Alcatel SA

Alcatel, headquartered in France, has significant operations in three terrorist-sponsoring countries: Iran, Libya and Sudan.  It likewise carried out major fiber optics contracts for Saddam Hussein prior to his overthow.  The total value of the company’s operations in terrorist-sponsoring states over the past five years is more than $300 million. 

Among its activities in Iran that have relevance to Tehran’s military and terrorism-related activities are contracts signed with state-controlled Iranian companies to provide data transmission and switching network capabilities.  These contracts have reportedly included the provision of hardware, software, technologies and training to Iranian companies.  It likewise is installing an undersea telecommunications cable in the country.  Most of its activities in Iran are undertaken with state-owned partners.¹ 

Prior to the Iraq war, Alcatel was reported to have significantly upgraded the Saddam Hussein regime’s fiber optic infrastructure.  Alcatel undertook those operations despite the publicly stated concerns of the U.S. government that the project could advance Iraqi military capabilities — and potentially cost American lives.²  In Libya and Sudan, the company is currently involved in similar telecommunications projects ranging from upgrading networks to the installment of underwater fiber optic cables.³

Alcatel’s activities place it on the "Dirty Dozen" list for the following reasons: 

• Advanced Technology: As a world leader in the telecommunications sector, Alcatel is undertaking technologically-advanced projects in three terrorist-sponsoring states.  As evidenced by the company’s activities in Iraq, these types of projects can introduce technology that can have military purposes.  The likelihood that dual-use technology is diverted to nefarious purposes is increased when a company, as is the case with Alcatel, contracts with state-owned companies.
• Revenues: Alcatel is involved in projects totaling over $300 million in terrorist-sponsoring states.  Not only does this create government revenues, but it also serves an engine for broader economic growth.
• Moral and Political Cover:  When leading global companies such as Alcatel partner with terrorist-sponsoring states, it sends a clear message to these governments: Sponsoring terrorism is not a concern as long as there are corporate profits to be made.  This message undermines U.S. sanctions and international diplomatic efforts.

Alcatel sparked controversy with its merger with U.S. communications giant Lucent, who provides similar communications services to the U.S. Government. Among the services provided to government agencies is a communications network for the Defense Advanced Research Projects Agency (DARPA) and other classified government contracts. Although the company stated that it will move government contracts into one of its subsidiary companies to address security concerns, House Armed Services Committee Chairman Duncan Hunter still voiced concern. In a letter to President Bush he stated, "I am concerned about potential transfers of technology or sensitive information to other countries with which Alcatel has business dealings, which have included Burma, China, Iran, North Korea, Sudan and Syria."

Despite an investigation by the Committee on Foreign Investment in the United States (CFIUS) and Chairman Hunter’s objections, the merger was approved and completed on November 30, 2006.⁴ Despite new CEO Patricia Russo’s claim that she will not conduct business with Iran in accordance with the Iran-Libya Sanctions act, there talk of the formation of an Alcatel-Lucent subsidiary to maintain Alcatel’s work in Iran.⁵

1. Alcatel Company Website, 2002; and Modern Power System, April, 2000.

2. Washington Post, 9/5/01.

3.  Al Bawaba, 12/18/02; and Saudi Economic Survey, 7/10/02.

4. "Lucent-Alcatel execs set to testify before House committee." Market Watch, Inc. November 13, 2006.

5. Reuters (published on ZDNet India) December 2, 2006.  >.