Friday, July 13, 2012

ZTE under investigation by the FBI for sales to Iran

We arrive at our destination with the security detail. I did not receive the data necessary so it will be time to improvise as best as possible. My driver stops the car, gets out and opens the door for me. I get out, give him a nod of approval which he reciprocates and four guards are standing at attention as I approach them. Security is tight the last few months due to our near completion of a big project. The highest ranked guard salutes me and the security detail is ready to escort me to the conference room.

A junior aid intercepts me and the guards block her immediately. I feel like a quarterback and my offensive line makes sure I am safe in the pocket so I can execute our attack. She pleads for me to listen to her for 30 seconds as she claims to have urgent information on the upcoming meeting. The guards hold her and await my orders. I am not sure why I allowed her the 30 seconds, whether it was her courage to run into my offensive line or her looks.We all walk into an adjacent hallway as the guards secure the perimeter and I give her the 30 seconds she requested.

She has information about the Iranian situation. The FBI launched a probe into the sale of band US computer equipment to Iran by ZTE, a Chinese telecoms gear maker, and their attempted cover-up as the Department of Commerce launched a probe into this matter. Apparently Iran obtained a powerful surveillance system which allows Iran to monitor landline, mobile and online communications. The $120 million contract also allowed Iran to gain access to hardware components manufactured by Microsoft, HP, Oracle, Cisco and Dell.  

ZTE operates a Texas based subsidiary where apparently documents were shredded, the packing list for the contract altered and false information given to the Department of Commerce as the results of their probe into this deal. The probe was launched after a Reuters reported obtained the original packing list from an unknown source.

Another inside job? Does this have anything to do with the attack on our and myself earlier this afternoon?

ZTE operates several subsidiaries which it uses to purchase equipment ready to be sold to countries the US has embargoes on, such as Iran which is under multiple embargoes from the US as well as the EU. The FBI obtained their information from Ashley Yablon, general counsel for ZTE's Texas subsidiary. The spokesman  for ZTE, David Shu, had no comment and Mr. Yablon went off the grid or can't be reached. The Justice Department as well as the FBI joined Mr. Shu in their no comment approach which means this issue is bigger than anticipated and more delicate then thought.

Will ZTE join Nokia Siemens Networks, Ericsson as well as Huawei and slowly reduce business with Iran due to international pressures?

On top of the FBI probe, ZTE is also under investigation by the US House of Representatives' Intelligence Committee in order to determine if ZTE is a threat to national security. Should ZTE be found guilty it may be forced out of the US and hurt its expansion plans. Currently ZTE is China's second largest telecom equipment manufacturer as well as the world's number four. ZTE is publicly traded but majority owned by a Chinese state owned company. This probe adds to disputes between ZTE and the EU.

I thank the aid for this new and vital information, but wonder why she decided to give it to me and how she knew who I was. Questions which need to be wait before they can be answered as I am running late for my meeting. As I watch the aid head back to her office I command two guards to follow her and bring her in for questioning after my meeting.

I turn around and face the two huge doors which lead into the conference room where my contractor together with about a dozen officials await my arrival so the meeting can commence.

Photo Credit: The picture in the top left corner was downloaded for free use at


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