Bombardier employee detained in Sweden

Megadeal cited in bribery charges

Bombardier Inc. said it is cooperating with authorities and is committed to “high ethical standards” after police detained an employee of the Swedish office of its transportation division on bribery charges.

Prosecutors with Sweden’s anti-corruption unit announced Friday they had arrested Evgeny Pavlov, a 37-year-old Russian national, in connection with a 2013 railway procurement deal by a Bombardier-led consortium in Azerbaijan. The consortium won a US$288 million order to design, manufacture and install a double-track line on the Kars-Baku corridor connecting Asia and Europe.

Azerbaijan is a former member of the Soviet Union bordering Georgia, Armenia, Iran and Russia. It is one of the world’s lowest-ranking countries on Transparency International’s Corruption Perceptions Index at 123rd out of 176 nations.

In the statement, the Swedish prosecutors said they had spoken with other Bombardier employees and obtained email evidence following a raid on the company’s office in October. “Despite the fact that Bombardier was in fifth place in terms of price, they won the 2013 tender when competitors that had offered a better price were disqualified by the rail authority in Azerbaijan,” the prosecutors said.

Bombardier Transportation spokesman Claas Belling confirmed Swedish police had detained the employee and questioned others while cautioning that the allegations have not been proven. “As always, we are committed to operating in full compliance with all legal rules and requirements and our own high ethical standards,” the statement said.

Marc Tasse, a professor at the University of Ottawa’s Telfer School of Management and senior instructor with the Canadian Centre of Excellence for Anti-Corruption, said Bombardier will have to provide proof of that if it wants to avoid being investigated as well. He said many jurisdictions require companies to demonstrate they have well-documented compliance programs that the culpable employee subverted without the knowledge of management.