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City and MTA officials concerned about firms with business ties to Iran

July 17, 2009 |  7:06 pm

Officials for the Los Angeles County Metropolitan Transportation Authority said today that they were concerned about the Iranian business connections of Siemens Corp., a potential contender for lucrative contracts to build light rail and subway cars for the agency.

Siemens, which owns Siemens Transportation Systems Inc., partnered with Nokia last year to provide TCI, Iran’s telecommunications company, the technology to monitor voice calls on the country’s fixed and mobile telephone networks. Though such systems are legal and in place around the world, a controversy has erupted over whether the technology has provided the Iranian government with the capability to eavesdrop on dissidents.

Los Angeles Mayor Antonio Villaraigosa, who is a vice chair of the MTA board, and MTA board member Richard Katz said they were concerned about Siemens’ ties to Iran considering the widespread civil unrest that has followed the reelection of President Mahmoud Ahmadinejad.

“The mayor has been working to ensure that the city divests from any company that does business with Iran,” said Matt Szabo, a spokesman for Villaraigosa. “So obviously any connection Siemens or any other potential contractor has to Iran would be of great concern to the mayor when considering a contract.”

Katz said he had the same concerns. He noted that members of Congress are considering legislation to prevent federal contracts from going to companies doing business in that country.

But the Iranian connection may get more complicated for the MTA beyond the ties with Siemens Corp. A potential competitor of Siemens Transportation Systems Inc. for MTA contracts is AnsaldoBreda, an Italian firm that is trying to win a $300-million MTA contract to build 100 light rail cars.

The MTA board is set to decide next week whether to award the job to Breda or rebid the contract because the company has been late delivering cars and has failed to meet MTA specifications.

However, Breda is owned by Finmeccanica, a conglomerate of defense, aerospace, energy and transportation companies, which has deals to provide Iran with 44 gas turbines through its subsidiary Ansaldo Energia. The turbines have the capability to generate about 20% of Iran’s energy production.

Whether MTA should also avoid doing business with AnsaldoBreda “is a good question,” Katz said.

-- Dan Weikel

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