From Africa to the UN: The Corruption Controversies Rocking Thales

Thales, the French defense group known for its high-tech engineering solutions and defense systems, has been making headlines lately for all the wrong reasons. The multinational, which boasts a global presence and a long history dating back over a century, has been embroiled in a series of corruption scandals that have cast a shadow over its reputation and operations.

From Africa to the United Nations, the controversies continue to pile up for Thales, leaving many to question the company’s ethics and practices.

In this blog article, we take a deep dive into the corruption scandals that have plagued Thales to date, providing a comprehensive overview of the company’s troubled history. The information contained in this article raises serious concerns about Thales and the wider implications of corruption in the global business landscape.

Thales DIS Corruption in Africa

The latest scandal involving Gemalto (now renamed Thales DIS), was revealed this week by the French national financial prosecutor’s office (PNF) as reported by Mediapart.

Gemalto, which was acquired by Thales in 2019, specializes in digital security. The investigation reportedly involves allegations of corruption in connection with Gemalto’s business activities in Africa. This judicial investigation was opened on June 13, 2022 for bribery of a foreign public official in an organized gang, aggravated laundering of bribery of a foreign public official and association of criminals.

According to reports, Gemalto is accused of bribing officials in several African countries in exchange for favorable treatment in government contracts. The company allegedly paid off officials to secure contracts for the sale of its biometric identification systems, as well as to ensure the smooth operation of these systems in the countries where they were deployed.

The case arose from a tip from Tracfin, Bercy’s financial intelligence unit, which gave rise to the opening of a preliminary investigation, relating to government contracts concluded by Thales DIS, with several African states, confirmed the PNF.

According to Mediapart , the investigation “covers about ten government contracts (identity cards, electoral cards, license plates) won by Gemalto between 2015 and the beginning of 2019″ , in particular on “commissions affected, to win these contracts, through several intermediaries .

The investigations would relate in particular to a contract of more than 46 million dollars won in 2016 from the Independent National Electoral Commission (CENI) of the Democratic Republic of Congo. The investigations would also surround another contract won in 2017 in Senegal around driving licenses and license plates, as well as an Israeli intermediary who would have negotiated two contracts on behalf of Gemalto in Cameroon and another in Senegal.

The scandal has had a significant impact on Gemalto, which is now facing legal proceedings and potential penalties as a result of the allegations. The controversy has also affected Thales, which is already facing increased scrutiny over its ethics and practices in other matters.

The United Nations Scandal

Another major corruption scandal involving Thales took place in the United Nations. The multinational company is accused of introducing a “mole” into the UN to bribe officials and secure contracts for the sale of its high-tech defense systems.

According to reports by Mediapart, Thales paid a significant amount of money to a UN official to act as a “mole” and secure contracts for the company. The official was allegedly tasked with bribing other UN officials to ensure that Thales was awarded lucrative contracts for its defense systems. The scandal was uncovered by a joint investigation by the UN and international law enforcement agencies.

An investigation for suspicion of “corruption” and “influence peddling” targeting the technology and defense group was opened at the end of 2020 in France, said the PNF. The investigation focuses on the transfer of a former employee of the French multinational for a position at the UN, one of the customers of Thales.

According to Letter A, a former export manager of the group (now turned whistleblower) “suspects this employee (…) of having joined the UN thanks to his reservist cap while retaining his remuneration paid by Thales , without informing the UN, his new employer” in 2017.

“Then, after applying for a new position at the United Nations in 2018, he would have asked for a nest egg in return for the information useful to the business of Thales that he would bring once employed at the UN”,  reported Mediapart, citing a letter from this former employee in March 2019 in a complaint addressed to the group’s ethics department.

Thales classified the alert made by the former executive, who was dismissed in May 2020. It is important to note on a parallel note, that the former employee in question has also won this week a landmark victory in court, potentially securing her rapid reinstatement within the company.

The former executive had taken legal action against the company after being subjected to retaliation by Thales. The ruling was seen as a major victory for whistleblowers and a significant step forward in the fight against corruption in the corporate sector in France.

However the cross-border investigations into Thales’ practices at the UN sparked a larger debate about corruption in the procurement process and the need for stronger measures to prevent such practices.

The United Nations has long been known for its rigorous procurement process, but the presence of a mole within the organization raises questions about the effectiveness of these measures in preventing corruption.

Notable corruption allegations around the world

Thales has also been implicated in corruption allegations involving former South African President Jacob Zuma. The company is accused of bribing the former president to secure contracts for the sale of its defense systems in South Africa.

The corruption allegations involving former South African President Zuma and Thales date back to the 1990s, when Thales was accused of paying bribes to secure a defense contract with the South African government. The allegations were part of a larger corruption scandal in South Africa that implicated many government officials and business leaders. Thales has maintained its innocence in the matter, and the case has been the subject of ongoing legal proceedings.

In addition, Thales has also been implicated in several other corruption scandals over the years.

One of the most significant scandals that Thales was involved in was the Greece submarine scandal. The scandal involved allegations of bribery in connection with the sale of submarines to the Greek government. According to reports, Thales was accused of paying bribes to Greek officials to secure the sale of submarines in the 1990s. In 2000, the company was fined for its role in the scandal, but the case has continued to attract controversy in the years since.

Another corruption scandal that Thales was implicated in was the RADARSAT-2 scandal, which involved allegations of bribery in connection with the sale of RADARSAT-2 to China. Thales was accused of paying bribes to Chinese officials to secure the sale of the satellite, which was used for military and civilian purposes. The company was eventually cleared of any wrongdoing in the case, but the allegations have continued to tarnish Thales’ reputation.

Thales has also faced allegations of bribery in connection with the sale of defense equipment in Saudi Arabia. According to reports, the company was accused of paying bribes to Saudi officials to secure the sale of military equipment, including helicopters and radar systems. The case was eventually dismissed, but the allegations of bribery continued to be a source of concern for Thales.

In 2019, Thales carried out an anti-corruption campaign in the Gulf region, following the Barakat affair. The Barakat affair involved allegations of corruption and bribery in the UAE, where Thales was accused of paying bribes to executives in the country to secure defense contracts. In response to the allegations, Thales launched an internal investigation and fired several executives who were implicated in the corruption. The company also implemented new anti-corruption measures and increased transparency in its business dealings in the Gulf region.

Finally, Thales has been the subject of investigations into alleged corruption in India. The company has faced allegations of paying bribes to Indian officials in connection with the sale of defense equipment, including the Scorpene submarines. The case is ongoing, and Thales has denied any wrongdoing in connection with the allegations.

Some Thoughts on the Alleged Corruption at Thales

It is important to note that in some of these cases, the allegations against Thales have been the subject of ongoing investigations and legal proceedings, and the company has maintained its innocence in some of these matters. However, the repeated incidents of corruption and bribery allegations raise questions about the company’s commitment to ethical conduct and business practices.

Whilst Thales’s actions in response to the Barakat affair demonstrate the company’s willingness to adopt ethical business practices and stamp out corruption within the organization, it is undeniable the company’s reputation has taken a hit, and the successive scandals have raised serious questions about Thales’ commitment to transparency and accountability in its business dealings.

The defense and aerospace industries are among the most heavily regulated industries in the world, with strict regulations and oversight in place to prevent corruption and promote transparency. The repeated scandals involving Thales highlight the need for increased transparency and accountability in these industries, as well as the importance of maintaining the integrity of international organizations like the United Nations.



%d bloggers like this: