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October 19, 2012

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US finds no proof of spying by Huawei

A White House-ordered review of security risks posed by suppliers to US telecommunications companies found no clear evidence that Huawei Technologies Ltd had spied for China, two people familiar with the probe told Reuters.

Instead, those leading the 18-month review concluded early this year that relying on Huawei, the world's second-largest maker of networking gear, was risky for other reasons, such as the presence of vulnerabilities that hackers could exploit.

These previously unreported findings may douse speculation that Huawei has been caught spying for China.

A landmark US congressional report last week warned against allowing Chinese companies Huawei and ZTE Corp to supply critical telecom infrastructure.

At the White House's direction, according to people familiar with the matter, intelligence agencies and other departments conducted the largely classified inquiry, delving into reports of suspicious activity and asking detailed questions of nearly 1,000 telecom equipment buyers.

"We knew certain parts of government really wanted" evidence of active spying, said one of the people, who requested anonymity. "We would have found it if it were there."

A spokesman for Huawei said the company was not familiar with the review but it was not surprised that no evidence of Huawei espionage was found.

Last week's report from the Republican and Democratic leaders of the House Intelligence Committee noted the potential for spying through Huawei gear installed to manage traffic on wireless networks. The committee also criticized Huawei's leadership for failing to provide details about its relationships with Chinese government agencies.

Huawei has rejected the House report as unfair and inaccurate. China's Commerce Ministry has also called the accusations "groundless."

"Huawei is a US$32 billion independent multinational that would not jeopardize its success or the integrity of its customers' networks for any government or third party. Ever," the company's US spokesman Bill Plummer said on Wednesday.

ZTE said it had never encountered an instance of its equipment causing security problems where it operates. "We believe our equipment is safe," said spokesman David Dai Shu. "ZTE recognizes and fully respects the obligation to protect national security of all countries in which ZTE's equipment are deployed."

The House Intelligence Committee's report did not present concrete evidence that either Huawei or ZTE has stolen US data, although it said a classified annex provided "significantly more information adding to the committee's concerns" about the risk to the United States.

Speculation has swirled about the contents of the secret annex, and both committee Chairman Mike Rogers and some intelligence officials have hinted at evidence that Huawei has participated in espionage. Rogers, the report's lead author, stoked concerns by saying some customers had seen routers sending off "very valuable data" to China.

But in the one case a committee staff member pointed out to Reuters, the victim Leap Wireless International Inc said that while some of its computers were infected with viruses earlier this year, an investigation found no evidence that the infection was deliberate or that confidential data had been stolen.


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