Fed contractor, cell phone maker sold spy system to Iran

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By Eli Lake

Two European companies — a major contractor to the U.S. government and a top cell-phone equipment maker — last year installed an electronic surveillance system for Iran that human rights advocates and intelligence experts say can help Iran target dissidents.

Nokia Siemens Networks (NSN), a joint venture between the Finnish cell-phone giant Nokia and German powerhouse Siemens, delivered what is known as a monitoring center to Irantelecom, Iran's state-owned telephone company.

A spokesman for NSN said the servers were sold for "lawful intercept functionality," a technical term used by the cell-phone industry to refer to law enforcement's ability to tap phones, read e-mails and surveil electronic data on communications networks.

In Iran, a country that frequently jails dissidents and where regime opponents rely heavily on Web-based communication with the outside world, a monitoring center that can archive these intercepts could provide a valuable tool to intensify repression.

Lily Mazaheri, a human rights and immigration lawyer who represents high-profile Iranian dissidents, said she had suspected that the government had increased its capability to monitor its perceived enemies.

Recently, one of her clients was arrested because of instant messaging he had participated in with Ms. Mazaheri, she said.

"He told me he had received a call from the Ministry of Intelligence, and this guy when he went to the interrogation, they put in front of him printed copies of his chats with me. He said he was dumbfounded, and he was sent to prison."

The sale also highlights a rift between the government of Germany, which has endorsed diplomatic and economic pressure on Iran to curb its nuclear program, and German corporations that continue to export sensitive technology to Iran. On March 31, NSN sold the portion of its business that services the monitoring center to a private German holding company called Perusa Partners Fund LLP.

Since 2005, Siemens had done more than $900 million worth of business with the U.S. government and employs about 70,000 people in the United States. Nokia is one of the leading mobile handset providers in the United States.

A spokeswoman for Siemens AG, Elizabeth Cho, said that Siemens "retains only a non-controlling financial interest in NSN, with the day-to-day operations residing with Nokia." She added that Siemens has been "exiting out of the telecom business" throughout the last five years.