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Wray 'Very Concerned' About Threat from Chinese Telecom Firms After ZTE Deal

FBI Director Christopher Wray testifies before a House Judiciary Committee hearing on June 28, 2018. (AP Photo/Andrew Harnik)

FBI Director Christopher Wray warned about “letting the fox in the henhouse” with overtures to Chinese telecommunications companies

The Trump administration struck a June settlement with ZTE to end a U.S. ban on domestic companies selling components to the Chinese telecommunications giant.

The Commerce Department put the deal to pull ZTE out from under the weight of sanctions into motion after Trump in May vowed to help the telecom company, which has been the subject of equipment bans for suspected espionage as well as a violator of Iran and North Korea sanctions, get back on its feet.

Top officials from the CIA, NSA, FBI and the Defense Intelligence Agency testified at a Senate Intelligence Committee hearing in February that smartphones made by Chinese tech companies Huawei or ZTE posed a security risk. The Pentagon recently banned U.S. bases from selling Huawei and ZTE devices in retail stores, as they “may pose an unacceptable risk to the department’s personnel, information and mission.”

In April, Commerce Secretary Wilbur Ross announced that his department’s Bureau of Industry and Security imposed a denial of export privileges against ZTE. The company agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion in March 2017 after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice. This year, the Commerce Department discovered that ZTE made false statements to BIS during the settlement period and during the 2017 probationary period.

Also, in 2016, ZTE was found to have been one of the manufacturers behind carefully concealed backdoor spyware placed on more than 700 million Android phones.

On May 13, Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

Peter Lichtenbaum, a former assistant secretary for export administration at the Commerce Department, had received an offer Aug. 15 to lead the compliance team for the deal, but Commerce Secretary Wilbur Ross rescinded the offer after learning that Lichtenbaum had joined other national security officials on an August 2016 letter stating they would not support Donald Trump’s campaign as they regarded him as unfit to lead.

In an interview with CBS This Morning aired Thursday, Wray said that China’s goal “is to take what it can and become essentially self-sufficient and put American businesses out of business.”

Replacing America as the top global superpower is “their goal and they’re pretty open about it,” he added.

“Anytime you start talking about foreign companies that are beholden to foreign governments that don’t share our values and our dedication to the rule of law… it enables them to conduct economic espionage. It enables them to conduct different kinds of cyberattacks. It enables them to steal information in a variety of ways,” the FBI director continued.

Asked if Trump was wrong on throwing ZTE an economic lifeline, Wray replied, “I continue to be very concerned, and I think the intelligence community continues to be very concerned about the threat to our telecommunications infrastructure presented by some of the kinds of companies that are beholden to foreign governments that don’t share our value.”

“And the idea of letting the fox in the henhouse is something that I think people need to be really, really careful about before we find out that we’re going to regret it,” he added.

Wray also defended the FBI, which has come under sharp criticism from president, and was asked if Trump’s attacks have taken a toll on the Bureau.

“I’ll tell you what I see. I see 37,000 men and women who get up every day trying to keep 325 million American people safe. I see people who work their tails off in that effort, who are people of character, of courage, of professionalism and diligence,” Wray said. “And we do thousands and thousands of investigations every year. I think about the agents that I swear in at Quantico several times a year, who compete like heck to be accepted into the ranks of the FBI… I could give you example after example, that’s the FBI that I see. That’s the real FBI and that’s what we’re about.”