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Chinese telecom firms Huawei and ZTE pose security threat, congressional investigators say

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Congressional investigators plan to turn over to the FBI evidence of potential cyber-espionage involving Chinese telecommunications giant Huawei Technologies, the chairman of the House Permanent Select Committee on Intelligence said Monday.

Rep. Mike Rogers (R-Mich.) said committee investigators received “numerous allegations” from U.S. companies that equipment bought from Huawei sent unauthorized data to computers in China.

“That’s a serious problem,” Rogers said at a news conference to release the results of an 11-month investigation into Huawei and another Chinese tech giant, ZTE. “It could be a router that turns on in the middle of the night, starts sending back large data packs, and it happens to be sent back to China.”

Rogers declined to identify companies that had complained about suspicious data transfers. But he and Rep. C.A. Dutch Ruppersberger (Md.), the committee’s ranking Democrat, recommended that the U.S. government and American firms avoid using equipment from the Chinese firms for tasks that involve large amounts of sensitive data. The two lawmakers said the firms’ close ties to the Chinese government pose a threat to national security.

William Plummer, Huawei’s vice president for external affairs, denied the accusations and denounced the report as “quite strong on rhetoric” and “utterly lacking in substance.”

He said he was aware of one incident in which Huawei equipment was linked to a malicious virus, but he said it did not involve the transfer of U.S. customer data.

Plummer said a Huawei employee’s laptop was apparently infected through a WiFi center in a San Antonio hotel. When the employee connected to a customer’s network, the client noticed that the laptop “started pulsing information into the Internet” and quickly cut the connection. Plummer said the data consisted of requests for access to Web sites as part of an apparent “denial of service” effort, a fairly routine nuisance on the Internet that he said was unrelated to Huawei.

“To the extent that the committee has any familiarity with those facts, then they also know they’ve misrepresented them,” he said.

A committee staff member said the investigators had looked into the incident and had disputed Plummer’s description of what happened. “There are other incidents, too, yes,” said the staff member, who spoke on the condition of anonymity because he was not authorized to talk to the press. “But saying more would compromise sensitive or proprietary information.”

The committee report did not advocate a boycott of all products from Huawei or ZTE. But it did recommend that the federal government should block mergers of U.S. firms with the Chinese companies because of their suspected ties to the Chinese government and the potential risk of espionage.

Huawei and ZTE are major participants in the worldwide telecommunications market, but they have struggled to expand in the United States because of suspicions that they are too close to the Chinese government and could be used as conduits for spying.

ZTE released a copy of a letter sent last month to the intelligence committee in which it said the company “profoundly disagrees” with accusations that it is controlled by the government.

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