U.S. lawmakers say cell phone provider here is a security risk

U.S. members of Congress say that Huawei, one of Costa Rica’s major telecom suppliers, is a security risk.

The Instituto Costarricense de Electricidad has awarded a major 3G telephone line contract to the Chinese Huawei Technologies, which was the low bidder.

The U.S. lawmakers also warned about ZTE Corp., which was an unsuccessful bidder on the same cell telephone contract in 2009.

Both firms are linked closely with the Chinese government. A U.S. House of Representatives report said the companies pose a long-term corporate and national security threat.

At a news conference on Capitol Hill, Mike Rogers, a Republican from Michigan, said the committee began investigating concerns about the telecommunications companies Huawei and ZTE a year ago, interviewing former Huawei employees, industry experts and intelligence officials.  He is chairman of the House Intelligence Committee.

Rogers said the panel was disappointed by the incomplete, contradictory and evasive answers provided by Huawei and ZTE during the investigation.

An Intelligence Committee report recommends U.S. government systems, especially sensitive systems, exclude Huawei and ZTE equipment and component parts.  The report pointed out critical infrastructure, everything from electric-power grids to banking and finance systems to water systems, is extremely inter-connected, and said the risk is high that a failure or disruption in one system could have a devastating ripple effect.

U.S. Rep. Dutch Ruppersberger, a Democrat from Maryland, warned of a heightened risk of cyber-espionage or cyber-attack from the two firms.

“We already know the Chinese are aggressively hacking into our nation’s networks, threatening our critical infrastructure, and stealing millions of dollars worth of trade secrets and other sensitive information from American companies,” he said.

Ruppersberger said $300 billion worth of U.S. trade secrets are stolen every year, and that most of the cases prosecuted involve China.

William Plummer, Huawei vice president for external affairs, attended the news conference and spoke to reporters afterwards.  Plummer strongly rejected the conclusions of the investigation and said it was motivated by political suspicions of China during an election year in the United States.

“There are politics and then there are facts,” said Plummer. “The facts are that this company is globally trusted, and that our product is world proven in terms of its security and integrity.”

Plummer said Huawei has too much to lose to collaborate with Chinese cyber-espionage.  He said it is an independently-owned company that has been operating in the United States for years.

Chinese Foreign Ministry spokesman Hong Lei also rejected the report, saying Chinese companies do not pose a national security threat to the United States.

He said he hopes the U.S. Congress will, in his words, “set aside prejudices and respect the facts.”

U.S. national security policy officials say Huawei works closely with the Chinese military on research and development projects.  Huawei is looking to expand in the U.S. telecommunications market, and its cellphones and 4G networks are popular worldwide.

One industry source said that Huawei was poised for a push into the U.S. market, something that upsets U.S. lawmakers in an election year.

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