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Attorney General Barr says Chinese companies ‘Huawei and ZTE cannot be trusted’

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Via CNBC

Attorney General nominee William Barr arrives for a meeting with Sen. Josh Hawley (R-MO) on January 29, 2019 in Washington, DC.

Mark Wilson | Getty Images

U.S. Attorney General William Barr wrote a letter November 13 to Federal Communications Commission Chairman Ajit Pai saying Chinese technology giants Huawei and ZTE “cannot be trusted,” according to the memo.

Barr was writing in support of the FCC’s draft Report and Order that would disallow the two companies — which make popular computers, smart phones, routers and internet equipment — from selling goods to entities using money from the FCC’s Universal Service Fund. These entities often include regional, rural broadband providers.

Barr noted the companies’ significant role in the global 5G equipment market as a reason for caution: “We will become even more dependent on those networks as more and more devices and services are connected and operate at unprecededented speeds. Human life and safety as well as critical government functions will ride on them,” he said.

“Our national defense will depend on the security of our allies’ networks as well as our own,” Barr said, a nod to allied nations, particularly in Europe, that have adopted Huawei’s 5G technology against the wishes of the U.S.

U.S. intelligence agencies have long espoused the belief that Huawei and ZTE have relationships too close to the Communist government in Beijing, and those ties represent a threat to national security if the companies provide U.S. technology infrastructure.

Barr referenced a number of criminal matters involving Huawei in the U.S., including federal charges against the company’s CFO Meng Wanzhou. Meng remains in Canada, where she was arrested in December 2018, and faces extradition on fraud charges related to allegations she helped facilitate payments from Iran against U.S. embargoes. Meng is the daughter of Huawei’s CEO Ren Zhengfei.

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Barr also referred to an ongoing criminal case in Washington state, involving allegations Huawei unfairly exploited a relationship with T-Mobile to steal trade secrets from the company.

Huawei has strongly denied charges in both criminal cases, and have also long denied the company is beholden to the Chinese government or military.

Barr also said Chinese subsidies have unfairly hurt competition: “The Chinese have subsidized their firms to lock up as much of the market as possible. This, as well as conduct like that alleged in our cases, threatens to thwart the emergence of fair competition and lead to irreversible market dominance that will force all of us onto Chinese systems, causing unmitigable harm to our national security.”

The letter was notably less-than-conciliatory at a time when the bans of companies like Huawei and ZTE may figure into ongoing trade negotiations with China. “At this critical moment, while the world decides where to place its trust, we should not signal that Huawei and ZTE are anything other than a threat to our collective security,” Barr wrote. 


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