U.S. Prosecutors Hit Huawei With New Federal Charges

Feb 14, 2020
Originally published on February 14, 2020 4:59 am
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NOEL KING, HOST:

The Trump administration is keeping the pressure on Huawei, the giant Chinese telecommunications equipment company. The Department of Justice has issued a new indictment that accuses the company of racketeering and several counts of fraud. NPR's Jim Zarroli has been following all this. He's on the line. Hey, Jim.

JIM ZARROLI, BYLINE: Good morning, Noel.

KING: So you've seen the indictments. What is the Justice Department claiming Huawei did?

ZARROLI: Well, it says that Huawei has been basically stealing trade secrets from big American tech companies for two decades - things like, you know, source code for Internet routers and antenna technology. Now, the indictment doesn't name the companies, but we know because of previous published reports and lawsuits that they include Cisco, Motorola and T-Mobile. And also, the indictment says Huawei did this because it wanted to save money on research and development. Oh, and it also accuses Huawei of doing business with Iran and North Korea and concealing it from law enforcement.

KING: OK. So there is a lot there.

ZARROLI: Yeah.

KING: With respect to trade secrets, which is a big issue nowadays, does the indictment explain how Huawei stole them? They're supposed to be secret, right?

ZARROLI: Yeah, well, it says - it spells out six different cases where employees of Huawei or its subsidiaries stole technology - or at least tried to. In one of the cases, for instance, one of Huawei's employees had access to a robotics lab at a company in Washington state. And this employee secretly helped another person, who was an engineer at Huawei, get into the lab. And this engineer gathered up a lot of information about a robot that the company was making.

Then there was another incident at the same company where a Huawei employee took a robot arm out of the lab, and then measured it and photographed it and sent information back to Huawei management. Now, Huawei has admitted that this happened, but it says it was an isolated incident. The government says - the U.S. government says it was just part of a pattern of intellectual theft, property theft.

KING: How much of the information in this indictment is stuff we haven't seen before?

ZARROLI: Well, most of it has already come out. There is some new detail, for instance, about Huawei's dealings with Iran and North Korea. The indictment says that Huawei was selling surveillance equipment to the Iranian government that allowed it to monitor protesters during demonstrations against the government in 2009. It quotes emails in which the two countries are referred to by codes. This would be - now, this kind of commercial activity with Iran would be a violation of American sanctions. The indictment says that the banks did business - that the banks that did business with Huawei asked about what was going on, and Huawei officials lied. And then when Huawei found out that U.S. officials were investigating it, it allegedly arranged to transfer employees who knew about what was happening back to China.

KING: Jim, if we already knew a lot of this already, why is the Trump administration coming out with this indictment now?

ZARROLI: Well, this is part of a campaign by the administration to put the squeeze on Huawei. The company makes a lot of the telecom equipment used to provide countries with Internet service. U.S. National Security Adviser Robert O'Brien just said that Huawei has a kind of backdoor in its equipment. It lets it spy on Internet users in other countries. And the U.S. has been pressuring American allies not to buy Huawei equipment. The administration also bars American companies from selling to Huawei. So the U.S. really sees Huawei as a long-term security threat.

KING: And what does Huawei say?

ZARROLI: Well, it's been really vigorously denying the charges. It released a statement yesterday saying the indictment is based on recycled civil disputes from the last 20 years. It says this is an attempt to damage Huawei's reputation. It says this is about competition. I mean, Huawei is one of the big providers of equipment for the next phase of wireless technology called 5G. The U.S. is afraid China will dominate it.

KING: NPR's Jim Zarroli. Jim, thanks so much.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.