Senators Call Out Huawei Threat in Letter to Microsoft

Visitors check out new Huawei smartphones at the 2019 IFA home electronics and appliances trade fair in Berlin, Germany, on Sept. 6, 2019. Sean Gallup/Getty Images

Five U.S. senators wrote to Microsoft on Oct. 7 concerning the “real and urgent” threats posed by Chinese tech giant Huawei.

The letter was in response to Microsoft President Brad Smith, also the U.S. software developer’s chief legal officer, who said in a Bloomberg Businessweek interview that U.S. regulators should provide more evidence to back up its rationale for blacklisting Huawei.

In May, the U.S. Department of Commerce placed Huawei and 68 subsidiaries on an “entity list” on national security grounds, which effectively banned it from doing business with U.S. companies unless it applies for a special license. U.S. authorities have since added more Huawei subsidiaries to the list.

“To tell a tech company that it can sell products, but not buy an operating system or chips, is like telling a hotel company that it can open its doors, but not put beds in its hotel rooms or food in its restaurant,” Smith told Bloomberg.

Huawei CEO Richard Yu gives a press conference to present the new Huawei MateBook X pro laptop in Barcelona, on Feb. 25, 2018. Josep Lago/AFP/Getty Images

The senators, including Tom Cotton (R-Ark.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Mike Braun (R-Ind.), and Josh Hawley (R-Mo.), listed examples of Huawei’s cyberespionage and technology theft.

“We appreciate Microsoft’s communications with our offices and your understanding of the threats posed by Huawei. We also understand that many American companies have conducted business in good faith with Huawei and other Chinese telecommunications companies,” the letter stated.

“We believe, however, that a review of publicly available evidence indicates that the security concerns about Huawei are real and urgent.”

The senators also quoted Secretary of Defense Mark Esper, who cautioned European allies against China’s security threats, during a speech in September.

“Huawei is the means by which China would get into our networks and our systems, and either attempt to extract information or to corrupt it, or to undermine what we’re trying to do,” Esper said.

Cotton said in an Oct. 7 tweet, “Huawei poses an enormous threat to our national security.”

Cotton’s office could not be reached as of press time.

Concerns About Huawei

Huawei is a major Microsoft customer, using Microsoft software for its devices.

U.S. officials and experts have previously sounded the alarm over the company, saying its products could be used by the Chinese regime for spying or to disrupt communication networks due to its close ties with the Chinese military. Critics have also raised the point that Chinese laws compel Chinese companies to cooperate with intelligence agencies when asked.

Although Huawei claims it has no ties with the Chinese regime, the company’s founder, Ren Zhengfei, was an officer at China’s Ministry of Security, the country’s top espionage agency. Sun Yafang, who served as Huawei’s CEO from 1998 to 2018, also worked for the same agency.

Ren Zhengfei, founder of Huawei. Ren is a member of the Chinese Communist Party and a former electronic warfare expert for China’s Peoples’ Liberation Army. Hector Retamal/AFP/Getty Images

A July study by Christopher Balding, an associate professor at Fulbright University Vietnam, analyzed the leaked CVs of thousands of Huawei employees and found that about 100 staff members had links to Chinese military or intelligence agencies.

“The CCP has office space and minders inside Huawei’s Shenzhen headquarters,” the senators’ letter states.

According to a biography published by the state-run publication Huazhong University of Science and Technology Press, the Chinese military was Huawei’s main customer during the 1990s.

The China Development Bank, a financial institution under the cabinet-like State Council, has “closely worked with Huawei since 1998 and signed a cooperation agreement with Huawei in 2009 to supply it with $30 billion in low-interest loans,” according to a 2009 report on state media Xinhua.

Employees work at a Huawei store in Dongguan, China, on Aug. 9, 2019. Fred DufourAFP/Getty Images

Trade Theft and Espionage

The Chinese company is currently indicted in two U.S. cases. It is charged with bank fraud and violating U.S. sanctions on Iran by allegedly misrepresenting to U.S.-based banks its relationship with a subsidiary that did business in the country.

In a separate indictment, Huawei is charged with stealing trade secrets from U.S. mobile carrier T-mobile relating to a cellphone-testing robot.

Federal prosecutors are also reportedly investigating the Chinese company over other instances of alleged theft of intellectual property.

In January, Polish authorities arrested a Huawei sales director who previously worked at the Chinese consulate in Poland’s capital on spying charges. Huawei fired the employee three days later.

In June, research by cybersecurity firm Finite State also found Huawei’s devices much more vulnerable than its competitors to hacking. Tests showed that over 55 percent of the 550 tested Huawei devices had at least one potential backdoor that could be a gateway for malicious attacks.

On Sept. 25, the Senate passed Resolution 331 to keep Huawei on the entity list.

Earlier in the same month, U.S. President Donald Trump called Huawei “a big concern of our military [and] of our intelligence agencies,” and reaffirmed that they are “not doing business with Huawei.”

“It’ll stop almost completely in a very short period of time,” he said at the press conference.