Secret U.S. Defense Contracts Taken Out Of Lucent-Alcatel Deal

As part of the proposed merger between Lucent and Alcatel, an independent subsidiary will be formed to perform classified research currently done by Lucent for the U.S. military. Much of the work is being done by Lucent's Bell Laboratories, set up in 1925, and the nation's oldest electronics research center.

The subsidiary will be overseen by a board of three American citizens who must be approved by the U.S. government. The move was taken in response to the Congressional outcry that killed the recent deal to have a Dubai-owned company run several U.S. ports.

Lucent's chief executive officer Patricia Russo told a press conference that establishing such a subsidiary "is a structure which is routinely used to protect certain government programs in the course of mergers that involve a non-US parties."

Lucent has declined to say how many employees or how much revenue the subsidiary will have.