Corruption Allegations Part 1

On 11 February 2019, the Voice of America website published a summary of the corruption allegations and charges against Huawei.

•In 2012 (Huawei), along with ZTE, was found guilty of bribery in Algeria and fined $39,000 and excluded from public contracts for two years. Local French language news site Presse-DZ reported that international arrest warrants had been issued for ZTE’s Dong Tao and Chen Zhibo and Huawei’s Xiao Chunfa. A fine of three million dinars (£25,117) each was also levied and the firms were banned from public tenders for two years as punishment for “corruption and influence peddling”.

•The three were charged as part of a wider corruption scandal involving former Algérie Télécom exec Mohamed Boukhari, and businessman Chami Madjdoub who were given a sentence of 18 years in jail and fined five million dinars after receiving suspicious payments and money laundering between 2003-6. The report alleges that the ZTE and Huawei execs effectively bribed Boukhari by paying $10m (£6.5m) into offshore accounts set up by Madjdoub. The Shenzhen headquartered telecoms kit makers both expressed concern at the news.

In Zambia, it was probed over allegations of bribery involving a multi-million-dollar contract to build cell towers in rural areas.

In the Solomon Islands, it was accused of offering millions of dollars to the ruling party in exchange for an undersea fiber optic cable contract. In all three cases – and half a dozen others in recent years – the alleged perpetrator was Huawei.

•In Ghana, Huawei has confronted accusations of illegally funding the ruling party, a charge Huawei and other Chinese companies have faced in other countries. In 2012, an opposition group disclosed what it claimed was evidence that Huawei had made illegal campaign contributions to the ruling National Democratic Congress in exchange for a $43 million tax exemption. Alliance for Accountable Governance (AFAG) produced invoices and other documents showing the Chinese telecom company had paid for millions of dollars worth of campaign paraphernalia for the ruling party’s 2012 election campaign. In return, the group alleged, the government awarded “one of the juiciest contracts to be doled out by the government” – a $150 million contract to build an e-government platform. Huawei and the government denied the charges.

In the last 12 years, Huawei and its smaller Chinese rival ZTE have been “investigated or found guilty of corruption” in as many as 21 countries, according to Andy Keiser, a former House Intelligence Committee professional staffer.

The ZTE Corporation recently launched its first 5G Wireless Router, ZTE 5G Indoor CPE MC801A, in South Africa in collaboration with MTN. Rain, one of the 5G providers in South Africa also markets a 5G Huawei Router.

ZTE is listed on both the Hong Kong and Shenzhen Stock Exchanges. As with Huawei, the company has faced criticism in the United States over potential ties to the Chinese government that could enable surveillance. In June 2020, the Federal Communications Commission designated ZTE a national security threat, thereby barring it from any U.S. subsidies. It was disclosed that the United States Department of Justice opened an investigation into ZTE for potential violations of the Foreign Corrupt Practices Act.

Huawei’s founder Ren Zhengfei was once an engineer in the People’s Liberation Army and is also a member of the Communist Party. And then there are the Chinese rules: According to a new cybersecurity law that came into force in summer 2017, in certain cases Chinese companies are obliged to pass on information acquired abroad to the state. What “certain cases” means is vague.

The gift that kept on giving

In 2006, Beijing pledged $200m to build the African Union headquarters in Addis Ababa. Everything was custom-built by the Chinese – including a state-of-the-art computer system. Huawei servers sent sensitive data back to China every evening for five years. All allegations were denied.

Fast forward to July 20, 2020:

Huawei equips Cameroon government data center, helps Rain’s South Africa 5G project.

A Tier III (Design) data center has been built in Cameroon by a Chinese consortium that includes Huawei.

The $15m Camtel NBN II, also called the Zamengoe data center, is a 3,000 sq m (32,000 sq ft) facility on the outskirts of Yaounde, the capital of Cameroon. It was funded with a loan from the Chinese government.

Al Jazeera Investigations

On the 15th of July 2020, Aljazeera broke the news of corruption allegations concerning 5G and Huawei in Namibia. A Windhoek city councillor alleged that she was offered money by a local politician to drop objections against tentative 5G deal. The Anti-Corruption Commission of the Republic of Namibia is investigating the case.

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