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Are Telecom Companies Helping China Spy on America?

Intelligence leaders want to know before two giants of the industry reach any further into the U.S.

by
Bridget Johnson

Bio

June 13, 2012 - 6:31 pm
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The letters request details of the companies’ meetings with Chinese government ministries and officials over the past five years, including the Ministry of State Security and Ministry of National Defense.

The correspondence to ZTE notes that the company received a nice deal from the China Development Bank in 2009 — a $15 billion credit line even though the firm’s annual revenue was $8.4 billion, and three years without interest payments. “How was ZTE able to receive a favorable bank loan in excess of annual revenue?” the lawmakers ask. “Please explain in detail how ZTE operates as an ‘intermediary & bridge between operators and financial institutions’ when arranging customer financing with Chinese banks.”

They also ask the company for details on its “surprising statement” in a May 14 submission to the committee “that it has no knowledge of any cybersecurity incidents.”

Among the requests are also questions about whether the company has been directed to do something by the communist government, about the company’s state-party roots, and about the breakdown of ZTE employees within the U.S including national origin.

Huawei received similar questions about connections to the state, including about the company’s “Party Committee” that officials haven’t described to the committee in any sort of detail.

Rogers and Ruppersberger asked for full details on every contract for goods or services provided in the U.S. in which Huawei or one of its subsidiaries is a party (including white-label equipment rebranded by communications carriers), and how the company plans on competing in the U.S. if not, as Huawei officials claimed, by cheaper prices.

“We appreciated the candid discussion about the investigation and the opportunity for continued follow-up and dialogue. As I told these companies directly, the security of our telecommunications infrastructure and networks is one of my biggest concerns,” Ruppersberger said today.

“While I appreciate the need for international competition, it is my responsibility to look critically at foreign companies, especially those whose government continues to conduct cyber espionage against U.S. enterprises.”

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Bridget Johnson is a career journalist whose news articles and opinion columns have run in dozens of news outlets across the globe. Bridget first came to Washington to be online editor at The Hill, where she wrote The World from The Hill column on foreign policy. Previously she was an opinion writer and editorial board member at the Rocky Mountain News and nation/world news columnist at the Los Angeles Daily News. She has contributed to USA Today, The Wall Street Journal, National Review Online, Politico and more, and has myriad television and radio credits as a commentator. Bridget is Washington Editor for PJ Media.
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