The Huawei Technologies Co. logo. | Tomohiro Ohsumi/Getty Images The indicted defendants include Huawei and four subsidiaries, as well a...
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| The Huawei Technologies Co. logo. | Tomohiro Ohsumi/Getty Images |
The indictment accuses Huawei of building its empire on the backs of other companies, including six U.S. firms, by copying intellectual property and then selling it in products around the world. From as early as 2000, the DOJ said the company stole source code for internet routers, misappropriated robotic technology and stole proprietary information about cellular antennas.
In some instances, Huawei leaned on academics to steal trade secrets or provided financial rewards to employees who did its bidding, according to the indictment, which names Huawei and its Chinese subsidiaries, as well as two subsidiaries based in the U.S. Executives then downplayed the extent of the theft or their role in authorizing it when confronted by business partners and law enforcement, the government asserts.
"This new indictment is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement," Huawei spokesperson Glenn Schloss said in a statement."These new charges are without merit and are based largely on recycled civil disputes from last 20 years that have been previously settled, litigated and in some cases, rejected by federal judges and juries," he said. "The government will not prevail on its charges, which we will prove to be both unfounded and unfair."
Yet lawmakers were quick to praise the DOJ's crackdown on Huawei as the company has also taken knocks on Capitol Hill from both Republican and Democrats who say it poses a national security threat to the U.S. "The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law," Senate Intelligence Committee leaders Richard Burr (R-N.C.) and Mark Warner (D-Va.) said in a joint statement. "Intellectual property theft, corporate sabotage, and market manipulation are part of Huawei's core ethos and reflected in every aspect of how it conducts business."
Sen. Ben Sasse (R-Neb.), a member of the committee, urged DOJ to "nail Chairman Xi’s tech puppet to the wall," in a statement that explicitly called Huawei an extension of the Chinese Communist Party and its leader, Xi Jinping. "These crimes – racketeering, conspiracy to steal trade secrets, and sanctions evasion – are part of Chairman Xi’s strategy to make China the world’s preeminent superpower," he continued. "The United States and our allies have an obligation to stop them.”
The latest charges build on a case that DOJ brought last year that accused the company of financial fraud and violating U.S. trade sanctions against Iran by misleading international banks about its business ties to an affiliate, called Skycom, that was doing business in Iran. The company's chief financial officer, Meng Wanzhou, is fighting extradition to the U.S. from Vancouver, where she was arrested at an airport last year, on related charges. The daughter of Huawei's founder, Ren Zhengfei, Meng is also named in the latest indictment, which could further complicate her ongoing legal battle.
Federal prosecutors also charged Huawei with violating a confidentiality agreement with T-Mobile by photographing and stealing a part of a robot called Tappy that the U.S. mobile carrier developed to test its phones. That case is still winding its way through a Seattle court. Huawei has denied the charges and accused the government of using the courts to pick political fights.
But Huawei has countered with lawsuits of its own. Last year, the company accused the U.S. government of violating its constitutional rights after Congress passed a defense spending bill that expressly prohibited federal agencies and their contractors from purchasing the company's products.
That law is indeed part of the U.S. government broader crusade against Huawei. Lawmakers warn that the company's global footprint provides Beijing with an avenue for spying on foreign governments and citizens — a claim that Huawei has aggressively denied.
“The U.S. believes that China wants to take over the world, and anything ... that they think directly or indirectly helps China, they’re against,” Andy Purdy, Huawei’s chief security officer, said late last month. “And it’s a lot harder to create a technology [sector] industrial policy that helps drive America forward than it is to say, ‘OK, we're going to draw a line in the sand here.'