U.S. escalates against Huawei with racketeering charges
WASHINGTON — The U.S. government has charged Huawei and two of its subsidiaries with federal racketeering and conspiracy to steal trade secrets from American companies, a significant escalation in the Trump administration’s legal fight with the Chinese telecommunications company.
In a federal indictment unsealed on Thursday, the Department of Justice accused Huawei and its affiliates of a “pattern of racketeering activity” and said the companies had worked to steal trade secrets from six unidentified American firms. The stolen information included source code, as well as the manuals for wireless technology.
“The new charges in this case relate to the alleged decadeslong efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business,” the Justice Department said in a news release.
The new charges add more weight to Washington’s pressure campaign against Huawei, which is already barred from buying many American products and is viewed by the Trump administration as a threat to national security. The escalation is also part of a broader attempt by the Trump administration to crack down on what it says is a pattern of Chinese espionage and theft aimed at giving Beijing a technological edge.
On Monday, four members of China’s military were charged with hacking into Equifax, one of the nation’s largest credit reporting agencies, and stealing trade secrets and the personal data of about 145 million Americans in 2017.
The new indictment goes beyond the Justice Department’s earlier allegations of trade-secret theft and sanctions violations.
It applies a federal racketeering law that has historically been used to bring down mob leaders and gang kingpins and allows the government to bring charges that would otherwise fall outside the statute of limitations. The criminal conspiracy that Huawei is accused of carrying out has been going on since at least 1999, according to the Justice Department.
The indictment portrays Huawei as orchestrating a steady, if not sophisticated, campaign to steal trade secrets. For instance, the indictment alleged that in 2004, a Huawei employee sneaked back to a Chicago trade show to steal a competitor’s technology. The employee “was discovered in the middle of the night after the show had closed for the day in the booth of a technology company” and was found “removing the cover from a networking device and taking photographs of the circuitry inside.” The individual wore a badge listing his employer as “Weihua” — an anagram of Huawei — according to the indictment.
A spokesman for Huawei did not immediately respond to a request for comment.
Last year, the Justice Department charged Huawei’s chief financial officer, Meng Wanzhou, with outlining a decadelong attempt by the company to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran. Ms. Meng is in Canada, out of jail on bail of 10 million Canadian dollars, or $7.5 million, awaiting extradition to the United States. She is under 24-hour surveillance and must wear a GPS tracker on her ankle.
The White House has looked to ratchet up the pressure on Huawei for years, with members of Congress from both parties backing its efforts. The new charges may give more fodder to the company’s critics on Capitol Hill, who have been pushing to make sure Huawei has no role in the next generation of wireless networks, known as 5G.
“The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law,” said the top lawmakers on the Senate Intelligence Committee, Sens. Richard Burr, R-N.C., and Mark Warner, D-Va.
Under the Trump administration, the Justice Department has focused on combating an array of threats that China poses to the U.S. and its allies in the West, including theft of trade secrets and espionage, as the country seeks to expand its power.