Exclusive: US investigates Chinese Huawei for equipment near missile silos

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WASHINGTON, July 21 (Reuters) – The Biden administration is investigating Chinese telecommunications equipment maker Huawei over concerns that U.S. cell towers equipped with its equipment could capture sensitive information from military bases and missile silos that the company could then forward to China, two people familiar with the matter said.

Authorities are concerned that Huawei could obtain sensitive data about military exercises and the readiness of bases and personnel through the equipment, one of the people said, requesting anonymity because the investigation is confidential and involves national security.

The previously unreported investigation was initiated by the Commerce Department shortly after Joe Biden took office early last year, the sources said, following the implementation of rules to fleshing out a May 2019 executive order that gave the agency investigative powers.

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The agency subpoenaed Huawei in April 2021 to learn about the company’s policy on sharing data with foreign parties that its equipment might capture from cellphones, including messages and geolocation data, according to the agency. 10-page document viewed by Reuters.

The Commerce Department said it could not “confirm or deny ongoing investigations.” He added that “protecting the safety and security of American people from the collection of malicious information is essential to protecting our economy and our national security.”

Huawei did not respond to a request for comment. The company has strongly denied US government allegations that it could spy on US customers and pose a threat to national security.

The Chinese Embassy in Washington did not respond to the specific allegations. In an emailed statement, he said: “The US government is abusing the concept of national security and state power to go to great lengths to suppress Huawei and other Chinese telecommunications companies without providing any evidence. solid that they pose a threat to the security of the United States and other countries.”

Reuters could not determine what action the agency might take against Huawei.

Eight current and former US government officials said the investigation reflected lingering national security concerns about the company, which has already been hit by a host of US restrictions in recent years.

For a timeline of the U.S. government’s trade restrictions on Huawei, please click https://graphics.reuters.com/USA-CHINA/HUAWEI-TIMELINE/zgvomxwlgvd/

If the Commerce Department determines that Huawei poses a national security threat, it could go beyond existing restrictions imposed by the Federal Communications Commission (FCC), the US telecommunications regulator.

Using sweeping new powers created by the Trump administration, the agency could ban all U.S. transactions with Huawei, requiring U.S. telecom carriers that still rely on its equipment to quickly remove it or face fines or penalties. other sanctions, a number of lawyers, academics and former officials. interviewed by Reuters said.

The FCC declined to comment.

US-CHINA TECHNOLOGY WAR

Huawei has long been dogged by US government allegations that it may be spying on US customers, although authorities in Washington have released little evidence. The company denies the allegations.

“If Chinese companies like Huawei have unrestricted access to our telecommunications infrastructure, they could collect all of your information that passes through their devices or networks,” FBI Director Christopher Wray warned in a 2020 speech. “Worse still: they would have no choice but to hand it over to the Chinese government, if asked.”

Reuters could not determine whether Huawei’s equipment is capable of collecting this type of sensitive information and providing it to China.

“If you can stick a receiver on a (mobile phone) tower, you can pick up signals and that means you can get intelligence. No intelligence agency would pass up such an opportunity,” said Jim Lewis, an expert in technology and cybersecurity at the Center for Strategic and International Studies (CSIS), a Washington DC-based think tank.

One of the steps taken to address the perceived threat was a 2019 law and related rules prohibiting US companies from using federal subsidies to buy telecommunications equipment from Huawei. He also instructed the FCC to require US carriers that receive federal subsidies to purge their networks of Huawei equipment, in exchange for reimbursement.

But the so-called “rip and replace” deadline for completely removing and destroying Huawei equipment won’t come into effect until mid-2023 at the earliest, with additional opportunities for companies to apply for extensions. And refunds will only reach 40% of the total requested for now.

TOWERS NEAR THE MISSILE SILOS

According to the two sources and an FCC commissioner, cell towers equipped with Huawei equipment near sensitive military and intelligence sites have become a particular concern for US authorities.

Brendan Carr, one of five FCC commissioners, said cellphone towers around Malmstrom Air Force Base in Montana – one of three that monitor missile fields in the United States – were working with Huawei technology.

In an interview this week, he told Reuters there was a risk that smartphone data obtained by Huawei would reveal troop movements near the sites: “There is a real concern that some of this technology could be used as an early warning system if there were to be, God forbid, an ICBM missile strike.”

Reuters was unable to determine the exact location or range of Huawei equipment operating near military installations. People interviewed by Reuters reported at least two other probable cases in Nebraska and Wyoming.

Nebraska Telecommunications Regulator Commissioner Crystal Rhoades alerted the media to the risk posed by the proximity of Viaero-owned cell towers to intercontinental ballistic missile (ICBM) silos in the western part of the state.

ICBMs carry nuclear warheads to targets thousands of miles away and are stored in underground silos near military bases. The Nebraska cell towers sit near a missile field overseen by FE Warren Air Force Base in neighboring Wyoming.

Viaero provides mobile phone and wireless broadband services to approximately 110,000 customers in the region. He said in a 2018 FCC filing opposing the commission’s efforts to curb Huawei’s expansion that about 80% of its equipment was made by the Chinese company.

This equipment could potentially allow Huawei to glean sensitive information from sites, Rhoades told Reuters in June.

“An enemy state could potentially see when things are online, when things are offline, the level of security, how many people are on duty in a given building where there are really dangerous and sophisticated weapons,” Rhoades said. .

Rhoades said in July that it had not been informed of Viaero’s removal and replacement efforts in more than two years, despite the company’s request for updated information in recent weeks.

At the time of last contact, the company said it would not begin takedown efforts until FCC money becomes available.

The FCC on Monday told the companies how much of their funding requests it can reimburse.

Viaero did not respond to multiple requests for comment. Huawei also declined to comment.

In Wyoming, John Woody, then CEO of rural carrier Union Wireless, said in a 2018 interview with Reuters that the company’s coverage area included ICBM silos near FE Warren Air Force Base and that its equipment included Huawei switches, routers and cell sites.

Last month, Eric Woody, John’s son and interim CEO, said “virtually all Huawei equipment purchased by Union remains in our network.” He declined to say whether towers near sensitive military sites contain Huawei equipment.

FE Warren Air Force Base referred comments on Huawei equipment to the Pentagon. The United States Strategic Command, which is responsible for nuclear operations, said in a statement to Reuters: “We are constantly aware of activities near our facilities and sites.” He noted that “any concerns are across government,” but declined to provide further details on the nature of those concerns.

NEW POWERS AGAINST FOREIGN OPPONENTS

Rick Sofield, a former DOJ official in the National Security Division that reviewed telecommunications transactions, said the Commerce Department investigation could give the FCC crackdown some extra teeth, but that there was nothing new about targeting Huawei.

“The U.S. government’s concerns about Huawei are widely known, so any information or communications technology company that continues to use Huawei products assumes the risk of the U.S. government coming knocking,” said Sofield, which represents U.S. and foreign companies facing U.S. national security reviews. . He said he had not worked for Huawei.

The Commerce Department is using authority granted in 2019 that allows it to prohibit or restrict transactions between U.S. companies and internet, telecommunications and technology companies from “adversarial foreign” countries, including Russia and China, in accordance with the decree and related rules.

The two sources familiar with the Huawei investigation and a former government official said Huawei was one of the first cases of the Biden administration using the new powers, referred to Commerce in early 2021 by the Justice Department.

The Justice Department referred Reuters requests for comment to Commerce.

The subpoena is dated April 13, 2021, the same day Commerce announced that a document request had been sent to a joint-stock Chinese company under the new powers.

It gives Huawei 30 days to provide seven years of “records identifying Huawei’s business transactions and relationships with foreign entities outside of the United States, including foreign government agencies or parties, that have access to, or who share in any capacity the United States”. user data collected by Huawei.”

Noting that “the subject matter of this investigation is the supply of mobile networking and telecommunications equipment…by Huawei in the United States”, it also asks Huawei for a complete catalog of “all types of equipment sold”. to “any communications provider in the United States”. United States”, including the names and locations of the selling parties.

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Reporting by Alexandra Alper; Additional reporting by Diane Bartz; Editing by Chris Sanders and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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