The Dirty Dozen #1: Seimens AG

Siemens AG of Germany, one of the world’s leading telecommunications companies, has long had significant operations in four terrorist-sponsoring states: Iran, Sudan, Syria and Saddam Hussein’s Iraq.  These ties represent significant infrastructure projects, whose values total hundreds of millions of dollars.

Siemens has extensive ties to Iran via direct operations in the country and through the operations of a number of corporate subsidiaries, including Iranian subsidiaries.  Its projects in the country include development of a cell phone infrastructure and upgrade projects on the country’s fixed line network.  The company is also heavily involved in Iran’s power industry.  Siemens has provided equipment and technology in carrying out these projects.1 Recently Siemens signed a $570 million deal with Iran to build 150 railroad locomotives, increasing the number of locomotives in the country by nearly 50 percent.2

Siemens ties to pre-war Iraq were particularly notorious thanks to its sale to Saddam Hussein’s regime of six devices known as lithotripters. While these machines were purchased under the guise of using them for medical purposes (i.e., to smash kidney stones), when the electric switches that power them are strung together, they can be used as detonators for a nuclear weapon.  It was not until Iraq ordered numerous replacement switches, however, that the worrisome dual-use nature of this component became public knowledge.3

Siemens also has extensive ties to Sudan and Syria.  In Sudan, the company is involved in the country’s power generation industry and in Syria, Siemens has helped construct the country’s wireless phone system.4

In a related development, Siemens has recently undergone a probe after suspiscions of a massive overseas slush fund were uncovered. These funds were allegedly used to bribe officials and leaders in other countries in order to secure contracts. Suspected contractees included the Greek interior officials in charge of the 2004 Olympic games and the regime of the fomer Nigerian dictator Sani Abacha. Transparency International, a global bribery watchdog group, has threatened to end Siemens’ membership from the group pending the probe’s results.5

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

• Advanced Technology: Siemens’ work in the telecommunications and power generation industries of these countries involves advanced technology and equipment.  Siemens’ high-tech projects often introduce into terrorist-sponsoring and WMD-proliferating states technology that can have real military value.  The likelihood that dual-use technology will be diverted to nefarious purposes is increased when a company contracts with state-owned companies.  Such partnerships are common when foreign companies, such as Siemens, invest in rogue states.
• Revenues: Siemens is involved in large-scale projects in these countries totaling hundreds of millions of dollars.  Not only does this create revenues for the terrorist-sponsoring government in question.  It also serves as an engine for broader economic growth.
• Moral and Political Cover:  When leading global companies such as Siemens AG 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. It disregards the human rights issues caused by its customers, as is evident with its deals with Sudan and former Nigerian Dictators, and ignores standard business practices through the use of bribes. Its message undermines U.S. sanctions and international diplomatic efforts to bring change to these countries.

UPDATE: On Janaury 22nd, 2007 Siemens announced it was pulling out of Sudan within six months. Siemens though has no plans to stop doing business with other state sponsors of terrorism such as Iran. DivestTerror.org will continue to monitor Siemen’s actions to see if they still merit being on the Dirty Dozen list.

1. M2 Presswire, 7/15/02; Middle East Economic News Digest, 6/28/02; MEED, 12/7/01; MEED Weekly Special Report: Germany: Siemens, 12/7/01; and AFX European Focus, 11/27/00.

2. Middle East Times, 11/14/06. <https://www.metimes.com/storyview.php?StoryID=20061114-095520-1324r>

3. The Times, 10/29/02.

4. Company Website, 2/02; Financial Times, 4/1/01; and Gulf News, 8/14/01.

5. "Transparency International threatens to end Siemens’ membership," Agence France Presse, 12/7/06.