National Defense Authorization Act for Fiscal Year 2019

Floor Speech

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Mr. VAN HOLLEN. Mr. President, I want to start by thanking my colleague, the Senator from Arkansas, for his longtime leadership on a range of important national security issues, including his attention and focus on the threat posed by Huawei and ZTE, which, as he explained, are two Chinese telecommunications companies that pose a risk not just to our security but also to the privacy of American citizens.

This is a threat that is here and now, and it is not one we have not been aware of for a long time. I think it is important to look back because this didn't sneak up on us overnight.

If you go back to the year 2012, the House Intelligence Committee sounded the alarm on Huawei and ZTE in a bipartisan report that stated that ``China has the means, opportunity, and motive to use telecommunications companies for malicious purposes'' and that ``based on available and classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems.''

That was a House Intelligence Committee report in the year 2012. Since then, the evidence has grown even stronger.

We know that the Government of China exercises significant control over its telecommunications firms and that ZTE and Huawei have close and very longstanding ties to the government. We also know that China is one of the world's most active perpetrators of economic espionage and cyber attacks in the United States.

In 2015, the FBI issued a report on Huawei making it clear that the Government of China relies on signals intelligence to spy on American citizens. American intelligence officials have long warned that Beijing could harness this technology to steal data, eavesdrop on conversations, or carry out cyber attacks.

We had testimony recently--in February--from the leaders of the top U.S. intelligence agencies. Senator Cotton referenced the testimony of the FBI Director and others, and I want to expand on the testimony of FBI Director Chris Wray, who said:

We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks. That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.

That is why part of this amendment contains the very important provision that the Senator from Arkansas mentioned that would prohibit U.S. taxpayer dollars from being spent to purchase any equipment from Huawei or ZTE. The Pentagon recently prohibited the sale of these devices on U.S. military bases. The FCC has also proposed steps to discourage American companies from using products from Huawei and ZTE. It stands to reason--and it is totally consistent with that sentiment-- that we make it clear that U.S. Federal Government agencies should not be purchasing this equipment that threatens our national security.

One of those companies--ZTE in specific--not only represents the kind of threat that we have been discussing but also has been a repeated and flagrant violator of U.S. law. They were caught a number of years ago for cheating, and instead of coming clean, they tried to cover it up, cheated again, and they were caught again.

Here is what the Department of Commerce said in its report about ZTE just this past April. It said that they engaged in ``a multi-year conspiracy to violate the U.S. trade embargo against Iran to obtain contracts to supply, build, operate and maintain telecommunications networks inside Iran using U.S. original equipment'' and that ZTE was ``illegally shipping telecommunications equipment to North Korea in violation of the Export Administration Regulations.''

The Commerce Department went on to explain that ZTE--finally, after getting caught multiple times--``admitted to engaging in an elaborate scheme to hide the unlicensed transactions from the U.S. Government by deleting, destroying, removing, or sanitizing materials and information.''

In fact, it turns out that they were violating our sanctions regime against not only Iran and North Korea but also Sudan, Syria, and Cuba. In fact, they had elaborate flowcharts at ZTE showing exactly how they were going to do this. Then, when we confronted them and they said they were going to come clean, instead they rewarded their top executives with bonuses. That is why, when the Secretary of Commerce issued the sanctions and imposed the blocking order on the sale of U.S. telecommunications components to ZTE in April, he explained that the message ZTE sent from the top was essentially to evade and then lie about what they were doing with respect to U.S. sanctions.

Well, it is very important that we send a message, and we need to send a message consistent with what the Secretary of Commerce did last April. It is very important, as the Senator from Arkansas said, that we let countries know we mean what we say. They are a flagrant violator of those sanctions laws, and we can't let them off the hook with a slap on the wrist because if we do that, it will undermine our credibility with respect to our sanctions on North Korea, which are very important in focusing the attention of North Korea on the goal of denuclearizing the Korean Peninsula. It will send the wrong message to countries around the world that if we catch you and you cheat again and we catch you, you can just cut a deal that ends up being a slap on the wrist.

That is why I am very pleased to join with the Senator from Arkansas in offering this bipartisan amendment. In addition to the two of us, there are a number of other Senators--a bipartisan group--supporting this legislation. I am glad it has been incorporated in the legislation.

With that, I want to turn it back over to the Senator from Arkansas and ask him whether he has any further thoughts on this very important issue before us today.

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Mr. VAN HOLLEN. Mr. President, if I may, I just want to emphasize that final point made by the Senator from Arkansas, which is that it is going to be very important that we keep this provision in the Defense authorization bill as it winds its way through the process. I am confident that there is a bipartisan commitment to doing exactly that because we cannot back away at this point. Backing away would send a very bad signal to ZTE and Huawei and other violators of our sanctions or any of our other adversaries who are considering violating U.S. law and U.S. sanctions.

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