US has the Foreign Corrupt Practices Act of 1977
has already made it illegal to make payments to foreign government officials
to assist in obtaining or retaining business. Somehow, Boeing, SNC,
Halliburton, and many other massive industrials have survived so far.

~~~
D_Alex
>Somehow, Boeing, SNC, Halliburton, and many other massive industrials have
survived so far

>Somehow

At least in cases of SNC and Halliburton, "somehow" was by doing the illegal
thing.

~~~
perl4ever
I don't think it's reasonable to assume that because some companies were
prosecuted under the statute(s) that they, or industry in general, engage in
just as much activity as they would have unregulated.

~~~
jariel
Yes it is.

It's a very natural thing for someone who has status to think that they should
be able to cash in on that power.

Everyone with responsibility is looking at a pile of money every day, all they
have to do is reach out and grab some. And after all, they 'work hard' so why
shouldn't they? (Is the internal logic they might use).

Most businesses are commodities, it's hard to compete on price or anything
else. It makes much more sense to compete on some other basis.

In 2020 most industries continue to run on soft grease. The next time you go
to a sporting event, look at the Box Seats and consider that 100% of them are
business write-offs, used to 'entertain' i.e. to 'give a gift' to someone in
business they are not otherwise allowed to do.

 _There is no such thing as a Free Lunch_

Some might even argue that while it might be unethical to bribe a judge, it's
altogether different for commercial kickbacks. Why should an exec who has
toiled all of his life leave the profits to the considerably more corrupt
owners? ... is the internal logic they might use.

When you think about the nature of power and influence - such activities are
the natural course of action, and it takes a pretty strong, moral social
organization + strong laws to overcome it.

I guess it's a good thing that most regular people in the West think bribery
is bad, and that at least it's not something they should do. That probably
took a few hundred years of indoctrination at least.

~~~
perl4ever
Ok, you disagree. But after writing "Yes it is", none of your following 8
sentences seem to support your opinion.

If someone is prosecuted and assumed guilty of a crime, then it proves that
the law does not prevent the activity 100%. However, it also seems virtually
certain that it prevents _some_ of the crime.

If someone claimed that because people are arrested for murder all the time,
the law(s) against murder have no effect, is that _really_ serious? Or is it
just the sort of thing people like to say, but everyone knows better?

If you make a statement and then don't support it, it creates the unfortunate
appearance that you're not expressing sincere opinions, or if you are, that
you won't explain where they come from.

~~~
fennecfoxen
You left out an unfortunate appearance: that the poster might be rationalizing
the practice of bribery as "everybody does it" specifically because the poster
engages in bribery.

------
manicdee
Every year we learn more about how suit-wearers do business: nepotism,
bribery, kickbacks, back scratching, quid pro quo … but we continue to believe
the myth of the “self made man,” who raised themselves to success by hard work
and thorough understanding of their technical field.

------
philprx
Oh, very surprising, this news comes at the exact right timing for Boeing
during the 737 max debacle ;-)

~~~
Iv
Reminds me of an old story:

[https://www.economist.com/special-
report/2003/06/12/airbuss-...](https://www.economist.com/special-
report/2003/06/12/airbuss-secret-past)

Maybe people here have never heard the EU point of view on it, so let me sum
it up: Airbus bribed Saudi officials in the 90s to get a 6 billion contracts.
It was "whistleblowed" by this then little-known agency: NSA and in the end
Boeing got the contract. It triggered a EU investigation in what was then
called ECHELON. A Cold-war era spying network that was being repurposed for
economic intelligence.

Airbus defense was that in Saudi Arabia, nothing gets done without corruption
and Boeing probably did the same, but of course, EU had no interceptions to
prove it.

I often argue that Snowden told us very little new information and that the EU
kney most of this since 2001. I don't understand why it took 15 years to
become a public concern.

[https://www.europarl.europa.eu/EPRS/EPRS_STUDY_538877_Affair...](https://www.europarl.europa.eu/EPRS/EPRS_STUDY_538877_AffaireEchelon-
EN.pdf)

~~~
Findeton
I agree with all you've said, including that probably the US bribes (or
threatens) as much or more than the EU. But being even more cynical about it,
this is just the way the free market sneaks in, including these big government
deals: one party has money, the other party has power. Say Airbus bribes Saudi
Arabia Officials. The officials don't have that much money, but they surely
have power, and Airbus doesn't have the power to decide on the deal but they
surely have some cash. A transaction is agreed and done and both parties reach
a win-win situation. Of course the losing part is the citizens, but a
capitalistic view of this is that corruption is just anything that breaks the
fairy tale idea that the people that work in government seek the interests of
the general public and not their very own private interests. Citizens were
already on the losing side when the government forced them to pay taxes.

~~~
olau
Actually, this is orthogonal to governments. There's widespread bribery in the
private sector too, where decisions makers are gifted to persuade them.

To use your phrasing, a capitalistic view of this is that corruption is just
anything that breaks the fairy tale idea that the people who work in the
corporation seek the interests of the company and not their very own private
interests.

You can even see it play out here on Hacker News - people who optimize for
their own career goals at the detriment of the company that pays them to get a
job done.

~~~
Findeton
It's true, but it's also true that many things that are considered
corruption/illegal when you do it for the government, they are not when it's
inside a company. If a business owner hires his nephew, that's not illegal and
many people wouldn't consider it corruption. If a government official appoints
his nephew, that's frowned upon to say the least. But going back to your
argument, if an employee uses his position and gets bribed, of course that's
going at the detriment of the company... but you could also say that if the
company has the right checks and balances he will get caught, and that if the
company had made sure that the interests of the employee were well-aligned
with the company's it wouldn't be a logical step. And that's why some
companies pay so handsomely.

~~~
DailyHN
> government official appoints his nephew, that's frowned upon to say the
> least

What about when a President appoints his daughter and son-in-law?

~~~
usrusr
Transparency, I guess.

(feels like sarcasm just experienced an integer overflow, or perhaps not)

------
Havoc
As a flyer: Do their planes fall out of the sky due to pervasive dysfunctional
corporate culture? Nope.

So yeah not great & but relatively speaking I can't say I particularly care

~~~
kumarvvr
The correct answer is : Eventually.

So yeah, everyone should care.

------
aj7
Someone put a pdf on Drive, please.

~~~
pauljurczak
Google "Airbus ran ‘massive’ bribery scheme to win orders".

------
ksec
The one thing I am happy to see if how many "realist" has suddenly appeared
and not try to deny any wrong doing or non- existent of bribery.

And this happen just when Boeing is in trouble.

------
thefounder
This is really US taking down strategic competitors. It's nothing new. It's
foreign policy, america first, double standard or whatever you want to name
it.

~~~
easytiger
The US with the power of various DAs etc attacked the european banking
industry whilst completely ignoring the american banking industry over almost
nothing in some cases.

------
JohnnyHerz
I find it irritating that this link is paywalled. the news about this topic is
readily available elsewhere.

------
thrower123
Yawn. This is how this works.

------
ggm
Lockheed.
[https://en.wikipedia.org/wiki/Lockheed_bribery_scandals](https://en.wikipedia.org/wiki/Lockheed_bribery_scandals)

~~~
avocado4
Don't try to change the subject.

------
dman
What is the etiquette about posting links that are behind paywalls?

------
agumonkey
journaliasts are bored by Boeing topics?

~~~
bigiain
Airbus might well be paying them to appear so...

~~~
heisenbit
Considering that Boeing is in deep, deep trouble Airbus has stayed very quiet
and deliberately so. Their only major competitor collapsing can't be good for
the strategically. Just imagine Boeing going bankrupt and being split up with
China buying some parts...

~~~
propogandist
US government will never let this happen, as a matter of national security.
They'll bleed and may be bought by a US company, but never international
interests

------
yawaramin
Article is paywalled, what was the timeline of the bribes happening? Would it
be fair to say:

Airbus runs 'massive' bribery scheme -> Airbus wins more orders -> Boeing
feels pressure of losing orders -> Boeing execs pressure engineers to cut
corners -> Boeing aircraft develop various major safety issues

------
trekrich
so not happy with making loads of cash with boeing loosing business they want
to make even more. What happened to just making money, when did they become so
greedy they want to make all the money!

