Tuesday, September 07, 2010

Republican Senators Object to Huawei

Technology is making gestures precise and brutal, and with them men. Theodor Adorno

The tight links between Chinese state organs and the manufacturing sector were on display in yet another controversy involving Huawei, the Chinese tech firm that remains closely associated with the CCP security state. Wendell Minnick, ace military correspondent for Defense News in Asia, turns in a doozy of a piece from the print edition (behind paywall, no link). He writes:
If China’s Huawei Technologies is allowed to provide gear to U.S. telecom giant Sprint Nextel, it could threaten the United States, eight Republican senators say.


In an Aug. 18 letter to various U.S. government agencies, the senators demanded closer inspection of the Chinese firm’s ties to Iran, theTaliban and the People’s Liberation Army (PLA).

China’s largest networking and telecommunications equipment provider, Huawei is looking to bid for subcontracts offered by Sprint Nextel, a supplier to the Pentagon and U.S. law enforcement agencies. The Chinese firm’s effort is being spearheaded by Amerilink Telecom, a Kansas-based company whose chairman is retired U.S. Navy Adm. William Owens. The former vice chief of the Joint Chiefs of Staff warned in his 2000 book about a rising military threat from Beijing, but more recently has developed business ties with Chinese firms.

Huawei has supplied equipment to Iraq and Iran, the latter part of China's brilliant strategy of constantly yanking on our policymakers' obsession with the Middle East. More importantly, however, are the accusations that it is involved in cyberwarfare, an allegation that Defense News says intelligence services from several countries have made. It also has close ties to the PLA and the both the '08 and'09 Pentagon China reports say it performs R&D in conjunction with the PLA. In May China Reform Monitor noted:
British intelligence agencies have warned that Beijing could cripple IT-dependent telecom infrastructure and critical services through embedded malware installed by Chinese telecom firms Huawei. In response India’s communication ministry issued warnings to test all Chinese-installed equipment for “trapdoors, black box, and malwares.” London warned that through covert modifications Huawei could compromise systems in ways difficult to detect allowing Beijing to disrupt communications. Huawei is responsible for sweeping and debugging China’s embassies, giving their experts knowledge of telecommunication systems and their weaknesses.
David Pilling writing at FT on Huawei points out that the China fear appears to echo the fear of Japan in the 1980s:
As the article suggested, Huawei, though an extreme example, illustrates a much wider point. Just as in the 1980s, when Japanese companies were routinely accused of carrying out some dastardly, state-orchestrated plot, Chinese companies are now widely viewed as pursuing a China Inc agenda.
I am reminded of a friend's comment to in a private email:
Another example: In October 2007, Kaspersky Labs inked a deal with the Huawei-3Com joint venture, H3C, as an original equipment manufacturer (OEM) for H3C servers. Kaspersky is, presumably, working closely with H3C, wholly owned by the "U.S. fir"m 3Com (corporate headquarters actually in Shenzhen) to “further enhance the performance of H3C’s security products to quickly respond to malicious software threats and therefore to protect customer’s network to be safe and sound” according the Chief Technology Officer at H3C.

However, as late as December 2006, every one of H3C’s Chinese employees remained on the personnel rolls at the Chinese telecom giant, Huawei, even though Huawei no longer owned any H3C shares. One Chinese news report noted that “They retain Huawei personnel employment numbers, Huawei stock ownership, and their internal corporate contacts, job descriptions (zhiwei) and ranks.” Therefore, Huawei likely continues to maintain all security dossiers and to control “work certificates” (gongzuo zheng) for all of H3C’s Chinese citizen employees. Where do you think their loyalties lie?
Just like Japan, eh? And Japan sported a huge, growing military aimed at the west and territorial ambitions in the 1980s, right? You bet.

Huawei's founder has old PLA connections. And many other connections... Motorola accusation of espionage:

But in the latest 16 July filing, Motorola contends that one of the defendants, Shaowei Pan, had direct contact with Ren Zhengfei, the founder of Huawei.

"Defendant Shaowei Pan was a trusted senior engineer and director of architecture working full time at Motorola on the development of new products and new technologies for Motorola," according to the amended complaint.

"However, as set forth below, Defendant Shaowei Pan and the other defendants secretly were engaged in new product development for Huawei."

In the lawsuit, Motorola said that the technology transferred included information related to its SC300 base station transceiver, a component used for IP (Internet protocol) soft switching technology for cellular systems.

Another connection is Admiral Bill Owens. You might recall that Owens is the former US Admiral, now a businessman with a big China business and founder/member of the Sanya Initiative. Minnick writes:
Owens, who retired from the Navy in 1996, has served as CEO or a board member for several telecommunications and high-tech companies, including Nortel Networks, SAIC and satellite builder Teledesic.

In his 2000 book, “Lifting the Fog of War,” the retired admiral warned of a rising Chinese military threat.

But Owens has in recent years become better known for criticizing U.S. arms sales to Taiwan and promoting U.S.-Chinese military ties. He argued in a 2009 Financial Times opinion piece that the United States should stop supporting the self-governing island, and has called for revising the 2000 National Defense Authorization Act that restricts military cooperation with China.

A former naval colleague said Owens changed after arriving in Hong Kong in 2006 to work as managing director of AEA Holdings Asia, a private U.S.-based equity investment firm. The next year, Owens gave a speech on leadership at Huawei University, the internal educational institute of the telecom firm. Soon after, Huawei’s website praised him and his “love of his work and for his fellow man.” That same year, Owens directed AEA to bid to buy Huawei’s mobile devices unit, according to Reuters. The bid was unsuccessful.
Owens is the founder of the Sanya Initiative, writes Defense News:

In 2008, Owens helped found the Sanya Initiative to improve ties between the Chinese and U.S. militaries. The group held its first conference that year on China’s Hainan Island; its second took place last year in Honolulu.

Critics call the organization “Red Sanya;” one of the leaders of its Chinese delegation is retired PLA Lt. Gen. Xiong Guangkai, a former director of the PLA’s General Staff who spent most of his career as an intelligence officer.

The kindest thing that you can say is that Owens is being used as a catspaw by the Chinese security state to further its goals of stealing and replicating the advanced world's technology. As an official quoted in Minnick's piece said: “It’s also hard to avoid drawing a linkage between the business interests of his company, AEA Investors, and his enthusiasm for engaging the PLA.”

Speaking of catspaws and front men, another piece of news this week involved the Lafayette frigate mess. That was the one where it was alleged that the KMT got paid $400 million and another $100 million went to Beijing, for the purchase of frigates from France. Nobody likes to get close to that case, it left a trail of bodies spanning the world. Seems Jersey Island has seized a kickback...
Jersey Island’s Royal Court has put in custody an unlawful US$6.87-million commission allegedly obtained by a Taiwanese arms merchant involved in ROC arms purchases from France, said Taiwan’s Supreme Prosecutors Office Sept. 3.


Chen Hung-ta, head of the Special Investigation Division, said, “The Royal Court will maintain saisie judiciare over the money until a final ruling is reached in Taiwan. We will ask Jersey to remit the unlawful gains to the ROC as soon as the Wangs are pronounced guilty.”

Suspected of receiving huge unauthorized commissions from French sales of Mirage jet fighters and Lafayette frigates to Taiwan, Wang, his wife and four children have been charged with corruption and murder. The six fugitives are believed to be residing abroad, according to sources.

In addition to over US$700 million frozen in an account in Switzerland, the arms dealer has been found to have accounts for his arms sales kickbacks in the Cayman Islands, Luxembourg and Saudi Arabia, prosecutors said. (THN)

Only one thing missing -- the media focus has always been on fugitives Wang and family. Notice how nobody in the media is asking who all that money was for.....
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