The Swedish telecom giant Telefonaktiebolaget LM Ericsson appears to have placed the company's fate in the hands of recently hired chief compliance officer Laurie Waddy along with chief legal officer Xavier Dedullen.

The two attorneys were the only company employees named as authorized individuals last week in documents that were part of Ericsson's billion-dollar deferred prosecution agreement with the U.S. Department of Justice over violations of the Foreign Corrupt Practices Act. The Stockholm-based company did not respond Monday or Tuesday to Corporate Counsel's request to speak to Waddy or Dedullen.

Ericsson hired Waddy in April to fortify its badly battered compliance program and bring it up to Justice Department standards. Previously, as head of group compliance at Germany-based industrial services firm Bilfinger, she had done the same thing.

Bilfinger was also accused of violating the Foreign Corrupt Practices Act. It brought in Waddy in February 2017 after the Justice Department had extended that company's deferred prosecution agreement for failing to meet certifiable standards. With Waddy's help, Bilfinger finally met the standards and earned dismissal of the charges last December.

At Ericsson, Waddy, a Villanova University Charles Widger School of Law graduate, quickly hired compliance officer Sergio Leal from Bilfinger North America in Houston, where he served as chief compliance officer of four group subsidiaries.

Leal also had worked with Waddy on meeting the Justice Department standards at Bilfinger. The pair will be working with an independent compliance monitor at Ericsson, just as they had done at Bilfinger.

Prosecutors accused Ericsson of bribery and internal controls failures in five countries—China, Djibouti, Indonesia, Kuwait and Vietnam, including the bribery of an unnamed, high-level Djibouti government official.

Attorney Ryan McConnell, founder of the R. McConnell Group in Houston and sometime contributor to Corporate Counsel, said Ericsson might have paid a lesser penalty had it been more cooperative in the beginning. The company received only a 15% reduction in the penalty, according to Justice Department statements, because it didn't produce materials in a timely manner, didn't fully remediate the problems and didn't at first dismiss the guilty employees.

"Although the activity spanned over a dozen years, the lesson for companies is once the government is involved, give them the right documents on time and clean up the mess," said McConnell, a former federal prosecutor.

"Fortunately for the company and its shareholders, the compliance team now involved is the same group (Waddy and Leal) that worked on the Bilfinger matter. Both are top-notch and recognized leaders in the ethics and compliance space," he added.

The company did eventually replace the wrongdoers. Since 2016 it has replaced every top executive, including the chief legal officer when it hired Dedullen in 2017 and removed about 50 other employees involved in the misconduct.

Under the agreement with Justice, the company must assign responsibility to one or more senior corporate executives to implement and oversee its anti-corruption compliance code, policies and procedures.

The document says, "Such corporate official(s) shall have the authority to report directly to independent monitoring bodies, including internal audit, the company's board of directors, or any appropriate committee of the board of directors, and shall have an adequate level of autonomy from management as well as sufficient resources and authority to maintain such autonomy." Presumably that is Waddy.

The document also states that the company "agrees to modify its existing compliance program, including internal controls, compliance policies, and procedures in order to ensure that it maintains: (a) an effective system of internal accounting controls designed to ensure the making and keeping of fair and accurate books, records, and accounts; and (b) a rigorous anti-corruption compliance program that incorporates relevant internal accounting controls, as well as policies and procedures designed to effectively detect and deter violations of the FCPA and other applicable anti-corruption laws." An eight-page addendum spells out exactly what the Justice Department expects from Ericsson.

The agreement was signed by Dedullen and by Cheryl Scarboro, the Simpson Thacher & Bartlett lawyer who represented the company in negotiations. The Ericsson board had authorized both Dedullen and Waddy individually to execute the agreement.

Dedullen and Scarboro also signed the plea agreement between the Justice Department and an Ericsson subsidiary in Egypt, which had handled the bribe to the Djibouti official.

The $1.06 billion Ericsson settlement appears to be the second-largest FCPA settlement ever, behind only the $1.78 billion deal with Brazil's Petrobras in 2018.