Huawei expands its power with bribery and corruption

Khabarhub

October 28, 2019

10 MIN READ

Huawei expands its power with bribery and corruption
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WASHINGTON: Chinese telecom behemoth, Huawei Technologies company ignores the law. Obviously, it was caught on multiple accidents of bribery.

Nowadays, Huawei’s involvement in corrupt business dealings is a real threat to national security.

In Algeria, the company was banned from bidding for public contracts because of its executive, who was convicted of bribery.

Huawei probed over allegations of bribery in Zambia where it tried to involve an expensive contract with the goal to build cell towers in rural areas.

In the Solomon Islands, it was caught on offering millions of dollars to the ruling party in exchange for an undersea fiber-optic cable contract. And besides this, there were half a dozen others accuses in recent years.

Huawei is facing scrutiny from Western nations, it is prosecuted on allegations of intellectual property theft and espionage Voanews.com reported.

As it poses a national security threat, the U.S., Australia and New Zealand have banned the company from building new, state of the art 5G telecom networks. Other Western countries are debating over a similar ban.

Also, there is a suspicion that Huawei and other Chinese telecom equipment providers of tracking forbidden information

Last month the U.S. prosecutors charged the company founded by a former People’s Liberation Army officer with violating U.S. sanctions on Iran, purloining trade secrets from T-Mobile and encouraging its employees to steal intellectual property.

The focus on national security concerns about Huawei has eclipsed a little-reported aspect of the company’s operations: Huawei’s involvement in corrupt business dealings. The company has denied the allegations of corruption and said it has strong safeguards against corporate graft. In a statement on its website, Huawei says it has a “zero-tolerance” policy on graft.

In the last 12 years, Huawei and its smaller Chinese rival ZTE have been “investigated or found guilty of corruption” in as many as 21 countries, according to Andy Keiser, a former House Intelligence Committee professional staffer.

But experts who have studied Huawei’s business practices say the company’s statements are contradicted by its conduct.

“The unfortunate reality of Huawei’s activities on the (African) continent is that they have a proven track record of engaging in corruption and other dodgy business dealings,” said Joshua Meservey, an Africa expert at the Heritage Foundation and author of a recent report on Chinese corporate corruption.

With business operations in more than 170 countries and annual revenues of $108 billion, Huawei is the world’s largest supplier of telecom equipment. Last year, the multinational company beat Apple to become the No. 2 manufacturer of smartphones and tablets in the world.

In December, Huawei’s chief financial officer, Meng Wanzhou, was arrested by Canadian authorities and she is being held for possible extradition to the U.S. for violation of U.S. sanctions on Iran.

Huawei has rejected the charges. In a recent letter to the UK Parliament made public last week, Huawei refuted allegations of espionage, saying if the company engaged “in malicious behavior, it would not go unnoticed – and it would certainly destroy our business.”

In developing countries in Asia and Africa, the company’s corrupt business practices are a matter of great concern among industry officials and civil society activists.

In the last 12 years, Huawei and its smaller Chinese rival ZTE have been “investigated or found guilty of corruption” in as many as 21 countries, according to Andy Keiser, a former House Intelligence Committee professional staffer.

These include a dozen African countries such as Algeria and Ghana as well as the Philippines, Malaysia, Norway, Papua New Guinea, Mongolia, the Solomon Islands and China itself, according to Keiser.

“ZTE and Huawei have developed dubious reputations around the world,” Keiser testified before Congress last June.

The transaction cost of Huawei’s corrupt business deals runs in the billions. RWR Advisory Group, a consulting firm that tracks Chinese investments around the world, estimates that Huawei has entered into more than $5 billion worth of business deals involving allegations of bribery and corruption.

The charges against Huawei range from outright bribery to making illegal donations to political parties in exchange for contracts and other business advantages.

The Algerian case involved an elaborate scheme in which Huawei and ZTE executives allegedly paid $10 million in bribes to a former state telecom operator executive and a businessman in exchange for winning contracts.

In 2012, an Algerian court convicted the former executive and another businessman of receiving bribes. The two Algerians were sentenced to 18 years in prison.

Three executives of the Chinese firms also were tried in absentia and sentenced to 10 years in prison for their role in the scheme.

The government fined Huawei and ZTE and banned them from bidding on public contracts for two years.

In Ghana, Huawei has confronted accusations of illegally funding the ruling party, a charge Huawei and other Chinese companies have faced in other countries.

In 2012, an opposition group disclosed what it claimed was evidence that Huawei had made illegal campaign contributions to the ruling National Democratic Congress in exchange for a $43 million tax exemption.

Poland has arrested a Chinese employee of Huawei and a Polish national involved in cyber-business on allegations of spying, Polish state media has reported, deepening the controversy over Western criticism of the Chinese telecoms company.

US intelligence agencies claim Huawei Technologies Co Ltd is linked to China’s government and its equipment could contain “backdoors” for use by government spies.

The criticism has led several Western countries and businesses to consider whether they should allow Huawei’s equipment to be used in their telecoms networks. This has strained relations with Beijing.

The Polish public television channel TVP said security services had searched the local offices of Huawei, as well as those of the telecoms company Orange Polska, where it said the Polish national works.

China’s foreign ministry said it was greatly concerned by the reports and urged Poland to handle the case justly.

Huawei said: “We are aware of the situation and we are looking into it. Huawei complies with all applicable laws and regulations in the countries where it operates, and we require every employee to abide by the laws and regulations in the countries where they are based.”

Orange Polska said the security agency had on Tuesday gathered materials related to an employee, whom it did not identify. The company added that it did not know if the investigation was linked to the employee’s professional work and it would continue to cooperate with authorities.

TVP said the security services also searched the premises of the Office of Electronic Communications, but the Polish telecoms regulator denied this.

The west’s security concerns about Huawei and the Chinese telecoms equipment company ZTE Corp center on China’s national intelligence law. Approved in 2017, the law states that Chinese “organizations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work”.

This has raised concerns that Huawei could be asked by the Chinese government to incorporate “backdoors” into their equipment, which would allow Beijing access, for spying or sabotage purposes. Some experts also fear Chinese intelligence agencies may develop a way to subvert Huawei’s equipment.

Maciej Wąsik, the deputy head of Poland’s special services, told the state news agency PAP: “The Chinese national is a businessman working in a major electronics company … the Pole is a person known in circles associated with the cyber business.”

The arrested pair will be held for three months, PAP reported, citing the spokesperson for Poland’s head of special services.

TVP said the Polish national was a former agent of the internal security agency. The agency did not immediately respond to Reuters’ requests for comment.

Alliance for Accountable Governance (AFAG) produced invoices and other documents showing the Chinese telecom company had paid for millions of dollars worth of campaign paraphernalia for the ruling party’s 2012 election campaign.

In return, the group alleged, the government awarded “one of the juiciest contracts to be doled out by the government” – a $150 million contract to build an e-government platform.

In the Solomon Islands, Huawei has faced similar accusations. In 2017, a Parliamentary committee accused the government of awarding Huawei a contract to build a submarine fiber optic link to Australia after Huawei offered a $5.25 million campaign donation to the ruling party.

“The committee is of the view that this is the main reason for the government to bypass procurement requirements in favor of the company Huawei,” a parliamentary report said.

(with inputs from Agencies)

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