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Lawmakers urge more scrutiny of Chinese firms in wake of charges

McMorris Rodgers urges enactment of bill to compensate businesses for replacing Huawei products

House Energy and Commerce ranking member Cathy McMorris Rodgers, R-Wash., urged the Senate to clear a bill that would fund compensation for companies that have to stop using Chinese telecoms equipment.
House Energy and Commerce ranking member Cathy McMorris Rodgers, R-Wash., urged the Senate to clear a bill that would fund compensation for companies that have to stop using Chinese telecoms equipment. (Tom Williams/CQ Roll Call file photo)

Members of Congress are urging more scrutiny of Chinese companies in the U.S. after the Justice Department this week announced that two Chinese agents sought to obstruct prosecution of a telecommunications company reported to be Huawei Technologies.

The criminal charges unsealed Monday against the two Chinese intelligence officers are the latest twist in the case against the company, which the department indicted in 2020 for federal racketeering and conspiring to steal U.S. companies’ trade secrets. The Justice Department described the company as “a global telecommunications company that is a charged defendant in an ongoing prosecution.” The New York Times reported that the company was Huawei.  

“Huawei isn’t a private company — Huawei is a key piece of the Chinese Communist Party’s techno-authoritarianism,” Sen. Ben Sasse, R-Neb., a member of the Intelligence and Judiciary committees, said in a statement. “We need far more American intelligence and law enforcement focus on the CCP’s strategy to use front organizations and fake ‘private sector’ companies to try to bribe, compromise and silence Americans.”

The announcement Monday of the charges against Dong He and Zheng Wang over the Huawei case was one of three cases the Justice Department disclosed involving charges against 13 people and the arrests of two of them. Another of the three cases involved four Chinese nationals targeting U.S. university professors and others with access to sensitive information and equipment.

The Huawei case also involved a purported double agent, according to the Justice Department. The two Chinese agents, who remain at large, thought they had recruited a federal law enforcement employee to work for China, but the individual was working with the FBI, it said. 

The scheme was to steal files and other information from the U.S. attorney’s office for the Eastern District of New York.

That employee sent the duo a fake page from a strategy memorandum from the U.S. attorney’s office regarding the case in exchange for $41,000 in bitcoin, according to the criminal complaint, which also included messages from one of the defendants that appear to show Huawei’s knowledge of the scheme.  

“The defendants attempted to bribe someone they believed was an insider to steal the prosecutors’ playbook — including who the prosecutors were meeting with and what they would argue in court — all so that the company could unlawfully gain an edge and undermine the government’s case,” said Deputy Attorney General Lisa Monaco. “But that insider flipped the script on the defendants by working not for them, but for Team America.”

Monaco also said the charges show why Chinese companies shouldn’t be trusted to securely handle personal data and communications. 

Rep. Cathy McMorris Rodgers, R-Wash., the ranking member of the House Energy and Commerce Committee, urged the Senate to clear bipartisan House legislation that would fund a Federal Communications Commission program to reimburse domestic telecommunications companies for replacing Huawei products in their networks. 

“The Chinese Communist Party will stop at nothing — lying, cheating, and stealing — to undermine America’s economy and global competitive edge,” she said in a statement.

Congress enacted a law in 2019 requiring companies that receive federal subsidies to remove from their networks equipment from an entity the FCC has designated as a national security threat, such as Huawei and Chinese telecommunications company ZTE. But the FCC said this year that it’s nearly $3.1 billion short of the money needed to reimburse businesses for the cost. 

McMorris Rodgers’ reference was to legislation that would direct proceeds from spectrum auctions authorized in the bill to the reimbursement program to cover the shortfall. 

The FCC is expected to vote soon on a proposal to ban the sale of new Huawei products in the U.S. 

McMorris Rodgers also urged President Joe Biden to draw lessons from the Justice Department announcements. 

“The CCP went to great lengths to dominate the telecom sector, steal American’s personal information, and threaten our freedom and security,” she said in her statement. “This is what the future holds if he continues to cede control of our energy, technology, and health care supply chains to China.”  

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