Chinese telecom giant eyed as security threat

Huawei, a global Chinese telecommunications equipment manufacturer already doing limited business in the U.S., poses a threat to national and corporate security say members of the U.S. House Permanent Select Committee on Intelligence. Those congressmen speak to Steve Kroft for a 60 Minutes investigation to be broadcast Sunday, Oct. 7 at 7:30 p.m. ET and 7:00 p.m. PT.

The world's largest maker of telecommunications equipment has been under investigation for the past year by the committee, which will issue its report on the Chinese company on Monday. The committee's chair, Rep. Mike Rogers (R-Mich.), tells Kroft, "If I were an American company today...and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America."

Rep. Dutch Ruppersberger (D-Md.) adds, "One of the main reasons we are having this investigation is to educate the citizens in business...in the telecommunications world."

The committee believes allowing Huawei to build and maintain large swaths of America's telecommunications infrastructure opens a door for the Chinese government to spy on the U.S. government and engage in industrial espionage.

Says Jim Lewis, a former U.S. government foreign technology analyst, "It's a strategic industry in the sense that an opponent can gain serious advantage...from being able to exploit the telecommunications network." Asked by Kroft if Huawei were to be approached by the Chinese government and asked to spy on the U.S., could they refuse, Lewis replies, "It would be very difficult for them. The state tells them what to do and they do it."

Huawei is doing business in Kansas currently, among a few other small, rural markets. In Dodge City, it's providing fast wireless Internet communications. The president of United Wireless, Craig Mock, tells Kroft he did business with Huawei because he didn't know of any other American company that made the equipment he needed. Mock was visited by federal agents after signing his deal with Huawei.

The U.S. invented and developed the telecommunications industry, but is largely out of the business now. The only U.S. supplier that competes with Huawei is Cisco, and they don't make every component necessary for today's 4G networks. There have been charges of industrial espionage against it that Huawei has settled with Cisco and Motorola. Lewis, now a fellow at the Center for Strategic & International Studies, says the company grew to its enormous size with massive financial help from the Chinese government.