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Opposing Views on Congress’ Claims Huawei Technologies Enables Chinese Spying

October 9, 2012 at 12:00 AM EST
Jeffrey Brown discusses the House Intelligence Committee's report with Rep. Dutch Ruppersberger, D-Md., which suggests Chinese telecoms pose a national security threat. Then Brown talks to Huawei Technologies spokesman William Plummer who refutes any claims of an inappropriate relationship between Huawei and China's government.
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JEFFREY BROWN: The congressional report was a bipartisan effort. And we hear first on this issue from the ranking member of the House Intelligence Committee, Maryland Congressman Dutch Ruppersberger.

Congressman, I want to fill in some of the details here. Did your investigation find specific evidence that these companies have engaged in spying or espionage, or is it more that they might do something in the future?

REP. DUTCH RUPPERSBERGER, D-Md.: No, our investigation which started a year ago, a bipartisan investigation, we looked at the connection between these two major companies, and we also looked at their connection to the Chinese government.

We — I personally met with the chairman of Huawei, the founder of Huawei, in Hong Kong and questioned him and also representatives from ZTE. We asked them hard questions. And they refused to give us specific answers.

One of the responses to our question and to our recommendation for them to give us these answers was that: We cannot give you these answers pursuant to our Chinese law at this time.

Our concern really was a national security concern.

But it’s also a concern about competition. You know, we do not want a — the Chinese government to have the ability to spy on Americans who might be Huawei or ZTE customers. We do not want them to be able to spy on our businesses.

And let me just say this. Last year, the United States — pursuant to Cyber Command, the United States lost over $300 billion of trade secrets. That’s $300 billion of trade secrets as a result of cyber-attacks.

JEFFREY BROWN: But I’m…

DUTCH RUPPERSBERGER: Yes, go ahead.

JEFFREY BROWN: But excuse me. But excuse me. But is there — is it the lack of evidence — I mean, the lack of them being clear with you, or is there evidence that they might do something?

DUTCH RUPPERSBERGER: No, no, no. No, we also have evidence.

We have evidence that the Chinese government have been doing it. As far as Huawei is concerned, we have gotten a lot of data and information about Huawei, but most of our concern is the relationship between their government.

JEFFREY BROWN: Now, you heard that the company pushed back pretty hard after this report came out. And they accused this — they said little more than an exercise in China bashing.

DUTCH RUPPERSBERGER: Well, the first thing, we’re not masquerading at all national security to do any Chinese bashing. That’s not what we do as Americans.

And my message basically and my message to the chairman of Huawei was that if you want to do business in the United States, the first thing you do is disclose the information that we need, including your financial information.

We want to make sure that you do not have a connection or the Chinese government doesn’t have control over what you can do with our customers in the United States.

You know, Chinese government is a communist government. And if the Chinese government demands their citizens do something, they have to do it. And we’re very much concerned about that.

We’re also concerned too from a competition point of view that the Chinese government is subsidizing these two companies. When Huawei can come and grow and not only in the United States, but throughout the world, because their prices are so much cheaper, we’re concerned about subsidy.

That’s not a clear playing field. My answer…

JEFFREY BROWN: You’re…

DUTCH RUPPERSBERGER: Go ahead.

JEFFREY BROWN: Well, I was going to ask you, you’re planning to take this further. You’re taking this to the Justice Department for further action?

DUTCH RUPPERSBERGER: What we do in intelligence is that we collect information and analyze information. And if we find any criminal act whatsoever, we turn it over to the Justice Department. And that’s a classified part of our report.

There’s a lot that we cannot say because we’re the intelligence community.

But let me say this too. We want to make sure that we notify our citizens and our businesses in this country about a possible threat before the threat actually occurs. We don’t want to react after the fact, like 9/11, like other issues.

This cyber-threat is real, not only with China, but with terrorists and other individuals who can attack our country.

And that’s why, by the way, our committee also has a cyber-bill that passed that allows our intelligence community to give information about this negative and these attacks coming into our country to our providers like AT&T and Verizon and Qwest and Comcast and those providers who we — really , we’re their customers, the people of the United States.

JEFFREY BROWN: All right. Congressman Dutch Ruppersberger, thanks so much.

DUTCH RUPPERSBERGER: OK. Got it.

JEFFREY BROWN: And now a response from Huawei. William Plummer is the company’s vice president for external affairs.

Welcome to you.

WILLIAM PLUMMER, Huawei Technologies: Thank you.

JEFFREY BROWN: So, you heard the congressman. Let me ask you flat out about this question of espionage and ties to the government.

Is your company tied to the government, and has it practiced spying?

WILLIAM PLUMMER: No and no.

And the committee has not provided any information to suggest otherwise. We — when this investigation was launched last November, Huawei met with the committee staff in December in Washington. We hosted committee staff in China in February for a daylong visit.

We hosted members and staff in Hong Kong with our CEO in May. We received a list of questions from the committee via The Wall Street Journal in June, and we responded in July. We made a witness available for the hearing in September and responded to subsequent questions after that.

JEFFREY BROWN: Well, let me walk through that, because the report says specifically that the company didn’t answer questions about the role of the Communist Party in the company.

It didn’t provide data or information on previous board of directors that might have past ties.

So it is saying — and you just heard the congressman say again — that they don’t feel like they have enough information to know whether your company might be a risk.

WILLIAM PLUMMER: It’s a fair point.

In fact, actually, we did give them information in terms of what the Communist Party Committee does within the organization, which is the same that it does in KFC China or Wal-MartChina or Cisco China. It’s required by Chinese law to allow for the existence of such an entity. It has no interaction with the business whatsoever.

This company — two key points. We’re a $32 billion company doing business across 150 different markets; 70 percent of our business is outside of China. Our financing is not from the government. Our financing is from 33 different regional and commercial banks across the globe, 23 of which are outside of China.

We have over 500 operator customers globally, including the national carriers in virtually every OECD country. The quality and the integrity and the security of our solutions are world-proven.

Those facts were willfully ignored by the committee.

But more disturbing, whether you’re Huawei or Ericsson or Alcatel-Lucent or Nokia Siemens or Cisco that’s building this gear, you’re all global companies. You’re all building globally. You’re all developing, coding, and building in China.

 There are cyber-vulnerabilities, but they’re borderless.

JEFFREY BROWN: Well, so what do you think is going on? You see this one or two Chinese companies being picked out.

WILLIAM PLUMMER: In November, when this investigation was launched, a press release was issued.

If the committee’s intent had been to better secure our networks, then the press release wouldn’t have focused on the two companies with headquarters in China, but rather the six companies that are competing for this business globally that all have operations in China and elsewhere.

On that point, which was willfully ignored, Huawei, as a global leader, $32 billion in sales last year, is not just an innovator, but an integrator.

To fuel our supply chain last year, we spent $6.6 billion procuring goods from U.S.-based companies. That’s one-third of the components that go into our solutions. Those are tens of thousands of American jobs and quality and secure American technology that is going into our solutions.

JEFFREY BROWN: Well, just briefly, because we have — you’re planning to fight this.

Is that the argument you’re going to make publicly to the American public, publicly to the government? You’re planning to fight this?

WILLIAM PLUMMER: The report that was issued earlier this week was a book-long version of the press release that was announced last November.

From Huawei’s perspective, it’s an unfortunate political distraction. If the committee has issues — if one government has issues with another government, take them up via diplomatic channels.

Don’t hold hostage an independent employee-owned company that is world-respected and a leader in its field.

JEFFREY BROWN: All right.

William Plummer of Huawei, thanks so much.

WILLIAM PLUMMER: Thank you.