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White House Report: Huawei dangerous, but not spying

updated 06:40 pm EDT, Wed October 17, 2012

Flaws and 'back doors' still pose risks to US infrastructure

A White House-ordered review of security risks posed by Chinese companies to US telecommunications companies completed earlier this year found no clear evidence that Huawei Technologies is actively spying for China. Instead, the probe found that relying on Huawei was risky for non-espionage reasons, such as the presence of vulnerabilities that hackers could exploit. These previously classified findings support parts of the U.S. congressional report last week that warned US telecommunication companies of the risks of using Huawei and ZTE as suppliers.

The White House report does not address whether the vulnerabilities found in Huawei equipment were placed deliberately, or if any new intelligence about the companies surfaced after the inquiry ended. "We knew certain parts of government really wanted" espionage evidence, said a source familiar with the original report. "We would have found it if it were there."

The House Intelligence Committee's report did not present solid evidence that either Huawei or ZTE have engaged in spying for the Chinese government, although it said a classified annex to the report provided "significantly more information adding to the committee's concerns" about the risk to the United States.

Ex-Chinese Army officer and Huawei founder Ren Zhengfei rejected the report from the House as inaccurate. "Huawei is a $32 billion independent multinational that would not jeopardize its success or the integrity of its customers' networks for any government or third party. Ever," Huawei's U.S. spokesman Bill Plummer said on Wednesday.

One government researcher who helped conduct classified U.S. government research on Huawei routers and switches in 2007 reported that he had found "back doors" that his team believed were deliberately placed and not a result of sloppy programming. He said these avenues of attack could enable attackers to install malicious software that would make critical government networks inoperable, allow hackers to gain entry into highly classified systems and enable them to spy on all traffic.

The US market accounts for only single-digit percentages of both Huawei and ZTE's overall revenues, and that mostly from mobile phone sales. Huawei has been looking to expand its operations in the US market, hoping to sell US carriers more telecommunications equipment.

ZTE, meanwhile, has been feeling negative impacts from US suspicion. That company is under investigation by the FBI for alleged sales of embargoed equipment to Iran. The investigation, along with the soft global economy, contributed to ZTE posting a $279 million loss for the first three quarters of this year.

By Electronista Staff
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