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Cotton Warns about the Threat of Huawei and ZTE

June 13, 2018

I ask consent to have a colloquy with the senator from Maryland.

Thank you, Mr. President. The Senator and I have done a lot of work together on an issue that is a genuine threat to our national security. And that's 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. And I said, well, that may be unfair, you are the leader of an American intelligence agency. What about members of your family, or your neighbors, your friends, church members. Not a single one of them recommended that they use a Huawei or ZTE product. I hope all of you up in the gallery are not using a Huawei or ZTE product, if you are, you might want to go out and buy a different one.

And that's 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's why it's under the investigation by the Department of Justice for that and for violating sanctions against Iran.

And ZTE is no better. It broke our laws by doing business with North Korea and Iran and it lied about it to U.S. investigators. That makes it a repeat offender. That's 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 that it would be reckless to let Huawei and ZTE infiltrate their products into our country's critical communications infrastructure. Whether it's routers or 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's why the Federal Communications Commission proposed a rule to prohibit the use of Universal Service Funds 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 RUS 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 though is because we've let them run wild for too long. We've given them access to our markets even as they've broken our laws and abused the rights of our citizens. But if we refuse to do business with them, things would change very quickly, believe me.

Which is why Senator Van Hollen and I introduced 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. And finally, our amendment would reinstate the original denial order for the purchase of American goods and service on ZTE to hold it accountable for breaking our laws.

And I would say I don't see this amendment as contradictory or harmful to the administration's strategy when it comes to China or North Korea. If anything, I think it's 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, 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's a message that we cannot afford to send and that's why I'm pleased that the Senate agreed to include our amendment in the National Defense Authorization Act.

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