Oct. 31 (Bloomberg) -- The Iranian officers who knocked out Saeid Pourheydar’s four front teeth also enlightened the opposition journalist. Held in Evin Prison for weeks following his arrest early last year for protesting, he says, he learned that he was not only fighting the regime, but also companies that armed Tehran with technology to monitor dissidents like him.
Pourheydar, 30, says the power of this enemy became clear as intelligence officers brandished transcripts of his mobile phone calls, e-mails and text messages during his detention. About half the political prisoners he met in jail told him police had tracked their communications and movements through their cell phones, he says.
“This is a commerce of death for the companies that place this technology in the hands of dictatorships,” Pourheydar says.
Even as the pariah state pursued a brutal political crackdown, including arrests and executions surrounding its contested 2009 elections, European companies supplied Iran with location tracking and text-message monitoring equipment that can turn mobile phones into tools for surveillance.
Stockholm-based Ericsson AB, Creativity Software Ltd. of the U.K. and Dublin-based AdaptiveMobile Security Ltd. marketed or provided gear over the past two years that Iran’s law enforcement or state security agencies would have access to, according to more than 100 documents and interviews with more than two dozen technicians and managers who worked on the systems.
Ericsson and Creativity Software offered technology expressly for law enforcement use -- including a location-monitoring product proposed by Ericsson in early 2009 and one sold this year by Creativity, according to the interviews.
Tracking Political Activists
The findings provide a rare window into how companies equip Iran’s surveillance operation.
Iranian authorities routinely use surveillance to round-up and interrogate political activists, according to accounts provided by victims and human rights groups.
The suppliers of this gear are complicit in the human rights abuses for which Iran has been repeatedly condemned, U.S. Senator Mark Kirk says.
“The CEOs of these companies have no ability to look themselves in the mirror,” says Kirk, an Illinois Republican who is sponsoring legislation to tighten sanctions against selling Iran tools for repression. “If they are making such sales, then probably a poor human rights activist is being hooked up to alligator clips because of what they’ve done.”
Whether the technology is destined for police, security services or other intelligence agencies makes little difference, says Mark Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies, a policy group focusing on terrorism.
“There’s very little distinction between the arms of the Iranian regime in terms of the use of technologies to monitor and target dissidents,” he says.
Ericsson, the world’s largest maker of wireless networks, confirmed that in the fourth quarter of 2009 it sold a mobile-positioning center for customer billing purposes to MTN Irancell Telecommunications Services Co., Iran’s second-largest mobile provider.
When Iranian security officers needed to locate a target one night in late 2009, one former Ericsson employee says he got an emergency call to come into the office to fix a glitch in an Ericsson positioning center.
Ericsson says it will continue to maintain the system, but that it decided in October 2010 it would no longer sell any products into Iran due to recent efforts to tighten sanctions.
Enabling Law Enforcement
Early this year, Creativity Software sold a system that enables Iranian law enforcement and security forces to monitor cell phone locations, according to three people familiar with the transaction. With it, police can track a target’s movements every 15 seconds and plot the locations on a map, according to a 19-page company product specification document. Creativity Software confirms that Irancell is a client, but declined to discuss sales of any location-tracking gear for law enforcement purposes, saying it would breach contract confidentiality.
AdaptiveMobile, backed by the investment arm of Intel Corp., proposed a system in partnership with Ericsson for Iran’s largest mobile provider in 2010 that would filter, block and store cell phone text messages, according to two people familiar with the discussions. An Ericsson spokesman confirmed the proposal.
The Irish company still services commercial gear for a similar system it sold in 2008 to Irancell. Police have access to the system, say two former Irancell managers.
Calls for Controls
AdaptiveMobile says its technologies are for fighting spam, viruses and “inappropriate content,” not designed or sold for law enforcement. It says it plans to cease doing business in Iran when its contract is up in late 2012, because continuing in Iran’s current political climate could damage its reputation.
The three European companies continued to do business in Iran amid calls in the U.S. and European Union for greater export controls on such gear. It is legal in most countries to sell this technology to Iran.
And they continued after competitor Nokia Siemens Networks faced an international “No to Nokia” boycott and European parliamentary hearings after its 2008 delivery of communications intercept equipment to Iran.
Exports of these systems are largely unregulated, and industry secrecy can make sales difficult to document, says Dubowitz. The U.S. Government Accountability Office reported in June that it had been unable to identify any companies selling systems to Iran for monitoring or interfering with citizens’ free speech.
Telling the World
Iran’s electronic repression came of age after the country’s June 2009 presidential elections, which sparked international allegations of vote-rigging when Mahmoud Ahmadinejad was declared the winner over three challengers.
In a precursor to this year’s Arab Spring, citizens turned to digital communications such as text messages and social networking to organize demonstrations and tell the world what was happening as the government cracked down. Texting has become the predominant means of digital communications because more than 70 percent of Iranian households have a mobile phone -- four-times greater than the percentage with internet access.
While unrest has shaken or toppled other authoritarian regimes this year, sophisticated monitoring helped mute protests and activism in Iran, according to Mahmood Enayat, director of the Iran Media Program at the University of Pennsylvania. Iran is clearly employing technology to neutralize political opposition, he says.
Last year the government executed approximately 312 people, with more than three dozen killed for the charge of “Moharebeh,” which includes political offenses, according to a U.S. State Department report. Hundreds of people have been convicted by Iranian courts for offenses related to election protests, according to New York-based nonprofit group Human Rights Watch.
The increased brutality is partly a result of the regime’s stepped-up technology to identify and intimidate dissidents, says Eileen Chamberlain Donahoe, the U.S. Ambassador to the United Nations Human Rights Council.
“Their capacity for doing bad things has been enhanced by the use of technology,” she says. “It has made it possible to really target people in ways that we’ve never seen before.”
The Iranian Foreign Ministry did not respond to a faxed request for comment.
Phone as Enemy
Mansoureh Shojaee, a women’s rights activist who fled to Germany after being arrested in December 2009 and jailed for a month, says she concluded that all her communications were under watch. When she planned to meet with fellow activists, police routinely called her or her contacts to say they knew where she was headed, she says.
Interrogators at Tehran’s notorious Evin Prison asked Shojaee, 53, about her acquaintances and displayed call records and transcripts going back several months.
“My mobile phone was my enemy, my laptop was my enemy, my landline was my enemy,” says Shojaee, who turned to using pay phones.
Iran is one of many authoritarian countries across the Mideast and North Africa employing Western surveillance tools for political repression. In Bahrain, for instance, communications monitoring centers sold by Siemens AG, and maintained by Espoo, Finland-based Nokia Siemens Networks and then its divested unit, Trovicor GmbH, have been used to track and arrest activists, according to a Bloomberg News investigation.
After the backlash for its 2008 sale to Iran, NSN expressed regret and noted “credible reports” that the government had used communications technology to suppress dissent. Much of NSN’s gear in Iran has since been swapped out in favor of China’s Huawei Technologies Co., according to Ben Roome, spokesman for NSN.
Huawei spokesman Ross Gan declined in an e-mail response to provide details “due to commercial sensitivities.”
“Any equipment that we provide our customers is strictly for commercial use only and that applies to all of the markets in which we operate around the world,” he said.
Most phone networks around the world are expected to contain law enforcement equipment in order to help track terrorists and criminals and handle emergencies.
A rapidly growing global business, the “lawful interception” and information intelligence market now generates more than $3 billion in annual sales, according to Jerry Lucas, president of McLean, Virginia-based TeleStrategies Inc., which organizes industry trade shows worldwide.
Even when companies sell location and filtering tools for commercial purposes -- from billing and managing network traffic to fighting spam and offering location-based advertising -- they can be vulnerable to misuse by law enforcement.
“Companies can always come up with a legitimate sounding cover, but they will invariably find their products put to evil purposes,” says Andrew Apostolou, senior program manager for Iran at Freedom House, a human rights group.
The Iranian government has asked the phone companies to equip themselves with improved tracking and text message storing and sorting technologies. For example, when government-controlled Mobile Communication Company of Iran sought a new system for handling text messages in early 2010, the operator, known as MCI, mandated that bidders also supply lawful interception technology capable of copying and storing text messages for later retrieval, according to a copy of the request.
Thousands Per Second
Ericsson, which bid on the system, was told by MCI, the country’s largest wireless operator, to partner with AdaptiveMobile for monitoring and filtering technology, according to Ericsson spokesman Fredrik Hallstan. Ericsson didn’t win the contract, he says.
The 3.9 million-euro ($5.5 million) system AdaptiveMobile proposed could handle more than 10,000 messages per second and archive them for a period of 180 days, according to a company proposal. The archive would contain 54 terabytes of storage, according to the document. That’s big enough for all the data gathered by the Hubble Space Telescope over 20 years.
NSN, which was in discussions with MCI about the project, flinched at this. The company had just come under fire for providing a monitoring center to Iran and was formulating new human rights policies. It decided against a formal bid because it worried about how the storage and monitoring features might be used, according to company spokesman Roome.
“Certain capabilities required of the system were not compatible with our human rights policy given the environment in Iran,” he says.
Ericsson’s Location System
Ericsson, the telecommunications giant with $28 billion in sales last year, in 2008 supplied Irancell with its Mobile Positioning System 9.0 for locating subscribers -- a test system that Ericsson says Irancell didn’t buy and could use only on a limited scale.
Ericsson later sold Irancell the positioning-data component of the test system, says Richard Carter, Ericsson’s Istanbul-based head of commercial, sourcing and partnering in the Middle East and the country manager for Iran. It was sold in late 2009, the company confirmed. Known as a Serving Mobile Positioning Centre, the box calculates a person’s position and logs the data.
A former Irancell manager said that all such systems supplied to the mobile operator, including technology from Ericsson, were accessible by law enforcement agencies.
The former Ericsson employee urgently called in to fix the system in late 2009 says he was told that Iranian intelligence officers were attempting to pinpoint the location of someone in the Zahedan area of southeast Iran.
Before the election, on January 24, 2009, Ericsson officials pitched a tracking system specifically for Iran’s security agencies to MCI, according to a seven-page agenda and another document describing the Tehran meeting.
One month earlier, the U.N. General Assembly had expressed “deep concern at serious human rights violations” in Iran.
Law enforcement agents would be able to track subscribers with “easy and friendly” identification of geographic positions on a map, according to Ericsson’s 51-page proposal to MCI, which serves 44 million subscribers.
A list of basic features says maps could reveal the whereabouts of 200,000 MCI mobile-phone subscribers at a time and archive the locations for later analysis.
The system Ericsson proposed offered capabilities for law enforcement referred to as “PoLIS” that would allow the interception of all phone calls occurring in a specific area, among other features, according to a copy of the proposal.
For State Security
Ericsson would have partnered with an Estonian software firm, Reach-U, whose tracking software “is designed for state security agencies,” according to one of the documents in the proposal.
Ericsson’s Carter says the discussions with MCI were preliminary and came to a halt as turmoil swept the country in 2009. He couldn’t find any reference to PoLIS features, he says.
Everything supplied by Ericsson to Iran complied with international trade embargoes, Carter says, adding that their products have been a positive force in the Middle East by promoting communications and commerce. “Ultimately, telecom is a force for good in society,” he says.
MCI did not respond to several requests for comment. Rich Mkhondo, corporate affairs executive for Johannesburg-based MTN Group, which owns 49 percent of Irancell and operates the network, declined to comment. Reach-U sales director Henry Aljand also declined to comment.
Ericsson Employee Tracked
Siavash Fahimi, an Ericsson employee, saw up close how these systems can be abused.
The 27-year-old Iranian worked for Ericsson in Tehran until 2010, installing several different systems.
Sipping tea last month beneath a tangerine tree outside a café in central Turkey, Fahimi recounts how he joined the protests that spilled into the streets in June 2009.
Police arrested him on the outskirts of a rally that December, beating him with fists and a baton and jailing him for 52 days. Security agents interrogated him 14 times, presenting transcripts of text messages plus an elaborate diagram showing all the people he’d called -- and then everyone they’d called.
Victim of Technology
They knew where he was at specific times, producing phone location records. And they pressed him to admit he was a spy, threatening to arrest his friends and family unless he supplied more information.
“It was a tool they used to put pressure on us,” he says. “They wanted us to confess.”
Fahimi, who fled to Turkey after receiving a two-year prison sentence for his role in the protests, can’t be sure that Ericsson technology aided his interrogators, but he is familiar with the capabilities of these types of systems.
“I worked on the technology and I was a victim of the technology, as well,” Fahimi says.
He has no problem with legitimate monitoring that has court authorization. That isn’t the case in Iran, he says.
“They can monitor whoever they want, for their purposes, not for the benefit of society and people.”
Creativity Software, based southwest of London in Kingston upon Thames, announced a deal in August 2009 to sell Irancell commercial customer location services.
Early this year, it sold the mobile phone provider a second system that allows law enforcement to locate and track targets, according to three people familiar with the transaction.
Every 15 Seconds
The system can record a person’s location every 15 seconds -- eight times more frequently than a similar system the company sold in Yemen, according to company documents. A tool called “geofences” triggers an alarm when two targets come in close proximity to each other. The system also stores the data and can generate reports of a person’s movements. A former Creativity Software manager said the Iran system was far more sophisticated than any other systems the company had sold in the Middle East.
Creativity Software held initial conversations with MCI early this year to provide a nearly identical system, according to two former Creativity managers, though the status of those talks is unclear.
Employees at Creativity Software were concerned about selling the technology to Iran, says Venu Gokaram, who worked as a test manager for the company until early this year.
“A lot of people were not happy they were working on a project in Iran,” he says. “They were worried about how the product was going to be used.”
Gokaram says he worked only on commercial products and didn’t share those concerns. He declined to discuss specifics about any technology deployed in Iran.
Creativity Software, which is privately-held and partly funded by London-based venture capital firm MMC Ventures, announced last November that it had made four sales in six months in the Middle East for law enforcement purposes without identifying the mobile operator clients.
Saul Olivares, market development director at Creativity Software, declined to discuss sales of law enforcement technology, but in an e-mail he pointed to its practical benefits, such as locating individuals during disasters, for ambulance crews and in other emergencies.
Jon Coker, investment director at MMC Ventures and a board member at Creativity Software, declined to comment.
Texts as Threats
In addition to tracking people’s whereabouts, the country also sought assistance to monitor the text messages zooming across its networks. Texting had become a threat to the regime, say rights groups.
In 2008, AdaptiveMobile sold Irancell technology to filter, block and store text messages. Text message monitoring was required by security forces, who use the technology for their own purposes, according to two former Irancell managers.
An Adaptive document detailed the system requirements. It would analyze all messages in English, Persian or Arabic for keywords or phrases; store them; and flag those caught by filters for review.
Law enforcement officials requested specific features, according to three people familiar with the discussions. One request was to be able to change the content of messages, said a former senior engineer at Irancell.
Two former Adaptive employees say there were discussions within the company about law enforcement requests as the project came together.
While Adaptive’s executives confirm the Irancell deal and an upgrade to the system to handle more messages, they say it was intended only for commercial purposes. They deny any involvement with Iran security or police.
Law Enforcement Requests
“We are sure our product is not being used in this way,” says AdaptiveMobile CEO Brian Collins.
He says a company search of internal records turned up one or two documents that contain references to law enforcement requests. The Irish company told Irancell that “under no circumstances was our technology to be used for law enforcement purposes,” he says.
Collins says he believed that one of Bloomberg’s sources was a former employee with an axe to grind, and that at least one of the documents in Bloomberg’s possession had been doctored, without being more specific.
Asked if AdaptiveMobile’s systems could scour for political content on activists, Chief Operating Officer Gareth Maclachlan said, “Technically, yes, it is possible.” He says he doubted they would be practical for that purpose.
“The political landscape has changed quite a bit since 2007,” Maclachlan says. “We’re not going to chase any more business there.”
As recently as 2010, AdaptiveMobile attempted to sell a similar product to MCI, the one on which it partnered with Ericsson. Collins and Maclachlan say they were not familiar with details of the proposal.
“This is business that was not pursued,” Collins said later in an e-mail.
Intel Capital, the investment arm of the world’s largest chipmaker, has invested 6 million euros in AdaptiveMobile, which was founded in 2003. Kristof Sehmke, an Intel Capital spokesman, said in a statement that his company strives to comply with all legal requirements.
“Intel will not invest in a company unless they agree to do the same,” he said.
While many countries permit the sale of surveillance technology to Iran, regulators concerned about human rights abuses are beginning to clamp down.
The European Union took aim at Iran’s growing surveillance capabilities in October 2010, enacting new sanctions that include prohibitions for goods that can be used for “internal repression.” The regulations, however, focused mostly on low-tech items, such as vehicles equipped with water cannons and razor barbed wire.
In September, the European Parliament broadened its surveillance concerns beyond Iran, voting for a block on exports of systems if the purchasing country uses the gear “in connection with a violation of human rights.”
U.S. companies have been banned from virtually all trade with Iran since 1995, when President Bill Clinton declared it a threat to national security.
In July 2010, President Barack Obama signed into law new U.S. sanctions that bar federal agencies from doing business with companies that export to Iran any technology specifically used to disrupt, monitor or restrict the speech of Iranians.
‘Blood on Hands’
According to data compiled by Bloomberg, Ericsson signed at least 27 contracts worth $5.25 million with the U.S. government from the start of 2009 to the end of 2010. The data showed no U.S. government business with AdaptiveMobile or Creativity Software.
“If a Western or outside interest ends up cooperating with Iranian authorities, then they come to the table with blood on their hands,” says Kirk, the U.S. senator.
After his arrest early last year, Pourheydar, the opposition journalist, says police accused him of speaking to foreign media such as BBC and Voice of America. Their evidence: unbroadcast mobile phone calls captured, recorded and transcribed, he says. They also had transcripts of his e-mails and text messages. He never learned which companies provided the technology that made it possible.
The beatings that claimed four of his front teeth were nothing compared to the mental torture, he says. Guards one day announced he was to be executed. They forced him to stand on a stool, blindfolded and handcuffed, with a tightened noose around his neck. He remained there, legs trembling, for 25 minutes, until guards called it off and told him they’d be back. After being released to await a prison sentence from the court, Pourheydar fled to Turkey.
One evening last month, in a crowded restaurant in the Turkish city of Nigde, Pourheydar recounted his ordeal while nervously tapping a visitor’s business card on the table and dabbing sweat from his neck and forehead.
“All these companies, which sell telecommunications services and listening devices to Iran, directly have roles in keeping this regime in power,” he says.