[Congressional Record (Bound Edition), Volume 158 (2012), Part 5]
[Extensions of Remarks]
[Pages 6818-6820]
[From the U.S. Government Publishing Office, www.gpo.gov]




      SIDLEY AUSTIN LLP'S LOBBYING FOR CHINESE TELECOM FIRM HUAWEI

                                 ______
                                 

                           HON. FRANK R. WOLF

                              of virginia

                    in the house of representatives

                         Tuesday, May 15, 2012

  Mr. WOLF. Mr. Speaker, I submit my recent correspondence with Mr. 
Carter G. Phillips, managing partner for Sidley Austin LLP, regarding 
the firm's representation of Chinese telecom firm Huawei. As noted in 
the letters, the U.S. national security community has serious concerns 
with Huawei's connections to the People's Liberation Army and Chinese 
intelligence.
  Equally troubling is Huawei's well-documented history of supporting 
America's greatest adversaries--some of the most repressive and brutal 
regimes in modern history--including the Taliban regime in Afghanistan, 
Saddam Hussein regime in Iraq and the current regime in Iran.
  Today, through Huawei, China exports its repressive technologies to 
likeminded governments. An October 27, 2011, Wall Street Journal piece 
reported that the Chinese telecom giant Huawei ``now dominates Iran's 
government-controlled mobile-phone industry . . . it plays a role in 
enabling Iran's state security network.''
  Respected national security reporter Bill Gertz also recently 
reported that Huawei has also been ``linked to sanctions-busting in 
Saddam Hussein's Iraq during the 1990s, when the company helped network 
Iraqi air defenses at a time when U.S. and allied jets were flying 
patrols to enforce a no-fly zone. The company also worked with the 
Taliban during its short reign in Afghanistan to install a phone system 
in Kabul.''
  For these reasons, I also wrote to Ms. Samantha Power, the director 
for multilateral affairs on the National Security Council at the White 
House. I also submit this letter for the Record. Given Huawei's 
troubling activities in Iran, I urged Ms. Power, in her capacity as 
chair of the newly-created Atrocities Prevention Board, to consider 
whether the company should be sanctioned.
  It is inconceivable to me that a respected law firm like Sidley 
Austin would represent a Chinese state-directed company like Huawei, 
given the significant national security concerns as well as its 
appalling record of supporting some of the world's worst regimes.

                                     House of Representatives,

                                   Washington, DC, April 25, 2012.
     Mr. Carter G. Phillips,
     Managing Partner, Sidley Austin LLP, Washington DC.
       Dear Mr. Phillips: It has recently come to my attention 
     that a lobbyist with your firm has been retained by the 
     Chinese telecom firm Huawei to lobby Congress and the 
     administration.
       Given the longstanding and serious concerns from senior 
     officials in the U.S. intelligence and defense communities, 
     as well as the Congress, about Huawei's connections to the 
     Peoples' Liberation Army and the potential vulnerabilities of 
     its telecom products, I was surprised that a firm of your 
     caliber would agree to represent a company that is so closely 
     connected to the Chinese government.
       In all my years in Washington, very rarely have I seen the 
     leadership of defense, intelligence and civilian agencies 
     come together in such a concerted effort to warn of a 
     security threat from a foreign entity. When the White House, 
     intelligence community, Defense Department and the Commerce 
     Department all have worked to block Huawei from gaining 
     greater access to U.S. networks, everyone should take notice.
       Just last month, during a hearing before the House 
     Commerce-Justice-Science (CJS) Appropriations subcommittee, 
     which I chair, Secretary of Commerce John Bryson noted that 
     the ``Commerce Department has been very focused on Huawei.''
       Secretary Bryson told the panel ``I think you're right in 
     characterizing that as a considerable challenge to our 
     country. It appears that Huawei has capabilities that we may 
     not fully detect to divert information. It's a challenge to 
     our country . . . we have taken some steps to not have Huawei 
     advance yet further in our country but the reality is in the 
     market--they are advancing further so we need to address that 
     further.''
       Also noteworthy is that shortly after Secretary Bryson's 
     testimony before the CJS subcommittee, Australia announced 
     that is has banned Huawei from bidding to help build a 
     nationwide high-speed Internet network due to concern about 
     cyber attacks traced to China. Australia's actions follow 
     several similar moves by the U.S. government to block Huawei 
     access to American networks.
       In 2009, The Washington Post reported that the National 
     Security Agency ``called AT&T because of fears that China's 
     intelligence agencies could insert digital trapdoors into 
     Huawei's technology that would serve as secret listening 
     posts in the U.S. communications network. In 2010, then-
     Commerce Secretary Locke called Sprint CEO Dan Hesse to raise 
     concerns about Huawei, which ultimately resulted in Sprint 
     choosing not to use Huawei equipment.
       These moves should not be surprising given Huawei's long-
     documented deep ties to the Chinese government and the 
     Peoples Liberation Army. According to a 2005 report by the 
     RAND Corporation, ``both the [Chinese] government and the 
     military tout Huawei as a national champion,'' and ``one does 
     not need to dig too deeply to discover that [many Chinese 
     information technology and telecommunications firms] are the 
     public face for, sprang from, or are significantly engaged in 
     joint research with state research institutes under the 
     Ministry of Information Industry, defense-industrial 
     corporations, or the military.''
       The U.S. business community also is concerned about Huawei. 
     On April 6, The Wall Street Journal reported that ``Cisco 
     Systems Inc. Chief Executive John Chambers identified Huawei 
     Technologies Co. as its toughest rival, stating that the 
     Chinese company doesn't always `play by the rules' in areas 
     such as intellectual property protection and computer 
     security . . . he suggested that, [unlike Huawei], Cisco is 
     considered trustworthy by governments around the world.''
       It's not just Huawei's longstanding and close connections 
     to Chinese intelligence that is troubling. Huawei has also 
     been a leading supplier of critical telecom services to some 
     of the worst regimes around the world. Last year, The Wall 
     Street Journal reported that Huawei ``now dominates Iran's 
     government-controlled mobile-phone industry . . . it plays a 
     role in enabling Iran's state security network.'' And given 
     the president's April 23 executive order addressing entities 
     that are providing Iran and Syria with technologies to 
     repress their people, I would think representing Huawei would 
     give you further pause.
       For these reasons, I urge you to reconsider your firm's 
     relationship with Huawei. I think you would agree that Sidley 
     Austin's reputation and integrity is worth far more than its 
     contract with a state-directed company like Huawei.
       Best wishes.
           Sincerely,


                                                Frank R. Wolf,

     Member of Congress.
                                  ____



                                            Sidley Austin LLP,

                                   Washington, DC, April 27, 2012.
     Re Huawei

     Hon. Frank R. Wolf,
     Chairman, Commerce-Justice-Science Subcommittee, Washington, 
         DC.
       Dear Congressman Wolf: Thank you for your letter of April 
     25, 2012. We understand your concerns and appreciate your 
     bringing them to the firm's attention.
           Sincerely,
                                               Carter G. Phillips,
     Managing Partner.
                                  ____



                                     House of Representatives,

                                   Washington, DC, April 30, 2012.
     Mr. Carter G. Phillips,
     Managing Partner, Sidley Austin LLP, Washington, DC.
       Dear Mr. Phillips: Last week, I wrote you sharing concerns 
     about your firm's representation of Chinese telecom firm 
     Huawei. This company is of great concern to the U.S. national 
     security community due to its well-

[[Page 6819]]

     documented ties to the People's Liberation Army and continued 
     questions about the integrity of its products.
       Although Huawei generally dismisses all legitimate 
     criticisms of its ties to the Chinese government as ``tired 
     disinformation,'' I thought you should be aware that just 
     last week the House Armed Services Committee singled out the 
     threat from Huawei by name in its FY 2013 National Defense 
     Authorization Act.
       According to the committee report, the committee is 
     concerned about the supply chain threat from Chinese telecom 
     firms, ``specifically Huawei and ZTE Corporation, have been, 
     and are likely to continue to provide billions of dollars in 
     Chinese Government support. The report also stated that these 
     firms have been blocked from certain deals with U.S. firms 
     because of national security concerns.'' I have enclosed a 
     copy of this section from the report for your reference. 
     There should be no question that the national security 
     community actively considers Huawei a serious concern.
       Perhaps this is due, in part, to Huawei's longstanding 
     history of supporting America's greatest adversaries--some of 
     the most repressive and brutal regimes in modern history--
     including the Taliban regime in Afghanistan, Saddam Hussein 
     regime in Iraq and the current regime in Iran.
       Through Huawei, China exports its repressive technologies 
     to likeminded governments. An October 27, 2011, Wall Street 
     Journal piece reported that the Chinese telecom giant Huawei 
     ``now dominates Iran's government-controlled mobile-phone 
     industry . . . it plays a role in enabling Iran's state 
     security network.''
       Respected national security reporter Bill Gertz also 
     recently reported that Huawei has also been ``linked to 
     sanctions-busting in Saddam Hussein's Iraq during the 1990s, 
     when the company helped network Iraqi air defenses at a time 
     when U.S. and allied jets were flying patrols to enforce a 
     no-fly zone. The company also worked with the Taliban during 
     its short reign in Afghanistan to install a phone system in 
     Kabul.'' I have also enclosed a copy of this article.
       How can an American firm like Sidley Austin represent a 
     company that has provided our enemies with equipment? How 
     does Sidley Austin reconcile working for a company that is 
     empowering the world's worst governments to monitor and 
     repress their own people? Certainly this must give you pause.
       Huawei is believed to receive billions of dollars in 
     subsidies and assistance from the Chinese government--the 
     same government that is an equal opportunity oppressor of 
     people of faith. Catholic bishops, Protestant house church 
     leaders and Tibetan Buddhist monks and nuns are routinely 
     harassed, imprisoned and placed under house arrest. China 
     maintains an extensive system of slave labor camps as large 
     as that which existed in the former Soviet Union.
       The 2010 Nobel Prize recipient Liu Xiaobo still languishes 
     in prison to this day. China's abysmal human rights record 
     has been thrust into the international spotlight with the 
     courageous escape last week of Chen Guangcheng, the blind 
     lawyer activist who, after serving several years in prison on 
     trumped up charges, had been confined to a virtual prison in 
     his home.
       According to your Web site, Sidley Austin's mission is ``to 
     adhere to the highest ethical standards.'' Representing a 
     firm with Huawei's record certainly doesn't live up to your 
     stated mission.
       Again, I urge you to reconsider your firm's representation 
     of Huawei, Rest assured, I will continue to inform my 
     colleagues of Huawei's unrepentant record of supporting some 
     of the world's most brutal regimes--and America's greatest 
     adversaries--and the U.S. national security community's 
     continued concern about their threat to our supply chain.
       Best wishes.
           Sincerely,
                                                    Frank R. Wolf,
                                               Member of Congress.

                        Other Defense Activities


   Review of the Supply Chain Security and Integrity of the Nuclear 
                            Weapons Complex

       The committee is concerned by the findings of the 
     Government Accountability Office (GAO) in its report, ``IT 
     Supply Chain: National Security-Related Agencies Need to 
     Better Address Risks'' (GA0-12-361). The report stated that, 
     ``Although four national security-related departments--the 
     Departments of Energy, Homeland Security, Justice, and 
     Defense--have acknowledged these threats, two of the 
     departments--Energy and Homeland Security--have not yet 
     defined supply chain protection measures for department 
     information systems and are not in a position to have 
     implementing procedures or monitoring capabilities to verify 
     compliance with and effectiveness of any such measures.''
       The committee is also aware that its ``2011 Report to 
     Congress,'' the U.S.-China Economic and Security Review 
     Commission detailed specific supply chain threats originating 
     from firms linked to the Government of the People's Republic 
     of China. These firms, specifically Huawei and ZTE 
     Corporation, have been, and are likely to continue to provide 
     billions of dollars in Chinese Government support. The report 
     also stated that these firms have been blocked from certain 
     deals with U.S. firms because of national security concerns.
       The committee is concerned by these developments as well 
     and the information technology (IT) chain problems reported 
     by GAO. Therefore, the committee directs the Secretary of 
     Energy, in consultation with the National Counter 
     Intelligence Executive, to provide a report to the 
     congressional defense committees by August 31, 2012, on the 
     supply chain risks to the Department of Energy. The report 
     should address the following: (1) IT supply chain 
     vulnerabilities of the Department of Energy, with special 
     attention paid to the laboratories and plants of the national 
     nuclear weapons enterprise; (2) Evaluate whether the 
     Department of Energy, or any its major contractors, have a 
     supply chain that includes technology produced by Huawei or 
     ZTE Corporation; and (3) A plan for implementation of the 
     recommendations of the GAO report referenced above.
       Finally, the committee is aware that section 806 of the Ike 
     Skelton National Defense Authorization Act for Fiscal Year 
     2011 (Public Law 111-383) provided the Department of Defense 
     the authority to protect its supply chain. The committee is 
     also aware that section 309 of the Intelligence Authorization 
     Act for Fiscal Year 2012 (Public Law 112-87) provided the 
     intelligence community similar authority. The committee 
     further directs the Secretary of Energy to include in the 
     report an assessment of any concerns may have about providing 
     similar authority in order to protect the Department of 
     Energy's IT supply chain.
                                  ____



                                     House of Representatives,

                                      Washington, DC, May 8, 2012.
     Ms. Samantha Power,
     Director For Multilateral Affairs, National Security Council, 
         Washington DC 20500
       Dear Ms. Power, I write regarding the administration's 
     recently released initiative on atrocities prevention. As you 
     know, this is an issue about which I care deeply and I am 
     encouraged to see these matters prioritized. Moving forward, 
     it will be essential to ensure that these efforts don't 
     simply result in additional monitoring, but rather are the 
     impetus for action in the face of grave human rights abuses.
       My reason for writing is two-fold. I noted with interest 
     President Obama's recent executive order authorizing 
     sanctions and visa bans against those who commit or 
     facilitate grave human rights abuses by means of facilitating 
     information technology capabilities in Syria and Iran. It is 
     my understanding that the sanctions are intended to impact 
     not just the regimes in question, but the companies that 
     enable them by providing technology which is ultimately used 
     to oppress and brutalize the citizens of these lands. This 
     executive order is an important first step, but I 
     respectfully urge the administration to broaden the scope to 
     include countries such as China which has a long and well-
     established track record of using technology to repress and 
     even imprison its citizens.
       Further, I urge the administration to examine whether 
     Huawei Technologies, a Chinese telecom firm with deep 
     connections to the People's Liberation Army (PLA) and Chinese 
     intelligence, should be among the companies sanctioned under 
     this new executive order. As you may know, Huawei has been a 
     leading supplier of critical telecom services to some of the 
     worst regimes around the world, including Iran. On October 
     27, 2011, the Wall Street Journal reported that Huawei ``now 
     dominates Iran's government-controlled mobile-phone industry 
     . . . it plays a role in enabling Iran's state security 
     network.'' The article continued, ``This year Huawei made a 
     pitch to Iranian government officials to sell equipment for a 
     mobile news service on Iran's second-large mobile-phone 
     operator, MTN Irancell. According to a person who attended 
     the meeting, Huawei representatives emphasized that, being 
     from China, they had expertise censoring the news.''
       You may be aware that Huawei's actions in Iran appear to be 
     consistent with its practice, Over many years, of doing 
     business with rogue regimes. In a March 13, 2012 Washington 
     Free Beacon piece, respected national security reporter, Bill 
     Gertz, wrote, ``Huawei has been linked to sanctions-busting 
     in Saddam Hussein's Iraq during the 1990s, when the company 
     helped network Iraqi air defenses at a time when U.S. and 
     allied jets were flying patrols to enforce a no-fly zone. The 
     company also worked with the Taliban during its short reign 
     in Afghanistan to install a phone system in Kabul.''
       While there have been initial news reports suggesting that 
     Huawei, in the face of public scrutiny and criticism, may be 
     scaling back its operations in Iran, the Wall Street Journal 
     also reported on December 10, 2011, that ``Huawei, which has 
     about 1,000 employees in Iran, said it plans to continue 
     servicing its existing Iranian contracts.''
       In light of these realities, I respectfully request that 
     the newly created Atrocities Prevention Board to take up 
     these matters at the earliest possible time. I look forward 
     to your prompt response.

[[Page 6820]]

       Best wishes.
           Sincerely,
                                                    Frank R. Wolf,
     Member of Congress.

                          ____________________