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House Intelligence Committee report blasts Huawei, ZTE as threats to U.S. national security

Ellen Messmer | Oct. 9, 2012
China-based Huawei and ZTE pose a national-security threat to the U.S. because of spying and stealing of data that could be done on behalf of the Chinese government through any network based on vendors' network service provider gear, according to an investigative report issued Monday by the U.S. House Intelligence Committee.

The main argument in the House Committee report is that the Chinese government and its intelligence agencies, already believed to be conducting massive cyber-espionage against the U.S., can call upon Huawei or ZTE to work for China "for malicious purposes under the guise of state security."

The Committee report said Huawei and ZTE object to having the focus on them alone, and the report says this was done because these two companies "are the two largest Chinese-founded, Chinese-owned telecommunications companies seeking to market critical network equipment to the United States."

The report says House Committee staff last February went to Huawei corporate headquarters in Shenzhen, China, to meet with officials there, including: Ken Hu, Huawei's deputy chairman of the board and acting CEO; Evan Bai, vice president of the treasury management office; Charlie Chen, senior vice president in charge of Huawei (U.S.); Jiang Xisheng, secretary of the board; John Suffolk, global security officer; and Rose Hao, export regulator.

In April, Committee staff met in Shenzhen with ZTE executives, too: Zhu Jinyun, senior vice president of U.S. and North American market; Fan Qingfeng, executive vice president of global marketing and sales; Guo Jianjun, legal director; Timothy Steinert, independent director of the board and Alibaba counsel; Ma Xuexing, legal director; Cao Wei and Qian Yu, both with the security and investor relations within the Information Disclosure Office; and John Merrigan, attorney with DLA Piper.

The report says other meetings occurred, but the House Committee did not feel their questions and need for documentation were answered and said answers were sometimes evasive.

The Committee wanted to understand any formal role of the Chinese government or Chinese Communist Party with the companies. The report says it believes Huawei and ZTE "failed to assuage the Committee's significant security concerns presented by their continued expansion in the United States."

The Committee report also makes vague accusations related to what Committee investigators supposedly heard from "industry experts and former and present employees" about the two companies. For instance, the report says it heard from several former employers that Huawei uses "patented material from other firms," though it isn't specific, and that Huawei may be evading licensing requirements related to software applications for its employees.

There are also allegations that Huawei employees visiting from China on tourist or conference visas are working full time in the U.S. for Huawei in violation of U.S. immigration laws, and the House Committee intends to share its information with the Department of Homeland Security. Other allegations concerned supposed fraud and bribery when seeking contracts in the U.S. There are also allegations from employees about supposed discrimination and how it's "difficult if not impossible for any non-Chinese national to be promoted in Huawei offices in the U.S."


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