National Defense Authorization Act for Fiscal Year 2019

Floor Speech

THE PRESIDING OFFICER. Without objection, it is so ordered.

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Mr. COTTON. The Senator and I have done a lot of work together on a an issue that is a genuine threat to our national security; that is, the threat of Chinese telecom companies stealing our technology, infiltrating our telecom networks, and hacking into the data not just of our government or our military but also private citizens.

Earlier this year, I asked the Directors of all four major intelligence agencies--the CIA, the NSA, the FBI, and the DIA--if they would use products made by Huawei or ZTE. None of them raised their hand. I said: Well, that may be unfair. You are the leader of an American intelligence agency. What about members of your family, your neighbors, your friends, church members? Not a single one of them recommended that they would use a Huawei or ZTE product.

I hope all of you up in the Galleries are not using a Huawei or ZTE product. If you are, you might want to go out and buy a different one, and that is because these companies are dangerous to our national security and to your privacy.

Huawei and ZTE are nothing more than extensions of the Chinese Communist Party. Huawei's CEO was an engineer for the People's Liberation Army. The company's livelihood consists largely of a steady stream of government contracts, and its greatest claim to fame is shamelessly stealing the secrets of American companies. That is why it is under investigation by the Department of Justice for that and for violating sanctions against Iran. ZTE is no better. They broke our laws by doing business with North Korea and Iran and then lied about it to U.S. investigators. That makes it a repeat offender.

That is why General Nakasone, the new Director of the NSA, committed at his confirmation hearing to educating all of our allies about the threat that companies like Huawei and ZTE pose to the civilized world.

Given this history, I suggest it would be reckless to let Huawei and ZTE infiltrate their products into our country's critical communications infrastructure. Whether it is routers, switches, or any other kind of equipment, allowing them to do so would give the Chinese Government a backdoor into our first responder networks, our electric grid, and a lot more than that. That is why the Federal Communications Commission proposed a rule to prohibit the use of the Universal Service Fund to buy equipment from these firms and why I and a number of other Members have urged the Department of Agriculture to do the same thing with our U.S. funds.

These companies have proven themselves to be untrustworthy, and at this point, I think the only fitting punishment would be to give them the death penalty; that is, to put them out of business in the United States. The only reason Huawei is the second largest smartphone maker in the world and ZTE the fourth is because we have let them run wild for too long. We have given them access to our markets even as they have broken our laws and abused the rights of our citizens. If we refuse to do business with them, things would change very quickly, believe me.

For these reasons, Senator Van Hollen and I offered our amendment that was adopted earlier this week. It would prohibit all Federal agencies from buying any kind of equipment or services from Huawei, ZTE, or any related companies. It would also prohibit any American company from receiving U.S. taxpayer dollars in the form of grants or loans should they use Huawei or ZTE products. Finally, our amendment would reinstate the original denial order for the purchase of American goods and services on ZTE to hold it accountable for breaking our laws.

I would say that I don't see this amendment as contradictory or harmful to the administration's strategy when it comes to China and North Korea. If anything, I think it is complementary. This administration, after all, originally imposed the death penalty in the form of a denial order against ZTE. After Xi Jinping pleaded for life without parole, so to speak, the administration agreed to a very tough series of actions.

This is the first real, concrete action the United States has taken against Huawei and ZTE, but I and the Senators in this Chamber believe the death penalty is the appropriate penalty. Just as our maximum pressure campaign brought North Korea to the table, strengthening our sanctions on ZTE will show China that we are finally serious about stopping its theft of our intellectual property and preventing it from infiltrating our communications network and from violating the privacy rights of our citizens.

If we weaken sanctions against ZTE, we will signal to China and to the rest of the world that they can act contrary to our sanctions with impunity. That is a message we cannot afford to send, and that is why I am pleased the Senate agreed to include our amendment in the National Defense Authorization Act.

I would like to conclude by turning to the Senator from Maryland, with whom I have worked in such a constructive fashion on this matter-- not only on this legislation but also in the Senate Banking Committee-- and ask him how he sees the threat posed by Huawei, ZTE, and companies like them.

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Mr. COTTON. Mr. President, I thank the Senator from Maryland for his remarks and once again for working together in such a constructive fashion. As he said, we have had a number of Senators from both parties sponsoring our amendment. I think that reflects the concern that both Republicans and Democrats alike have about the threat that Chinese telecom companies like Huawei and ZTE pose to our national security and to our citizens' privacy. Our amendment is an important first step to ensure that they are not doing business with the Federal Government or any firms that are relying on U.S. taxpayer dollars and also that ZTE in particular faces the stiffest penalties possible for its recidivist behavior in violating sanctions and lying to U.S. investigators.

We still have more to do, and I suspect we will be back together either in the Senate Banking Committee or on the Senate floor to try to protect our citizens' safety and their privacy from companies that are in essence arms of the Chinese Communist Party. We will be working together in the coming months, as this bill moves forward to be reconciled with the House of Representatives, to ensure that this very important language stays in the bill in its final version and then gets passed into the law.

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Mr. COTTON. I couldn't agree more with that. In fact, the House version of the National Defense Authorization Act does include language that is similar, not identical, to our language. To my knowledge, it passed without any objection in the House from either Democrats or Republicans--again, just showing how widespread our concern in Congress is with Chinese telecom companies, like Huawei and ZTE.

So I am confident that working together with the Senator from Oklahoma, the Senator Rhode Island, and our House counterparts the final version of this bill, which we will vote on later in this year, will have very tough language that will move us in the right direction, protecting our citizens' safety and privacy.

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