WITH CHINA AND THE TECHNOLOGY
THREAT.
HUAWEI AT THE CENTER OF INTENSE
INTERNATIONAL SCRUTINY.
SEVERAL COUNTRIES ARE SOUNDING
THE ALARM ON THE THREAT TO
SECURITY.
PRESIDENT TRUMP HAS BLASTED THE
COMPANY, ALONG WITH AUSTRALIA,
JAPAN AND TAIWAN.
THE PRESSURE HAS BEEN HURTING
SALES.
ONE HUAWEI EXECUTIVE SAYING IT
NEEDS MORE TIME TO BECOME THE
WORLD'S LARGEST SMARTPHONE
MAKER, A GOAL IT WAS AIMING TO
ACHIEVE LATER THIS YEAR.
JOINING ME RIGHT NOW IS HUAWEI
TECHNOLOGY'S CHIEF SECURITY
OFFICER, ANDY PURDY.
THANK YOU FOR JOINING US ONCE
AGAIN.
>> THANK YOU.
MARIA: WE TALKED ABOUT A LOT OF
THE CONVERSATION SURROUNDING
HUAWEI AND THAT IS WORRY THAT
THERE IS ESPIONAGE, THAT THE
SECURITY IS NOT SAFE.
I WANT TO PLAY A SOUND BITE OF
SECRETARY OF STATE MIKE POMPEO
AND VICE PRESIDENT MIKE PENCE
AND WHAT THEY RECENTLY TOLD ME
ABOUT HUAWEI.
WATCH.
>> HUAWEI IS AN INSTRUMENT OF
THE CHINESE GOVERNMENT.
THEY'RE DEEPLY CONNECTED.
IT'S SOMETHING THAT'S HARD FOR
AMERICANS TO UNDERSTAND.
COMPANIES COOPERATE WITH THE
UNITED STATES GOVERNMENT, THAT
IS, THEY COMPLY WITH LAW BUT NO
PRESIDENT DIRECTS AND AMERICAN
PRIVATE COMPANY.
THAT'S VERY DIFFERENT IN CHINA.
THEY JUST SIMPLY OPERATE UNDER A
DIFFERENT SET OF RULES.
THAT'S THE MOST FUNDAMENTAL
THING I THINK PEOPLE NEED TO TRY
TO GET THEIR HEAD AROUND.
IF THAT'S THE CASE THAT THE
CHINESE COMMUNIST PARTY WANTED
TO GET INFORMATION FROM
TECHNOLOGY THAT WAS IN THE
POSSESSION OF HUAWEI, IT'S
ALMOST CERTAINLY THE CASE THAT
HUAWEI WOULD PROVIDE THAT TO
THEM, THE DEEP CONNECTIVITY
EXISTS IN THE WAY THEIR
POLITICAL ECONOMY OPERATES.
THAT'S DIFFERENT THAN THE UNITED
STATES.
THAT'S THE THREAT THAT PRESIDENT
TRUMP SEES FROM HUAWEI.
>> THE WHOLE ISSUE OF HUAWEI IS
IT'S AN ISSUE OF NATIONAL
SECURITY.
HUAWEI IS IN EFFECT A WHOLLY
OWNED SUBSIDIARY OF THE CHINESE
COMMUNIST PARTY AND TO HAVE
HUAWEI OPERATING AS A 5G NETWORK
IN OUR COUNTRY OR IN OUR ALLIES'
COUNTRIES, WE BELIEVE REPRESENTS
A FUNDAMENTAL COMPROMISE OF OUR
NATIONAL SECURITY AND THE
PRIVACY OF MILLIONS OF CITIZENS.
MARIA: ANDY, YOU'RE THE CHIEF
SECURITY OFFICER AT THE COMPANY.
WHAT'S YOUR REACTION TO WHAT
YOU'VE HEARD?
>> SEVERAL THINGS.
FIRST OF ALL, AT THE HIGHEST
LEVELS OF SECURITY CLEARANCE THE
UNITED STATES PRESENTED NO
EVIDENCE OF CYBER SECURITY
WRONGDOING BY HUAWEI ACCORDING
TO THE GERMAN AND U.K.
OFFICIALS.
THE FACT IS THAT WE DON'T SPEAK
THROUGH THE CHINESE GOVERNMENT.
THEY DON'T SPEAK THROUGH US.
IT'S ALSO VERY IMPORTANT TO
REMEMBER TWO OTHER THINGS.
THE NETWORK OPERATORS CONTROL
ALL THE DATA AND ALL THE ACCESS.
AND THIRD, WE ONLY HAVE VERY
LIMITED ACCESS TO THAT DATA AND
THEN NOT FROM HUAWEI NETWORKS,
THEN ONLY AFTER WRITTEN
PERMISSION FROM THE NETWORK
OPERATORS AND THEN SPECIAL
LAPTOPS ARE CONNECTED TO THE
CUSTOMER NETWORK WHERE EVERY KEY
STROKE IS LOGGED THAT PROVIDES
ASSURANCE AND TRANSPARENCY.
THOSE ARE THE FACTS.
MARIA: THE FACTS ALSO ARE THAT
HUAWEI HAS SETTLED LAWSUITS WITH
A NUMBER OF AMERICAN COMPANIES
FOR STEALING TRADE SECRETS.
THE COMPANY SETTLED WITH CISCO,
MOTOROLA, T-MOBILE, MICROSOFT,
ALL OF THESE LAWSUITS HAPPENED
IN THE LAST EIGHT YEARS AND
YOU'VE BEEN FORCED TO SETTLE.
SO HOW DO YOU SAY THERE WERE NO
CYBER BREACHES?
THIS IS WHAT WE DISCUSSED, YOU
AND ME, THE LAST TIME.
TO COMPLETELY IGNORE ALL OF
THESE LAWSUITS THAT WERE SETTLED
BECAUSE HUAWEI STOLE TRADE
SECRETS.
>> THE FACT IS, THE INDUSTRY HAS
QUITE A CHECKERED PAST AND QUITE
A BIT OF LITIGATION.
IN TERMS OF SIGNIFICANT CYBER
SECURITY WRONGDOING, THERE'S
BEEN NO EVIDENCE IN 170
COUNTRIES AND THE U.S. COULD
GIVE NO EVIDENCE OF THAT TO THE
U.K. OR GERMANY OR OUR OTHER
ALLIES.
MARIA: THE EVIDENCE I
MENTIONED, THAT YOU SETTLED
LAWSUITS AND THEY WERE ABOUT
STEALING TRADE SECRETS.
THAT IS EVIDENCE.
>> THE U.K. GOVERNMENT AND
GERMAN GOVERNMENT PUSHED BACK ON
THE PRESSURE FROM THE U.S.
GOVERNMENT TO BLOCK HUAWEI FROM
THEIR 5G NETWORKS BECAUSE THEY
SAY THE U.S. GOVERNMENT HAS NOT
GIVEN THEM ANY EVIDENCE OF
SIGNIFICANT CYBER WRONGDOING AND
THERE CAN BE RISK MITIGATION
THAT CAN BE EFFECTIVE.
THAT'S WHAT WE RECOMMEND FOR THE
UNITED STATES, LIKE KNOW KIA AND
ERICKSON WERE ALLOWED.
MARIA: YOU SAY THERE WAS NO
WRONGDOING, AND YET THE COMPANY
SETTLED LAWSUITS FOR STEALING
TRADE SECRETS.
THAT'S NUMBER ONE.
NUMBER TWO, RECENTLY, IN THE
LAST SIX WEEKS YOU HAD AN
EXECUTIVE AT VOTE PHONE WHO SAID
THAT IN VODOPHONE ITALY, THEY
DISCOVERED HIDDEN BACK DOORS IN
HUAWEI EQUIPMENT THAT WOULD HAVE
ALLOWED YOUR COMPANY TO ACCESS
USERS' HOME NETWORKS AND
VODOPHONES ITALIAN FIXED LINE
NETWORK.
WE KNOW THIS HAPPENED FOUR WEEKS
AGO, AN EXECUTIVE SAID VODOPHONE
ITALY, THEY FOUND BACK DOORS,
THEY HAD TO SAY WAIT, THERE ARE
BACK DOORS HERE WHERE ALL OF
THIS DATA GOES BACK TO CHINA AND
THEN IT WAS RECTIFIED AFTER HE
RAISED HIS HAND.
YOU'RE THE SECURITY OFFICER.
DID YOU KNOW ABOUT THE BACK
DOORS IN THE VODOPHONE
INFRASTRUCTURE?
>> SUBSEQUENT TO THAT INITIAL
REPORTINGS VODOPHONE, CONFIRMED
THERE WERE NO BACK DOORS.
LOOK AT CISCO, THE EIGHT OR 10
BACK DOORS THAT WERE DISCOVERED
IN THEIR FLOODS THEREAFTER YEAR
OR TWO AND FRANKLY, WHEN YOU
LOOK AT WRONGDOING AND THE CISCO
CASE WAS MORE THAN EIGHT YEARS
AGO, I MAKE NO EXCUSE FOR ANY
WRONGDOING WHETHER IT OCCURRED 1
WRONGDOING WHETHER IT OCCURRED 5
YEARS AGO OR YESTERDAY IT'S NOT
RIGHT.
WE SHOULD BE HELD ACCOUNTABLE
FOR ANY KIND OF WRONGDOING SUCH
AS THAT.
MARIA: HOW DO WE KNOW THERE
AREN'T BACK DOORS ELSEWHERE WHEN
WE KNOW VODOPHONE TOLD US THEY
DISCOVERED A BACK DOOR WITH THE
DATA GOING BACK TO CHINA.
YOU CAN'T SAY THERE WERE NO BACK
DOORS.
>> SUBSEQUENT TO THAT REPORT --
MARIA: IT WASN'T A REPORT.
IT WAS VODOPHONES EXECUTIVES
SAYING WE FOUND BACK DOORS WHERE
OUR DATA IS GOING TO CHINA.
WE NEED THIS FIXED.
THEN HUAWEI RECTIFIED IT.
HOW DO YOU KNOW -- HOW DO WE
KNOW THAT THIS BACK DOOR DOESN'T
EXIST IN ALL INFRASTRUCTURE OUT
OF HUAWEI.
>> TWO THINGS.
SUBSEQUENTLY, VODOPHONE SAID
THAT REPORT WAS INCORRECT, THERE
WERE NO SUCH BACK DOORS.
THE PRINCIPAL DEP TOY THE
DIRECTOR OF NATIONAL TELL JENS
SAID THEY CAN TEST PRODUCTS FOR
BACK DOORS.
THAT'S WHY NOKIA AND ERICKSON
ARE ALLOWED TO DO BUSINESS IN
THE UNITED STATES, DESPITE DEEP
TIES TO CHINA.
WE WANT TO TALK WITH THE U.S.
GOVERNMENT ABOUT THOSE RISK
MITIGATION MECHANISMS THAT MIGHT
WORK TO A ALLOW US TO DO SOME
BUSINESS IN THE UNITED STATES.
MARIA: WHY WOULD YOU HAVE DONE
ALL OF THESE SETTLEMENTS WITH
ALL OF THESE COMPANIES IF THERE
WERE NO ISSUES AROUND HUAWEI?
YOU'RE TALKING ABOUT COUNTRIES
THAT HAVE HAD HUAWEI EQUIPMENT
IN PLACE FOR A LONG TIME, YOU
MENTIONED GERMANY.
IT'S SO EXPENSIVE TO DO AWAY
WITH THAT AND START AGAIN, MAYBE
THAT'S ONE OF THE ISSUES THAT
THESE COUNTRIES ARE SAYING WELL,
WE'LL STICK WITH IT RIGHT NOW.
THERE'S ABSOLUTELY NO QUESTION
ABOUT WHETHER OR NOT THERE WERE
TRADE SECRETS STOLEN AND WHETHER
OR NOT THERE ARE BACK DOORS.
WE JUST HEARD THIS.
YOU'RE SAYING EXACTLY THE
OPPOSITE OF WHAT WE KNOW TOOK
PLACE.
>> OUR ALLIES UNDERSTAND THE
KIND OF ISSUES THAT HAVE
HAPPENED IN THE PAST REGARDING
INTELLECTUAL PROPERTY THEFT AND
WE ARE THE NUMBER ONE HOLDER OF
PATENTS OF INFORMATION
COMMUNICATION TECHNOLOGIES AND
THE NUMBER ONE PATENT HOLDER FOR
5G.
AT THE LEVEL OF NATIONAL
SECURITY SIGNIFICANCE, THERE IS
NO EVIDENCE PRESENTED BY THE
UNITED STATES TO GERMANY OR THE
U.K. OR OTHER ALLIES BECAUSE
THERE IS NO EVIDENCE.
YOU HEARD IN THOSE STATEMENTS
YOU PLAYED FOR ME THAT THEY ARE
CONCERNED.
IT'S NOT ABOUT THE COUNTRY.
IT'S ABOUT THE COMPANY.
BUT THE FACT IS, THERE ARE
PROVEN RISK MITIGATION
MECHANISMS AS EVIDENCED BY NOKIA
AND ERICKSON THAT CAN ADDRESS
THE RISK.
THE DNI HAVE SAID THEY CAN FIND
THE BACK DOORS THROUGH TESTING.
WE'RE OPEN TO THAT.
MARIA: AS PART OF THE
SETTLEMENT WITH MOTOROLA WE
LEARNED FROM THE WALL STREET
JOURNAL LAST WEEK, BIG STORY ON
HUAWEI, A RELATIVE OF THE
FOUNDER OF HUAWEI WORKED AT
MOTOROLA AND THE CHAIRMAN'S
RELATIVE BROUGHT SECRET DETAILS
OF THE COMPANY'S TECHNOLOGY TO A
MEETING IN BEIJING.
ANOTHER SUIT ALLEGES COMPLICITY
BY HUAWEI'S DEPUTY CHAIRMAN IN
SECRET THEFT.
YOU HAD A MEMBER OF THE FAMILY
OF THE CHAIRMAN, MR. REN'S
RELATIVE, WORKING AT MOAT
RELATIVE, WORKING AT MOTT
RELATIVE, WORKING AT MOTOROLA
AND STEALING SECRETS ACCORDING
TO THE WALL STREET JOURNAL AND
YOU SAY?
>> THE JURY IN THE T-MOBILE CASE
--
MARIA: THIS IS MOTOROLA.
>> THERE HAVE BEEN INSTANCES IN
THE PAST THAT I ACCEPTED THAT
HAVE OCCURRED.
I MAKE NO EXCUSE FOR THOSE.
MARIA: YOU SAID THERE WERE NO
INSTANCES THAT NEVER OCCURRED.
NOW YOU SAY THERE HAVE BEEN
INSTANCES THAT HAVE OCCURRED
WHICH I ADMIT.
>> MARIA, THAT'S NOT WHAT I
SAID.
I SAID THERE HAVE BEEN INSTANCES
OF INTELLECTUAL PROPERTY ISSUES
IN THE PAST.
THE LEVELS OF WRONGDOING THAT
HAVE NATIONAL SECURITY
SIGNIFICANCE, THE U.S. HAS NO
EVIDENCE AND THERE IS NO
EVIDENCE IN THE COUNTRIES IN
WHICH WE DO BUSINESS.
THOSE ARE TWO DIFFERENT THINGS.
MARIA: HOW DO YOU EXPLAIN
AUSTRALIA BANNING HUAWEI?
HOW DO YOU EXPLAIN THE U.S.
BANNING?
TAIWAN?
HOW DO YOU EXPLAIN SO MANY
COUNTRIES SEEING THE SAME THING
THE U.S. HAS SEEN AND BANNING
TELECOM EQUIPMENT FROM HUAWEI.
>> IN THE DISCUSSIONS BETWEEN
HUAWEI AND AUSTRALIA, ALL THE
ISSUES AND CONCERNS WERE
ADDRESSED AND POLITICAL PRESSURE
WAS PUT IN PLACE TO GET THE
AUSTRALIAN GOVERNMENT TO BLOCK
HUAWEI.
THE POLITICAL PRESSURE IS
INTENSE.
DESPITE THAT, MAJOR ALLIES ARE
RESISTING IT.
IT'S NOT JUST ABOUT MONEY.
IT'S BECAUSE THEY'VE GOT NO
EVIDENCE OF SIGNIFICANT CYBER
WRONGDOING AND THEY BELIEVE
THERE ARE EFFECTIVE RISK
MITIGATION MECHANISMS.
FOR THE SECURITY OF CYBERSPACE
AND THE UNITED STATES WE NEED TO
USE MECHANISMS FOR ALL NETWORK
OPERATORS AND EQUIPMENT
PROVIDERS.
MARIA: DO YOU THINK IT'S
SIGNIFICANT TO STEAL TRADE
SECRETS?
>> ABSOLUTELY.
MARIA: YOU SAID THERE WERE NO
SIGNIFICANT ISSUES AROUND
ESPIONAGE AND INTELLECTUAL
PROPERTY.
>> WHAT I SAID WAS THAT AT THE
LEVEL OF NATIONAL SECURITY
SIGNIFICANCE THERE ARE NO
ALLEGATIONS OF WRONGDOING.
WHEN YOU LISTEN TO THE QUOTES
YOU PLAYED, THEY'RE SUGGESTING
THAT CHINA IN THE FUTURE MIGHT
DO THIS KIND OF CONDUCT.
THE FACT IS, WE CAN'T TURN OVER
THE KINDS OF DATA THAT THEY'RE
TALKING ABOUT IF WE DON'T HAVE
ACCESS TO IT.
THEY MISUNDERSTAND OUR ROLE IN
THE NETWORKS.
MARIA: WHEN YOU SAY YOU DON'T
HAVE ACCESS TO IT, WHEN YOU HAVE
A BACK DOOR, A BACK DOOR IS
BASICALLY HARDWARE DESIGNED SO
YOU CAN CONNECT THIRD PARTY
CHINESE PARTIES TO THAT NETWORK
SO THAT THAT NETWORK DATA CAN GO
BACK TO THE CHINESE PARTIES.
SO WHEN YOU SAY THAT YOU DON'T
HAVE ACCESS TO IT, WHAT EXACTLY
ARE YOU TALKING ABOUT?
>> I'M MAKING TWO DIFFERENT
POINTS.
THE PRINCIPAL DEPUTY TO THE
DIRECTOR OF NATIONAL
INTELLIGENCE SAYS WE CAN TEST
FOR BACK DOORS, LOOK FOR BACK
DOORS UNDER STRICT CONDITIONS.
STRICT OVERSIGHT LIKE IS DONE IN
THE U.K. AND WHICH APPARENTLY,
ALTHOUGH WE CAN'T SEE THE TERMS
OF IT, NOKIA AND ERICKSON
OPERATE UNDER THE UNITED STATES.
BUT IN TERMS OF OUR SERVICING OF
THE EQUIPMENT OF OUR CUSTOMERS,
WE'RE POTENTIALLY ONE MIGHT GET
ACCESS TO CUSTOMER DATA, THAT'S
WHAT I'M SAYING.
THERE ARE STRICT CONTROLS, VERY
LIMITED ACCESS, EVERY KEY STROKE
IS LOGGED SO THERE CAN BE
ASSURANCE THAT WE DON'T HAVE
ACCESS TO THAT DATA AND SO THEN
WE CAN'T BE FORCED TO TURN IT
OVER.
MARIA: IF THE CHINESE
GOVERNMENT SAYS TO YOU WE NEED
TO SEE THIS DATA, YOU ARE BY
LAW, CHINESE LAW, FORCED TO SEND
WHATEVER DATA TO THE CHINESE
GOVERNMENT.
YOU HAVE COMMUNIST MEMBERS OF
THE COMMUNIST PARTY ON YOUR
BOARD.
YOUR CHAIRMAN AND FOUNDER OF THE
COMPANY IS A MEMBER OF THE
COMMUNIST PARTY.
YES?
>> THE FACT IS, WE HAVE VERY
LIMITED ACCESS TO CUSTOMER DATA,
VERY LIMITED.
EVERY KEY STROKE --
MARIA: THE CHAIRMAN HAS DIRECT
ACCESS, SO DOES THE BOARD MEMBER
IF THEY'RE PART OF THE COMMUNIST
PARTY.
>> DOESN'T HAVE ACCESS TO THE
DATA OUR EMPLOYEES IN THE UNITED
STATES IN WORKING AND SUPPORTING
OUR CUSTOMERS, THEY DON'T HAVE
ACCESS TO THAT DATA.
EVERY KEY STROKE IS LOGGED.
IF ANY OF THAT DATA WAS
ACCESSED, THEN THERE WOULD BE
EVIDENCE A THAT IT WAS ACCESSED
AND THERE WOULD BE EVIDENCE IT
WAS SENT BACK.
WE DON'T HAVE THAT DATA.
MARIA: YOU KEEP SAYING YOU
DON'T HAVE THE DATA BUT YOU HAVE
TO COMPLY WITH CHINESE LAW.
AND THE COMPANY HAS COMMUNIST
MEMBERS ON THE BOARD AND THE
FOUNDER IS A COMMUNIST MEMBER.
SO THAT'S THE BOTTOM LINE.
WHAT ACCESS -- THE ACCESS IS
THERE.
AND IF THE CHINESE GOVERNMENT
WANTS ANY DATA, WHICH IS WHY
IT'S A NATIONAL SECURITY RISK,
YOU DON'T HAVE TO PROVE THIS TO
ME, ANDY.
YOUR COMPANY HAS TO PROVE THIS
TO THE WORLD.
>> YOU ARE INCORRECT.
WE DO NOT HAVE THE KIND OF
ACCESS TO DATA THAT YOU THINK.
SO YOU THINK THAT BECAUSE WE
HAVE ACCESS TO THIS DATA -- WE