EXCLUSIVE: Siemens risks losses due to Iran ties

One of the world’s largest engineering firms, Siemens, could lose hundreds of millions of dollars in sales to the Los Angeles Metropolitan Transportation Authority (MTA) because it sold Iran equipment used to spy on dissidents.

California politicians and Iranian human rights advocates say in awarding contracts, officials should take into account the fact that the German company participated in a joint venture with Nokia in 2008 to sell Iran’s telecommunications company a monitoring center that, according to the joint venture’s own promotional literature, can intercept and catalog e-mails, telephone calls and Internet data.

Political pressure because of Iran’s recent crackdown on postelection protesters – as well as the country’s advancing nuclear program – could affect a vote next week on who will supply rail cars for Los Angeles County.

«At a time when the city and the board of supervisors are urging divestment from Iran, it would be hypocritical of our board to make a deal with Siemens or anyone else who is doing business in Iran,» said Richard Katz, a member of the MTA board.

Shirin Ebadi, an Iranian human rights lawyer and winner of the 2003 Nobel Peace Prize, told The Washington Times Thursday that she is urging Los Angeles County not to award Siemens the contract. She also urged Californians to write letters to their local representatives to boycott Siemens.

«I don’t think the City of Los Angeles should award contracts to companies such as Nokia or Siemens who participate in the violation of basic human rights including the right to free speech and privacy,» she wrote in an e-mail. «Just as it is the duty of governments to uphold values and contracts honoring universal human rights, it is as important for companies and large corporations to do the same.»

Saying that Nokia and Siemens participated in censorship in Iran, she added, «If such companies are faced with consequences that effect their ‹bottom line› they will be less enticed to enter in to business agreements with any government attempting to restrict the basic human rights of their people.»

Next week, the Los Angeles MTA board will vote on whether to extend options to an Italian company, Ansaldobreda (AB), to make 100 rail cars for the Los Angeles subway. However, senior MTA officials have been dissatisfied with the Italian company’s performance and Siemens has been considered the strongest other contender.

«Siemens has laid a lot of groundwork that would position them well to compete for the contract if we don’t do the AB deal,» Mr. Katz said.

A Jan. 28 memo from Mike Cannell, the MTA’s general manager for rail operations, and Lonnie Mitchell, MTA’s chief administrative services officer, to the MTA board noted problems with the Italian company.

«Ansaldobreda’s schedule and technical performance under the P2550 contract have not met the requirements of the contract,» the memo said. It said that the rail cars were not delivered on time.

California politicians are acutely aware of the political controversy surrounding Siemens. Los Angeles has one of the largest ethnic Iranian populations outside Iran – a group that has been following closely the crackdown on protests in Iran after disputed June 12 presidential elections there.

Matt Szabo, spokesman for Los Angeles Mayor Antonio Villaraigosa, said the mayor would take into account the business Siemens does with Iran.

«The involvement of Siemens in Iran is something the mayor would weigh very seriously in consideration of MTA contracts,» Mr. Szabo said. «Particularly because he has been working to make sure that L.A.’s investments steer clear of companies that do business with Iran.»

Mr. Villaraigosa appointed three members to the 13-member MTA board and has a vote himself on the body.

(Corrected paragraph:) According to the German advocacy group «Stop the Bomb,» Siemens did a total of $619 million in business with Iran last year, primarily in the infrastructure and energy sector.

A spokeswoman for Siemens AG declined to comment for this story. The Nokia-Siemens venture sold the monitoring center business to another German company earlier this year.

Los Angeles County plans to expand its rail grid in the next few years and to buy $700 million in rail cars, Mr. Katz said. The plan is part of a proposed 30-year, $4 billion project to expand the county’s public transit system.

The contract being voted on July 23 involves 100 rail cars worth about $300 million, Mr. Katz said.

Rep. Brad Sherman, a Democratic representing part of Los Angeles Country, said the MTA board should definitely weigh Siemens› involvement in Iran when voting next week.

«I think there are two issues,» he said. «What is best for L.A. on these trains [and] what is Siemens is doing in Iran and can you trust what they say about this.»

Mr. Sherman said that Siemens is «one of the major companies involved in Iran. They have failed to outline for the world what they would not sell the government of Iran and they are certainly undercutting our efforts to put economic pressure on Iran.»

Jewish groups are joining with Iranian Americans to put pressure on local officials.

«Right now, especially after what happened in the aftermath of the Iranian election in which at least thousands of Iranian citizens are in jeopardy or may have been jailed because of this monitoring technology, it can’t be business as usual,» said Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center in Los Angeles, who is working with the Iranian community in Los Angeles.

«The Twitter revolution in Iran can not stop at the end of a computer, there needs to be changes on the ground. The people of Iran have spoken, they have done their share. Now it is time for the rest of the world to try and take some practical steps that will help them.»

Hadi Ghaemi, spokesman for the International Campaign for Human Rights in Iran, agreed.

«I think the Iranian people inside the country and abroad are extremely concerned that Nokia and Siemens have enabled the Iranian government to carry out the recent crackdown and oppression using their technology,» he said. «They are hitting back with the call for a boycott.»

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