Justice investigating Chinese telecom group ZTE for bribery: report

The Justice Department is investigating Chinese telecom group ZTE for bribery, NBC News reported on Friday.

The report, citing “two people briefed on the matter,” found that the investigation is based on ZTE allegedly paying bribes to foreign officials to gain advantage in the world telecom market.

A spokesperson for the U.S. Attorney’s Office of the Southern District of New York, which according to NBC News is the branch of the Justice Department investigating ZTE, declined to comment on the story to The Hill. 

The new investigation comes three years after ZTE pleaded guilty to illegally shipping equipment from the U.S. to Iran, agreeing to pay a penalty of $1.19 billion in settling with the Commerce and Treasury departments for violating export controls. 

While a spokesperson for ZTE did not respond to The Hill’s request for comment, the company told NBC News that “ZTE is fully committed to meeting its legal and compliance obligations.”

The spokesperson added that “the top priority of the company’s leadership team is making ZTE a trusted and reliable business partner in the global marketplace, and the company is proud of the enormous progress it has made. Beyond this, it would not be appropriate for ZTE to comment.”

ZTE, along with separate Chinese telecom company Huawei, has come under close scrutiny over the past few years as concerns around Chinese tech groups doing business in the U.S. have increased.

Concerns have stemmed from a 2017 Chinese intelligence law that requires Chinese companies and citizens to participate in state intelligence work and share data and information if requested.

As a result, the Trump administration has made keeping both Huawei and ZTE out of U.S. networks a priority. President Trump signed into law a bill this week banning the use of federal funds to purchase equipment from groups deemed threats to national security, and creating a $1 billion fund to help smaller companies rip out and replace existing vulnerable equipment. 

Equipment from ZTE and Huawei are used in rural areas. The Rural Wireless Association estimated around 25 percent of their member companies were using equipment from at least one of these companies in 2018. 

The Federal Communications Commission voted unanimously in November to classify both companies as national security threats, and to ban U.S. telecom companies from using FCC funds to buy equipment from either Huawei or ZTE.