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Fed contractor, cell phone maker sold spy system to Iran

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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.

Promotional literature says the monitoring center's "modular architecture allows the monitoring and interception of all types of voice and data communication in all networks, i.e. fixed, mobile, Next Generation Network (NGN) and the Internet. The MC's [monitoring center's] unified view-concept greatly facilitates investigative work and opens completely new and efficient ways to pursue leads."

Ben Roome, a spokesman for NSN, said, "We provide these systems to be used under the applicable laws in their countries and make sure we are abiding by U.N. and [European Union] export regulations and code of conduct. We provided the monitoring center to Irantelecom. We are not going to comment on the use of it. It is there to record lawful intercepts."

But William Daly, a former CIA signal-intelligence officer for the agency's Office of Science and Technology who retired in 2000, said the monitoring center in Iran will be used to "monitor dissidents and those ayatollahs who oppose the Supreme Leader [Ayatollah Ali Khamenei]."

Mr. Daly, who provided technical assistance on surveillance missions for the CIA, said that lawful intercept as a concept was created by the cell-phone industry to provide law enforcement agencies the ability to track criminals and terrorists.

Indeed, the telecommunications industry's own international standards require that data networks allow law enforcement to intercept phone calls, e-mails and other electronic data.

"This functionality is offered by all major mobile and fixed network system vendors," Mr. Roome said. "Such functionality can provide the proper authorities with an important tool for the investigation of serious criminal activities, such as terrorism, child pornography or drug trafficking. The use of such surveillance is based on local legislation and typically overseen by high-level independent government bodies, such as courts."

Mr. Daly said, however, that the technical switches telecommunications companies embed in their systems can easily be abused.

"The concept of 'lawful intercept' came about with the development of cellular phones," he said. "They had no way of monitoring them if it did not go through a landline switch. With [Global System for Mobile communications, or GSM], it is possible to communicate in the cell without going to the switch. This was part of the basic argument for why they developed it. But the real answer is that governments want to know what their people are doing."

Tom Malinowski, Washington advocacy director for Human Rights Watch, said the monitoring center NSN sold to Iran last year should be regulated as though it were "dual-use technology" - items that can have military as well as civilian applications.

"There are a lot of export controls in place in Western countries on technology that might have a dual military purpose," he said. "But there are virtually no restrictions on the export of high-tech equipment that can be used to monitor or control free expression."

When Cisco Systems Inc., an American company, sold China technology to facilitate the state's ability to monitor the Web searches of its citizens, the Commerce Department had to review the export license to make sure Beijing was not obtaining technology it could use to repress Chinese citizens - a requirement for all U.S. exports to China following the 1989 crackdown at Tiananmen Square.

Mr. Roome said he did not consider the Iranian monitoring center to be dual-use technology. Indeed, NSN also provides telecommunications equipment to support the wireless telephone network used by Iranian citizens inside the country, he said.

"We believe that the connectivity we provide brings important benefits to societies through enabling the open sharing of information and enhancing economic prosperity," he said. "We are concerned about human rights and the well-being of people across the globe and have therefore created very detailed ethical guidelines and code of conduct for our operations. These guidelines apply to our own operations and those of our business partners.

"We also recognize the legitimate authority of political decision makers in the global community to determine whether it is appropriate or not to do business in any particular country. We are strongly committed to the highest standards of ethical conduct, and operate in full compliance with all applicable national and international laws."

The Iranian mission to the United Nations did not reply to requests for comment on the issue.

Iranian dissidents reacted with anger to the news about the sale.

Mohsen Sazegara, a founder of Iran's Revolutionary Guards who became a democracy advocate and was arrested in 2003 for his opposition to the Islamic republic, said there were rumors in Iranian opposition circles that the Germans had sold the state powerful new technology that would make their monitoring efforts more effective.

"My first reaction is, 'Wow! Why do they do this?' Don't they know that this will be used against the people of Iran?" said Mr. Sazegara, who now lives in the United States.

"They facilitate a regime which easily violates human rights in Iran and the privacy of the people of Iran. They have facilitated the regime with a high technology that allows them to monitor every student activist, every women's rights activist, every labor activist and every ordinary person."

Hadi Ghaemi, spokesman for the International Campaign for Human Rights in Iran, said 12 women´s rights activists were arrested late last month at a private meeting to celebrate the Persian New Year. He said the raid suggested the state had access to private communications.

"This is an absolute threat to the privacy of all Iranian activists. It puts them in danger of being constantly monitored by the intelligence services, something that we know is already happening," Mr. Ghaemi said.

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