The recent federal indictments of Chinese telecom giant Huawei and its affiliates lay out a frightening story of a foreign company illicitly manipulating and exploiting loopholes in the American business system.
The first indictment, filed in the Eastern District of New York, outlines 13 charges related to bank fraud, wire fraud, money laundering, violations of the International Emergency Economic Powers Act (IEEPA), and obstruction of justice. During Monday's press conference about the indictments, Acting Attorney General Matthew Whitaker clearly described Huawei's lies about its affiliations with an Iranian subsidiary, Skycom, which misled banks into conducting business that is illegal under US law. As Whitaker pointed out, Huawei has been allegedly deceiving and conducting illicit activities against the US government and global financial institutions for at least a decade, and this behavior "goes all the way to the top of the company."
The second indictment was filed in Washington and details 10 charges related to theft of trade secrets, wire fraud, and obstruction of justice. This indictment describes how Huawei relentlessly attempted to steal the technology behind T-Mobile's robot mobile phone testing system, Tappy. In this case, Huawei actually created an employee bonus program for those who engaged in stealing valuable and confidential information from their competitors.
These allegations are serious and alarming. Circumventing US sanctions against Iran—whose government chants "Death to America" and supports terrorist activities—undermines our national security interests. Engaging in activities that add to the estimated $225 billion to $600 billion that is lost every year to China through intellectual property theft is an attack on our economic interests.
As I describe in my upcoming book, Trump vs. China: Facing and Fighting America's Biggest Threat, in order to comprehend the significance of these charges—and the substantial risks that Huawei's alleged crimes pose to America's national security and economic interests—we must look at the bigger picture.
Huawei was founded in 1987 by a former officer of the People's Liberation Army—the Chinese Communist Party's military arm. Since then, the company has become the world's largest telecommunications equipment manufacturer—and the second largest smartphone maker.
Huawei has benefitted greatly from China's subjectively discriminatory business policies and has raised significant security concerns among US government officials. In a hearing last February, intelligence officials, including the heads of the CIA, FBI, NSA, and the director of national intelligence, all agreed that they would not advise private American citizens to buy Huawei devices or services.
This week, FBI Director Christopher Wray said that America's national security and economic security are threatened by "the immense influence that the Chinese government holds over Chinese corporations like Huawei." According to Wray, "the potential for any company beholden to a foreign government, especially one that doesn't share our values, to burrow into the American telecommunications market," would allow "the foreign government the capacity to maliciously modify or steal information, to conduct undetected espionage or exert pressure or control."
It is also important to consider the worldwide rollout of 5G telecommunications infrastructure and Huawei's current leading position in the development of this new revolutionary technology. A company exhibiting this type of illicit behavior and generating the level of concern that it has within the U.S. intelligence community should not be setting the global standards for the world's telecommunications industry. Yet, Huawei is currently testing in, has memorandums of understanding with, or is a confirmed network or vendor for at least 80 countries around the world.
The reality is, whoever controls 5G ultimately controls the future. The emergence of this technology will be the cornerstone of the world's advanced operational capabilities. It will be the key to connected infrastructure, autonomous vehicles, high tech factories, worldwide commerce, aircraft, and even our personal devices. This technology facilitates the ability to control critical infrastructure on a massive scale—which poses extraordinary security risks. It is not in the United States' interest to have this emerging industry controlled by a foreign company or government which has already raised substantial security concerns.
Lastly, the emergence of 5G and these new connective capabilities will result in a massive influx of data. Already, China has a strict set of laws which force companies to cooperate with government surveillance initiatives. FBI Director Wray asserted that China's cybersecurity law mandates that "Chinese companies, like Huawei, are required to provide essentially access upon demand [to the Chinese government] with little to no process to challenge that." The Wall Street Journal reported that companies are "required to help China's government hunt down criminal suspects and silence political dissent."
So, imagine for a moment what could happen if companies, such as Huawei, operating in an increasingly surveillance-based state were allowed to dictate the rollout of the world's global 5G network. What would it mean for Americans overseas, including our military men and women, intelligence operatives, diplomats, tourists, and students? What would happen if the United States did not press charges and allowed Huawei to continue on with their seemingly illegal activities in pursuit of profit and power?
The combined 23 charges in these indictments have made it clear that Huawei has threatened America's national security and economic interests through illegal means. Our justice system has to fully investigate and prosecute these allegations.
But the fight won't end there.
Huawei is only one company that is closely connected to China's communist government—which is fundamentally different from our own. Many others are currently positioning themselves to control the future of our technological world using unethical methods.
This is how America must start thinking about the challenge that the Communist Party of China poses to our national interests—this is not an isolated event. It is a part of a collective strategy where China's government utilizes all available tools to advance its own agenda.
Therefore, the indictments against Huawei represent more than just the beginning of a legal trial. The United States has sent a bold message to Huawei, China, and to the world. It should continue to do so—especially with China.
Any attempt to cheat to advance an agenda that undermines our American values, security, or interests must not be tolerated. America must not idly watch as a company or government attempts to manipulate, control, and exploit American businesses and citizens for profit and power.
We must continue to actively promote and stand for a world order that is based on freedom, fairness, and honesty.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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