House Intelligence committee Chairman Mike Rogers (R-Mich.) at a press conference about a report accusing Huawei and ZTE of spying on behalf of the Chinese government.
(Credit: Shara Tibken/CNET )WASHINGTON, D.C.--The House Intelligence Committee released a report this morning, accusing two Chinese makers of telecommunications gear of posing a national security threat and discouraged American businesses from buying their equipment.
In a 52-page report, the committee said that neither Huawei nor ZTE addressed concerns raised repeatedly by lawmakers over their ability to snoop on American companies or individuals. And neither company was able to convince the committee that they could not be persuaded by the Chinese government to aid its espionage efforts if enlisted to do so.
"Neither company was willing to provide sufficient evidence to ameliorate the Committee's concerns," the committee wrote in its report. "Neither company was forthcoming with detailed information about its formal relationships or regulatory interaction with Chinese authorities. Neither company provided specific details about the precise role of each company's Chinese Communist Party Committee."
Because of that, the committee concluded that American companies should consider buying their telecommunications gear from other companies.
"U.S. network providers and systems developers are strongly encouraged to seek other vendors for their projects," the committee wrote. "Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."
Bill Plummer, Huawei's vice president for external affairs, called the report a "political distraction" when asked if it would impact the company's business in the U.S.
"Huawei is a world-trusted company with products globally proven to be secure," Plummer said. "Those are the facts today and those will be the facts tomorrow."
The committee took particular aim a Huawei, the larger of the two companies. In its report, the committee said that "several former and current Huawei employees," who the committee didn't name to protect them from retaliation or dismissal, alleged a pattern of illegal behavior by Huawei officials. They included fraud, bribery, copyright infringement, and immigration violations, among others. The committee said it will refer the allegations of fraud and bribery to the Justice Department.
CNET visited Huawei's Chinese headquarters in Shenzhen and a research facility in Shanghai this summer to report on the concerns among lawmakers and the company's response.
During a press conference at the Capitol this morning, committee Chairman Mike Rogers (R-Mich.) underscored the threat to national security by allowing the gear of Huawei and ZTE to handle sensitive data over computer networks.
"Are we ready to have these two companies, clearly tied to the Chinese government ... to have access to most sensitive data we deal with every day," Rogers said.
C.A. Dutch Ruppersberger, (D-Md.), the ranking Democrat on the committee, dismissed the notion that the report was merely "trade protectionism masquerading as national security." He cited the persistent efforts within China to hack into sensitive U.S. networks to steal data.
While the report was heavy on rhetoric, it provide few new specific allegations about alleged spying efforts. There was not a singled instance cited, for example, of data theft enabled by the gear of either company.
Instead, lawmakers cited several instances of issues that raised red flags. Some ZTE gear has what the committee views as a "backdoor," a way for snoops to sneak into a network undetected, Rogers said in the press conference. ZTE, though, refers to that as "a bug." He cited other examples of equipment performing oddly with no explanation, such as "beaconing," which is when routers turn on in the middle of the night and send large data packs elsewhere.
In the end, Rogers said he hopes the report will signal to the Chinese government that U.S. lawmakers will not let spying threats go ignored.
"We hope this is at least a wake-up call and we hope this is the first step to ensuring there's a free and open market when it comes to telecommunications," Rogers said.
Updated with more details and analysis at 7:45 a.m. PT.
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