A lawsuit filed by a former Huawei employee against the Chinese telecom firm is adding some fuel to U.S. government fears that the company is spying on its peers and therefore a security threat.
According to a report in the East Bay Times, Jesse Hong, a former software architect for Huawei subsidiary Futurewei Technologies, has filed a lawsuit against Huawei in Santa Clara County Superior Court. The lawsuit claims that in 2016 Huawei instructed Hong and another Futurewei employee to attend Facebook’s Telecom Infra Project Summit at the company’s headquarters in Menlo Park, California, but to register for the meeting using fake U.S.-company names.
In the lawsuit, Hong claims that Facebook had originally denied Huawei’s request to attend the closed-door meeting, so Huawei concocted this scheme to get entry into the event. Hong said that he refused to comply with those instructions, but two Huawei employees, including his Futurewei manager Sean Chen, attended the TIP Summit and then reported back to Huawei product teams in China about the plans of Huawei competitors.
Hong said he reported his concerns about this and other problems that he had with Chen to Huawei’s HR department. He was fired by the company a few days later.
A Huawei spokesperson issued the following statement regarding the lawsuit: “Huawei is aware of the lawsuit in question. The allegations arose from a labor dispute and are completely groundless. We will vigorously defend the company’s interests. Compliance with local laws and regulations, as well as international conventions, is key to Huawei’s operational compliance worldwide. Every employee is expected to adhere to applicable laws, regulations, and business ethics in the countries where we operate. These requirements are clearly set out in Huawei’s Employee Business Conduct Guidelines as a condition of ongoing employment.”
Huawei has battled accusations of spying against its competitors and the U.S. government for several years, but 2018 has been a particularly rough year for the company. In February six top U.S. intelligence chiefs — including the heads of the CIA, FBI, and the NSA — told the Senate Intelligence Committee that they would advise Americans to not use the products and services of Huawei and fellow Chinese vendor ZTE. In addition, U.S. legislators have introduced bills in both the House and Senate that would prevent the government from buying or using telecommunications equipment from Huawei or ZTE. And in April, FCC Chairman Ajit Pai issued a statement, proposing a ban on the use of money from the FCC’s $8.5 billion Universal Service Fund to purchase equipment or services from companies that pose a national security threat to U.S. communications networks.
ZTE in the U.S.
But things may be looking up for fellow Chinese firm ZTE. The Wall Street Journal reported today that the company is ready to resume its business with U.S. suppliers after reaching an agreement with the Commerce Department in which ZTE will pay $400 million into an escrow account as part of a penalty for violations. Those violations were not related to spying but for failure to honor U.S. sanctions and sell equipment to North Korea and Iran.
According to a Wall Street Journal article in April citing unidentified sources, Huawei is also under investigation by the U.S. Department of Justice for breaking sanctions and selling equipment to Iran. However no further details on that investigation are known.