Trump tweeted a week ago that he was working with China’s president “to give massive Chinese phone company, ZTE, a way to get back into business, fast . . . Too many jobs in China lost. Commerce Department has been instructed to get it done!”
That message came days after ZTE said it would “cease major operating activities” because the Commerce Department had recently announced trade restrictions on the firm for violating the terms of a 2017 deal for the company’s violations of U.S. sanctions.
Now, the Commerce Department is engaged in negotiations with ZTE that could ease the penalties against the firm, according to people familiar with the talks.
The president’s instruction to Commerce to ease up on ZTE has led to speculation that the firm may have become a bargaining chip as the United States tries to extract trade concessions from China and secure cooperation on sanctions against Iran and North Korea.
But to families who have lost loved ones to terrorism attacks, Trump’s actions are important for entirely different reasons.
Under the terms of the 2017 plea deal ZTE struck with a number of U.S. government agencies, ZTE agreed to combined fines of nearly $1.2 billion — but $300 million of that was suspended, to be paid only if the company violated its deal with Commerce.
Now that Commerce has formally accused ZTE of lying during its settlement talks and probationary period about whether company employees had been punished for their conduct in violating sanctions, advocates had expected the U.S. to collect that $300 million.
Under U.S. law, half of that money — $150 million — would go into a fund created to compensate the families of victims of state-sponsored terrorism.
After the president’s pronouncement, those families now fear the administration may back out of collecting that penalty on behalf of victims.
“As a government, we have to send the right signal to ZTE and other bad actors that the United States does not flounder or play when it comes to holding countries accountable that violate U.S. sanctions against state sponsors of terrorism,” said Edith Bartley, whose brother and father were killed when al-Qaeda bombed U.S. embassies in Africa in 1998.
To Bartley and others, it makes no sense for an administration that prides itself as being tough on terrorism to suddenly go soft on firms that do business with terror-backing governments.
“Many of these victims of terrorism were serving their country, and the world is watching,” she said. “North Korea is watching.”
Stuart Newberger, a lawyer representing victims’ families, said ZTE should have to pay even more than the $300 million spelled out in last year’s plea deal.
If the Trump administration lets ZTE off the hook for the payment, he said, “all that’s going to do is encourage people to do business with terrorist states. So if the president is serious about going after Iran and terrorist states, they have to be serious about holding ZTE to the consequences of its conduct.”
A Justice Department spokesman referred questions to the Commerce Department, where a spokeswoman declined to comment.
The fund was created by Congress several years ago for people who have won court judgments as victims of state-sponsored terrorism. To date, the fund has collected more than a billion dollars, principally from settlements with foreign banks accused of violating U.S. sanctions against Iran. Eligible recipients of the fund are those who have won court judgments from terrorism incidents during the 1970s, 1980s and 1990s, including those who were taken hostage at the U.S. Embassy in Iran in 1979 and the families of those killed in attacks on U.S. personnel in Lebanon during the 1980s.