Imagine you were running a small business, and you had a potential employee in front of you. Let’s say the prospect was in line for a very important position, one that required a significant salary and was responsible for people’s lives. You’d want to make sure you had a really good employee, right? Not someone with a criminal record that included financial wrongdoing, including against your own company?
Well, apparently, someone in Washington doesn’t agree. Because right now, the European French-based company Airbus may actually get a billion dollar military contract with the U.S. despite its significant history of wrongdoing and ties to the Chinese government.
In January 2020, the U.S. government assessed criminal penalties against Airbus of more than $3.9 billion due to foreign bribery. In an agreement for deferred prosecution, the DOJ said that the corporation had “scheme[d] 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.” It was the largest global foreign bribery resolution ever.
“Today, Airbus has admitted to a years-long campaign of corruption around the world, ” said U.S. Attorney Jessie K. Liu of the District of Columbia. “Through bribes, Airbus allowed rampant corruption to invade the U.S. system.” The company purposely failed “to disclose political contributions, commissions or fees to the U.S. government, as required under the ITAR” and “falsely reported information about their conduct to the U.S. government for more than five years in order to gain valuable licenses to export U.S. military technology,” said the DOJ.
The corporation paid bribes to China and other countries and concealed those bribes. Airbus bribed “Chinese government officials in connection with the approval of certain agreements associated with the purchase and sale of Airbus aircrafts to state-owned and state-controlled Chinese airlines.” Airbus works with state-owned companies like the Aviation Industry Corporation of China (AVIC), and in 2009 outsourced some of its labor to China at a plant in Tianjin.
Given these lies and bribes, why would the U.S. trust Airbus with sensitive U.S. defense technology? It’s not like China has a great history of respecting other nations’ technology rights.
The U.S. isn’t alone in finding major wrongdoing against Airbus. The World Trade Organization determined that Airbus illegally accepted subsidies from the European Union in recent years. This allowed it to submit artificially lower bids for projects, including U.S. projects, which if won, take away American jobs. After the U.S. complained about the illegal subsidies, the WTO adjudicated the dispute and awarded the U.S. the largest arbitration reward in its history, nearly $7.5 billion annually.
The Office of the U.S. Trade Representative said about the decision, which was made in November 2019, that “massive EU corporate welfare has cost American aerospace companies hundreds of billions of dollars in lost revenue over the nearly 15 years of litigation.”
The EU retaliated by filing a complaint with the WTO against the U.S. over research and development in its own airline manufacturing. The WTO, which is controlled by international interests, naturally dinged the U.S. over it, but on a much smaller scale, allowing the EU to impose tariffs of only $4.5 billion.
These are different situations, since the EU is using the subsidies from 27 countries to gang up on the U.S., whereas the U.S. is supporting its own national defense. Why can’t we support our own national defense? It’s apples and oranges. The EU has a larger GDP than the U.S., giving it an advantage here, which is in part why the Trump administration imposed tariffs against the conglomerate. Under the Biden administration, the U.S. and the EU agreed to each temporarily suspend the tariffs, but who knows how long that will last.
Finally, an Airbus subsidiary (which has gone out of business), GPT Special Project Management Ltd, pleaded guilty in April to corruption involving contracts to provide military communications services for the Saudi Arabian National Guard, and was fined over $30 million by a UK court.
The facts are simple, and so should the U.S. government’s conclusions about Airbus: This is not a company we want taking taxpayer dollars, having access to critical defense technology and knowledge, or responsibility for troops’ lives. It doesn’t have Americans’ interests at heart, it’s a cutthroat competitor that has no qualms about allying with our enemies like China. It’s time to block Airbus from any military contracts until it cleans up its act.
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