Why Huawei should worry America

by Eli Lake

Bloomberg

When I heard the news of the arrest in Canada of Meng Wanzhou, Huawei’s chief financial officer, my thoughts turned to Al Capone.

Capone was targeted for running Chicago’s underworld but was ultimately brought down for tax evasion. Canadian authorities detained Meng on what appears to be Huawei’s evasion of U.S. sanctions against Iran. These are serious allegations, but U.S. intelligence agencies have an even greater concern: that China’s largest telecom company will allow the Chinese state to monitor the electronic communications of anyone using Huawei technology.

This is why leaders of U.S. spy agencies in February urged Americans not to use Huawei or ZTE phones. This is why Australia effectively banned Huawei from helping build its 5G wireless network this year. And this is why, in October, Senators Marco Rubio of Florida and Mark Warner of Virginia warned Canada’s prime minister that Canada’s participation in joint intelligence activities with the U.S., the U.K., Australia and New Zealand may be curtailed if Canada allows Huawei to help build or maintain the country’s 5G wireless network.

In some ways these concerns about Huawei are old news. In 2012, the House Intelligence Committee released a comprehensive report on Huawei and ZTE that concluded these companies would give China’s military and intelligence agencies access to the U.S. telecommunication network. “Inserting malicious hardware or software implants into Chinese-manufactured telecommunications components and systems headed for U.S. customers could allow Beijing to shut down or degrade critical national security systems in a time of crisis or war,” it said.

Until recently, though, it was difficult to say definitively that Huawei acts as an agent of the Chinese government. Yes, the company’s founder (and Meng’s father), Ren Zhengfei, was a technician for the People’s Liberation Army before founding Huawei in 1987. And the Chinese government has invested tens of billions of dollars in Huawei, giving it a competitive advantage in the global marketplace.

Not until China passed its National Intelligence Law and a related cybersecurity law in 2017, however, did it become clear that Chinese companies like Huawei are now obliged to assist the Chinese state when it comes to espionage. Many nations have statutes that require a company’s cooperation with law enforcement on national security grounds. But the new Chinese laws would also compel corporations to assist in offensive intelligence operations. Cooperation, says an analysis in Lawfare, would mean handing over access to “key business and personal data (which must be stored in China), proprietary codes, and other intellectual property.”

In some ways the Chinese are following the U.S. lead. As documents disclosed by former contractor Edward Snowden revealed, the National Security Agency had a program to pay U.S. telecom companies for access to their customer’s data. The NSA has a long history of cooperation with the first generation of American telecom companies, such as AT&T, which gave the U.S. and its English-speaking allies a huge technical intelligence advantage over the Soviet Union.

There are also important differences here. The U.S. government’s own surveillance apparatus is not used to steal technology for the benefit of U.S. corporations. Nor is the U.S. government building a domestic spying network to evaluate the social behavior of its citizens.

All of this brings us back to Huawei. It’s good to see the U.S. finally taking more concrete action against the telecom giant that American spies have been warning about for nearly a decade. But prosecuting the company’s executives for violating sanctions does not address the bigger threat Huawei poses. For that, America and its allies must make sure Huawei is kept far away from their cell phone towers.

Eli Lake is a Bloomberg Opinion columnist who focuses on security issues.