Huawei’s Former CEO Worked for China’s Spy Agency, Current Exec Admits

Workers prepare the venue for Huawei HAS2019 Global Analyst Summit in Shenzhen, China on April 16, 2019. Billy H.C. Kwok/Getty Images

A senior official at Chinese telecom giant Huawei recently admitted to having links to a top Chinese espionage agency during a U.K. parliamentary hearing.

John Suffolk, vice president of Huawei and the company’s global cyber security officer, told U.K. lawmakers on June 10 that Huawei’s former CEO, Sun Yafang, worked for China’s Ministry of State Security.

Suffolk said that Sun “did have a role in that ministry,” but added that the tech provider was under no obligation to spy for the Chinese government.

“There are no laws in China that obligate us to work with the Chinese government with anything whatsoever,” Suffolk said.

According to Ifeng, the online news site of the Hong Kong-based pro-Beijing media Phoenix TV, Sun worked in the telecom field in the state espionage department, and used her connections to help “salvage” Huawei when it was struggling to make a profit.

Earlier in the hearing, Suffolk stated that it was part of Huawei’s duty to observe local laws in each of the 170 countries in which it has a presence.

“We do not create any moral judgments on what is right or wrong, that is for lawmakers to do … The law defines the ethics as far as we’re concerned, because in essence, it’s for governments to define what is right and wrong,” Suffolk said.

Huawei, the world’s largest telecom equipment manufacturer, has branded itself as the front-runner in the 5G race to provide ultra-fast wireless services. It claimed to have 5G contracts with over 30 countries as of late January. But the company’s 5G infrastructure has been under heightened scrutiny as a handful of governments such as the United States and the U.K. question Huawei’s security practices.

Questionable Independence

Huawei has repeatedly refuted concerns from U.S. authorities and experts over its close ties with the Chinese state. The company has claimed to be 100 percent owned by employee shareholders and that it operates independently of the government.

But according to an April report by two scholars, the employees don’t have real ownership rights; the company belongs to Huawei founder Ren Zhengfei and a trade union committee called Huawei Investment & Holding Company Trade Union Committee, with the latter holding 99 percent of the shares.

Similar to Sun, Ren had worked for the Ministry of State Security and was a director at the Information Engineering Academy in the Chinese military, an institution overseeing telecom research.

“What have been called ‘employee shares’ in ‘Huawei’ are in fact at most contractual interests in a profit-sharing scheme … Regardless of who, in a practical sense, owns and controls Huawei, it is clear that the employees do not,” the researchers wrote in the summary.

“Given the public nature of trade unions in China, if the ownership stake of the trade union committee is genuine, and if the trade union and its committee function as trade unions generally function in China, then Huawei may be deemed effectively state-owned,” they further stated.

At the U.K. parliamentary hearing, Suffolk was confronted by Norman Lamb, British Liberal Democrat and chairman of the Science and Technology Committee, on the amount of funding Huawei received from the Chinese government.

Suffolk denied that the company was lent $40 billion from the Chinese regime, but admitted that they have received loans from the state-owned China Development Bank.

“My understanding is less than 10 percent of $30 billion has been used in the last 30 years,” Suffolk said.

‘Comply with the Law’

In the hearing, the Huawei official repeatedly emphasized the company’s compliance with the law.

“I don’t think we are complicit in anything, I believe our objective is to understand the law and comply with the law,” Suffolk said in the hearing. He then noted that Huawei is “a commercial organization.”

The Chinese intelligence law updated in 2017 has mandated all Chinese organizations to support, assist, and cooperate with “national intelligence efforts” and “protect national intelligence work secrets they are aware of.”

“The Chinese government comes to you [a Chinese firm] and requests your information, requests your data, requests access to your pipelines and your networks, the only choice you have is to comply,” Klon Kitchen, a national security research fellow at the Heritage Foundation, said during a panel on March 21.

“The company is deeply tied not only to China but to the Chinese Communist Party, that connectivity, the existence of those connections, puts American information that crosses the networks at risk.” U.S. Secretary of State Mike Pompeo said in an interview with CNBC.

Huawei has seen multiple sanctions from countries such as Australia, New Zealand, and Japan. Most recently, the U.S. Department of Commerce barred U.S. firms from selling technology to Huawei, citing national security concerns.

“We must protect our critical telecom infrastructure, and America is calling on all our security partners to be vigilant and to reject any enterprise that would compromise the integrity of our communications technology or our national security systems,” U.S. vice president Mike Pence said at the 2019 Munich Security Conference.