China’s ZTE taps Joe Lieberman for Washington damage control

  • Former US senator and vice-presidential candidate Joe Lieberman has been hired by ZTE to do an ‘independent’ national security assessment of its products
  • He is the third US lawmaker to work on ZTE’s behalf in Washington
PUBLISHED : Saturday, 15 December, 2018, 6:41am
UPDATED : Saturday, 15 December, 2018, 4:19pm

This story is published in a content partnership with POLITICO. It was originally reported by Daniel Lippman and Steven Overly on on December 13, 2018.

Chinese telecom giant ZTE is tapping a deeply connected Washington insider, former US Senator Joe Lieberman, as it tries to fend off ongoing concerns that it poses a threat to US national security.

The company – the subject of a heated congressional battle earlier this year – has hired Lieberman to conduct an “independent” national security assessment of its products, the former senator told POLITICO.

“There are obviously still concerns about the safety of their products or the extent to which their products could be used to compromise American security in any way or even individual security,” Lieberman said in an interview, adding that ZTE has “decided to really try to get ahead of those concerns and be in a position to answer them.”

US officials have ramped up warnings that ZTE, which produces networking equipment as well as smartphones and tablet computers, provides opportunities for Chinese cyber espionage, given its ties to the Chinese government.

Key lawmakers this summer sought to block the company from doing business in the US, but Congress later settled for a ban on ZTE entering into US government contracts, following intervention by President Donald Trump.

Still, US suspicion of ZTE and another Chinese telecoms company, Huawei, is widespread. Canada arrested the chief financial officer of Huawei this month at the request of American officials who contend she violated US sanctions against Iran. The action strained relations between the US and China at a time when the countries are trying to de-escalate their trade war.

Timeline: The Chinese telecom giants in cross hairs over Iran sanction violations

Lieberman is the third former US lawmaker working on ZTE’s behalf in Washington. The company has retained the lobbying services of two other former lawmakers, former Minnesota Senator Norm Coleman and former Nebraska Representative Jon Christensen.

Bryan Lanza, a former deputy communications director for the Trump campaign, also did work for ZTE earlier this year through Mercury Public Affairs.

ZTE paid the Washington law firm Hogan Lovells nearly US$2 million during the second and third quarters of the year.

Lieberman plans to register as a lobbyist for ZTE, but he said he won’t actually lobby, instead focusing on his assessment for the company.

Still, the former senator said he’s already “made a bunch of phone calls” and visited Capitol Hill twice in the last two weeks to meet with members of Congress who have spoken out against ZTE or are leaders of relevant committees.

He declined to say which lawmakers, but Republican Senator Marco Rubio and Democrat Senator Chris Van Hollen, two vocal ZTE critics, have spoken with him, according to their offices.

China’s ZTE cheated on deal with US, senators tell White House

Lieberman said he also hopes to talk to officials at the Commerce, Defence and Homeland Security departments.

“I don’t expect at any point, certainly in this phase, to be giving ZTE’s point of view,” he said. “I’m really supposed to be listening and asking questions.”

He said he wants to determine what can be done to “raise the level of trust in ZTE because they’ve got plenty of lobbyists and they don’t need me to do that, and I didn’t particularly want to do that”.

Lieberman, currently senior counsel in New York at the law firm Kasowitz Benson Torres, will report back to ZTE in roughly six months about what he’s found.

After he finishes his investigation, he said the company could keep him on to develop a programme for the company to “try to reassure both their consumers in America and also obviously the US government”.

During his time in the Senate, Lieberman, a Connecticut independent, chaired the Homeland Security and Governmental Affairs Committee and co-sponsored legislation to create DHS.

Japan to ban Huawei, ZTE from government contracts

Toward the end of his tenure, he and Republican Senator Susan Collins championed proposed legislation to toughen cybersecurity protections for key US infrastructure.

A ZTE spokesperson confirmed the Lieberman hire, adding in a statement, “ZTE initiated this fact-finding mission as part of its comprehensive effort to better understand and address any national security concerns of its customers, Congressional and Executive Branch officials in the US, and governments across the globe.”

The Commerce Department reimposed a seven-year ban on ZTE earlier this year for violating US sanctions against North Korea and Iran, but Trump, in the midst of trade negotiations with China, took aim at his own administration’s decision.

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” Trump tweeted on May 13. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”

The Commerce Department later lifted the ban, with ZTE agreeing to pay a US$1 billion fine, replace its management team, and allow the US to assign compliance officers to prevent future violations.

China’s ZTE gets operation back on track while global backlash mounts

Trump’s meddling sparked bipartisan resistance in the Senate with Minority Leader Chuck Schumer as well as Republicans like Rubio arguing the company presents a national security threat.

The Senate voted to revive the ban as part of a defence bill, but the prohibition later got softened when the legislation was reconciled with the House. In the end, Congress prevented ZTE from selling to government agencies but allowed its commercial business in the US to continue.