U.S. national security experts of all political stripes agree: Chinese tech behemoth ZTE is a threat.
The company is a leading candidate to provide new markets with 5G networks, a lightning-fast wireless service that will support advanced technological applications.
A ZTE 5G network, U.S. national security experts warn, would also be able to spy on its users and send purloined data directly to the Chinese Communist Party.
Nevertheless, ZTE’s best-known hired gun, former Connecticut senator and 2000 Democratic vice presidential nominee Joe Lieberman, is now acting as an informal adviser on a U.S. Senate campaign — his son’s.
Matt Lieberman is running in a special election to fill a soon-to-be vacated Senate seat in Georgia and is leaning on his dad to help him become the first Democrat in two decades to win a Senate race there.
Americans are increasingly skeptical of elites profiting from their political connections, with many tiring of political dynasties. And with Washington getting tough on Beijing, a lobbyist for a Chinese company — a potential espionage tool for China’s Communist Party — advising his son’s campaign highlights the complications of contemporary politics and national security.
“There are entirely legitimate and serious security concerns that need to be addressed, and I think ZTE is trying to address them,” the younger Lieberman told CQ Roll Call. “They might succeed, and they might fail.”
As a registered ZTE lobbyist, Joe Lieberman has played a behind-the-scenes role in the company’s efforts in Washington. Matt Lieberman promises there is a wall between his father’s ZTE work and his campaign advisory role.
“If I am fortunate enough to be trusted with this Senate seat by the people of Georgia, I will, of course, abide stringently by all Senate ethics rules,” he said. “If there’s ever a gray area, I will err on the side of propriety.”
ZTE has a bad reputation in Washington.
After violating U.S. sanctions by selling products to Iran and North Korea, the White House in the summer of 2018 extracted more than $1 billion in fines from the company.
In exchange, the Commerce Department allowed it to continue to do business in the U.S. after considering a complete ban. Blocking ZTE from U.S. markets could have killed the company as the Chinese firm relies heavily on components from U.S. suppliers.
The Trump administration’s decision infuriated one of the Senate’s most liberal Democrats.
“The Trump administration is giving ZTE and China the green light to spy on Americans and sell our technology to North Korea and Iran, as long as it pays a fine that amounts to a tiny fraction of its revenue,” Oregon Sen. Ron Wyden, the top Democrat on the Finance Committee, said in June 2018.
Instead of enforcing a full ban, as one Senate proposal would have done, Congress in the fiscal 2019 defense authorization law banned the U.S. government from buying ZTE products, citing national security risks.
After narrowly escaping execution, ZTE made an unorthodox move: It hired one of its most vocal critics.
The elder Lieberman served four terms in the Senate and was a member of the powerful Armed Services Committee and chairman of the Homeland Security and Government Affairs panel, where he warned of ZTE’s pernicious potential.
“We are very concerned that [ZTE is] being financed by the Chinese government and greatly influenced by the Chinese military, which may create an opportunity for the Chinese military,” Lieberman said in a 2010 statement signed by three other lawmakers. “This would pose a real threat to our national security.”
Eight years later, Lieberman registered with law firm Kasowitz Benson Torres as a lobbyist for ZTE.
ZTE paid Lieberman, along with his former Senate chief of staff Clarine Nardi Riddle and Kasowitz Benson Torres associate Nicholas Rendino, $150,000 for the last quarter of 2018 and $120,000 for the first quarter of 2019. Kasowitz Benson Torres filings show its employees did not lobby for ZTE in the second quarter of 2019. An October filing from the law firm indicates that ZTE is still its client.
Lieberman, though, maintains that he is not lobbying for ZTE — he just registered as a lobbyist out of an “excess of caution.”
“I and my firm are conducting an independent assessment of national security concerns raised by lawmakers and others with regard to ZTE’s products and business activities in the United States,” he said in an August statement to CQ Roll Call after declining an interview request. “In no way are we engaging or have we been asked or agreed to engage in lobbying on behalf of ZTE.”
Even if he is just calling lawmakers and taking notes, Lieberman is getting a check from the Chinese firm.
Along with fellow Chinese tech giant Huawei, ZTE is competing across the globe to become the preferred 5G provider for countries within China’s One Belt One Road initiative — and any others willing to cut a check.
The Chinese 5G offerings attracted attention from the U.K. and Germany, both treaty allies of the U.S. And in April, just before a NATO summit, former Director of National Intelligence James R. Clapper Jr., who served under President Barack Obama, along with five former combatant commanders, warned in a statement that Chinese 5G networks could easily be turned into intelligence collection devices for the Chinese Communist Party.
“Chinese-designed 5G networks will provide near-persistent data transfer back to China that the Chinese government could capture at will,” the statement said.
The U.K. will decide by the end of the year whether to allow Chinese companies to operate its future 5G network. As recently as Wednesday, Germany has said that it will not block the Chinese companies from operating within the borders of the European Union’s largest economy.
Berlin might as well give Chinese President Xi Jinping its citizens’ login names and passwords, according to Timothy R. Heath, a defense researcher at the RAND Corporation.
“The real power in China is through the Communist Party,” said Heath, who served as a senior China analyst for U.S. Pacific Command. “They operate behind the scenes, and they can order decision-makers at any company to do things that the companies’ shareholders or officials may not want to do. They just don’t have a choice. It’s an authoritarian system.”
Matt Lieberman now has to convince Georgians that his father’s connection to ZTE is above board in what will likely be a competitive campaign in a state with a sizable military constituency.
“It’s not an unusual situation to have a member of Congress or a senator who has a family member who works as a lobbyist or has been working as a lobbyist,” Matt Lieberman said. “That’s why there are rules about it, and we will follow them stringently.”
Lieberman is running to fill the Senate seat that Republican Johnny Isakson is vacating for health reasons at the end of the year. GOP Gov. Brian Kemp will appoint a successor to Isakson, who could run for the remainder of the senator’s term in a 2020 special election.
So far, Lieberman is the only candidate in that election, but it won’t stay that way. All candidates, regardless of party affiliation, will compete on the same ticket in a “jungle” primary next November. If no one secures more than 50 percent of the vote, the top two vote-getters will advance to a January 2021 runoff. Inside Elections with Nathan L. Gonzales rates the race Likely Republican.
In his first campaign video, Lieberman promised to fight for abortion rights and against the National Rifle Association. As his campaign advances, he will likely have to address military concerns, too, as Georgia hosts bases for all four service branches, including Fort Benning, home to around 120,000 active-duty military members, their families and civilian employees.
The state’s military presence translates in the Senate, where Isakson chairs the Veterans Affairs Committee and the junior senator, Republican David Perdue who is seeking his own reelection next year, sits on the Armed Services panel.
Armed Services Republicans have been some of the Senate’s primary messengers on the potential dangers of Chinese companies operating in the U.S.
In September, Arkansas Republican Tom Cotton teamed up with Senate Minority Leader Charles E. Schumer on a letter to Defense Secretary Mark T. Esper demanding the Pentagon publish a list of all companies in the U.S. that are controlled or owned by the Chinese military.
As a senator, Matt Lieberman said he would give all companies operating in the U.S. a chance to exonerate themselves if their operations concerned lawmakers.
“I think it’s fair for that company to try to do better,” he said. “And then it’s fair, of course, for the Congress to say, ‘Your efforts are acceptable, or they’re not.’”
The younger Lieberman is trying to spin questions about his father’s ZTE connections as a sign of his campaign’s legitimacy.
“The fact that at this stage there is sufficient interest in how I would deal with a potential conflict were I to be elected is in its own way another sign of strength of the campaign,” he said. “Right out of the box we are being greeted with credibility.”
Matt Lieberman has until November 2020 to make the case for his candidacy. His dad has until Monday to file any lobbying reports for the third quarter of 2019.