Congress’ Intel Report Warns About Huawei, ZTE

October 9, 2012

A report from the House Intelligence Committee advised U.S. companies against doing business with Huawei Technologies Company and ZTE because of their ties to the Chinese state, which is known for stealing trade secrets and other sensitive data from American companies.

“We have to be certain that Chinese telecommunication companies working in the United States can be trusted with access to our critical infrastructure,” Chairman and Ranking Member of the House Intelligence Committee, Mike Rogers (R-MI), said.

In February 2011, Huawei published an open letter to the U.S. government denying security concerns with the company and its equipment, requesting a full investigation into its corporate operations. Subsequently, the House Permanent Select Committee on Intelligence began an inquiry into the Chinese telecom sector, focusing on Huawei and ZTE.

Oddly enough, after requesting an investigation into security concerns, neither company was forthcoming with any of the requested information, according to the “Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE.”

“Despite hours of interviews, extensive and repeated document requests, a review of open-source information, and an open hearing with witnesses from both companies, the committee remains unsatisfied with the level of cooperation and candor provided by each company,” according to the report.

In its year-long inquiry, the committee was able to interview former employees of the two companies and amass enough classified and unclassified information to conclude that Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to U.S. telecom networks.

“The U.S. government must pay particular attention to products produced by companies with ties to regimes that present the highest and most advanced espionage threats to the U.S., such as China,” the report said. “Recent cyber-attacks often emanate from China, and even though precise attribution is a perennial challenge, the volume, scale, and sophistication often indicate state involvement.”

The report had several other recommendations, including Huawei and ZTE equipment and component parts be excluded from U.S. government telecom networks. Any mergers or acquisitions of U.S. firms by the two companies should be blocked. Additionally, the Chinese telecom sector should be investigated for unfair trade practices.

“Any bug, beacon, or backdoor put into our critical systems could allow for a catastrophic and devastating domino effect of failures throughout our networks,” Rogers said. “As this report shows, we have serious concerns about Huawei and ZTE, and their connection to the communist government of China. China is known to be the major perpetrator of cyber espionage, and Huawei and ZTE failed to alleviate serious concerns throughout this important investigation. American businesses should use other vendors.”