Sunday, December 8, 2013

Global Impact: DNI Advisor Served As Paid Consultant to Chinese Firm Labeled as Espionage Threat Forced to Resign

According to The Boston Herald and The Associated Press, a long-term adviser to the US Director of National Intelligence has resigned after the government learned he has worked since 2010 as a paid consultant for Huawei Technologies Ltd., the Chinese technology company the US has condemned as an espionage threat.

Theodore H. Moran, a respected expert on China's international investment and professor at Georgetown University, had served since 2007 as adviser to the intelligence director's advisory panel on foreign investment in the US. Moran also was an adviser to the National Intelligence Council (NSC), a group of 18 senior analysts and policy experts who provide US spy agencies with judgments on important international issues.

This matter highlights the ongoing and contentious relationship between the US government and Huawei, China's leading developer of telephone and Internet infrastructure, which has been condemned in the US as a potential national security threat. Huawei has aggressively disputed this, and its chief executive, Ren Zhengfei, has said the company has decided to abandon the US market. 

COMMENT: Moran, who had a highly sensitive security clearance until recently, granting him access to sensitive materials, after Rep. Frank Wolf (R-VA), complained in September to the intelligence director, James Clapper, that Moran's work on an international advisory council for Huawei "compromises his ability to advise your office."

"It is inconceivable how someone serving on Huawei's board would also be allowed to advise the intelligence community on foreign investments in the US," Wolf wrote.

Although Moran, who earlier had refused to discuss his concurrent relationships with both the NSC and Huawei's advisory board, should have known that such a grievous conflict of interest would have resulted in the revocation of his security clearance granted by the NSC for cause.

A spokesman for Clapper's office confirmed Friday that Moran was no longer associated with the intelligence council "effective September 2013," but declined to answer further questions.

In a policy paper distributed by Huawei, Moran wrote in May 2013 that, "targeting one or two companies on the basis of their national origins does nothing for US security in a world of global supply chains." Moran criticized what he described as "a policy of discrimination and distortion that discourages valuable inward investment from overseas, while providing a precedent for highly damaging copycat practices in other countries."

The House Intelligence Committee last year said Huawei and another firm, ZTE, posed a threat that could enable Chinese intelligence services to tamper with American communications networks. The committee said it could not prove wrongdoing, but recommended that the companies be barred from doing business in the country.

Huawei's vice president for external affairs, US citizen and former US Foreign Service Officer (FSO) William Plummer, declined to discuss Moran's resignation, but said US suspicions about Huawei have created "a political smokescreen...Huawei is no threat to US networks and data."

Earlier this year, as a condition of allowing SoftBank Corp. to buy Sprint for US$20.1 billion, the Obama Administration forced the companies to promise not to use Huawei equipment and seek approval for future vendors.

In 2007, Huawei joined with Bain Capital, the private equity firm founded by Republican presidential nominee Mitt Romney, to buy 3Com, a US computer equipment firm. The bid collapsed amid national security concerns cited by Congress and the US Committee on Foreign Investment in the United States.

Last month, two Senate committee chairmen asked Clapper about the potential national security threat posed by Huawei's growing partnership with South Korean telecom firms. Interestingly, Clapper would not describe Moran's duties for its panel on foreign investment or the National Intelligence Council. Clapper also did not explain why Moran was forced to step down, three years since he had been hired by Huawei. 

Wolf, in a letter to the intelligence director, asked Clapper for a list of other members and advisers to the National Intelligence Council and a copy of its conflict-of-interest policy, but he never received the information. 

So much for the most transparent executive branch in US history.

As a final note, why has the US Department of Justice not asked Attorney General Eric Holder to review Ted Moran's possible violation of US intelligence regulations? Very likely because Holder would no doubt respond that Moran has committed no violation of US law. 

If so, why did Representative Wolf force Moran's resignation from the NSC?