ZTE Accused Of Spying, Corruption In New Court Documents

ZTE Logo 2017 AH 9

Chinese technology company ZTE that’s presently enduring a troublesome episode over a Commerce Department-issued denial order has been accused of spying and systemic corruption as part of documents filed with the 191st District Court of Dallas, Texas. The documentation discovered by Fairfax Media pertains to a case filed by one of ZTE’s rivals who hasn’t been named but alleges the Shenzhen-based firm paid up to tens of millions of dollars in bribes in order to gain an upper hand on its competitors in various countries around the world, citing a number of such allegations from the 21st century. The filing also accused ZTE of being “a front” for China’s Aerospace Ministry which founded it in 1993, maintaining the primary purpose of the company was to allow intelligence officers from the Far Eastern country to travel abroad without relying on diplomatic covers and instead pose as engineers, businessmen, and scientists while undertaking spying activities.

Among other things, the documents cited by Fairfax Media specifically mention corruption allegations in Myanmar, Philippines, Nigeria, Kenya, Zambia, and Liberia. In the lattermost country, ZTE is said to have bribed late President Gyude Bryant, judges, and a number of government officials. Two telecom executives from Liberia testified of widespread corruption on ZTE’s part under oath, alleging bribes have been paid in “brown paper bags” between 2005 and 2007. The Chinese firm is accused of pay-to-play schemes aimed at pushing out an American rival from the West African country where it was meant to build a national network as part of a government contract supposedly eyed by ZTE, though the name of the stateside company in question hasn’t been revealed.

In a subsequent statement issued to Fairfax Media, ZTE denied all allegations of corruption and spying, systemic or otherwise. The company is presently trying to have its U.S. denial order lifted and replaced with a $1.3 billion fine and a large number of other concessions. Under the current ban issued due to violations of trade sanctions placed on North Korea and Iran, as well as subsequent violations of a settlement meant to put an end to that affair, ZTE is unable to purchase and license key American technologies such as Google’s Android and Qualcomm’s Snapdragon chips, with its mobile and networking business consequently being entirely crippled.


President Trump is currently trying to provide ZTE with a lifeline deal, albeit one that’s facing bipartisan opposition from Congress and could be blocked by a supermajority vote in the coming weeks. ZTE has been accused of posing a national security threat in the West on numerous occasions in the 21st century, having often faced such allegations together with Huawei, with both vehemently denying them to this date. No concrete evidence of either firm spying on behalf of Beijing has ever been publicized by any government or other entity. ZTE is publicly traded on two stock exchanges in its home country, though its majority stake is still owned by the People’s Republic of China.