A major Chinese telecom company with links to Chinese military and intelligence services has been indirectly selling equipment to the Pentagon and Department of Homeland Security.
In order to bypass attempts to block the use of Chinese telecom gear, ZTE Corporation has partnered with a U.S. equipment contractor that sells to the Pentagon, rather than attempting to sell equipment directly, according to two U.S. officials who spoke with the Free Beacon.
While subcontracting through a U.S. company is not illegal, U.S. security officials are beginning to worry about possible penetration of the military supply chain and the use of malicious software implanted in devices for espionage.
This fear has its roots in a brief by Northrop Grumman Corp for the 2012 congressional U.S.-China Economic and Security Review Commission, which stated that ZTE had close connections to the People’s Liberation Army (PLA).
According to the brief, ZTE has worked on research with the PLA specifically on satellite navigation and data link jamming.
Moreover, a recent report from the Pentagon Defense Science Board noted that the risk from foreign states attempting to take advantage of supply chain weaknesses to sabotage the U.S. military is likely to grow.
“The task force observed instances that may have been unsuccessful attacks on critical weapons systems via malicious insertion,” the report stated. “The nation’s weapons systems are at risk from the malicious insertion of defects or malware into microelectronics and embedded software, and from the exploitation of latent vulnerabilities in these systems.”
Meanwhile, ZTE has already run afoul of the Department of Justice and was fined $1.19 billion in March for shipping U.S.-origin telecommunications equipment to Iran and North Korea. In exchange for the fine, the DOJ has allowed ZTE to still do business in the U.S.
ZTE is no longer on the list of sanctioned entities, but is now operating under a three-year probation.
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