A bipartisan report from the House Intelligence Committee accuses two major Chinese telecom companies, Huawei and ZTE, of being major threats to national security. According to the report, the risk is so great that these companies should be banned from buying into American firms.
While the House Intelligence report stopped short of calling for a boycott of the firms' mobile phone products, it was highly critical of the two companies.
"China has the means, opportunity and motive to use telecommunications companies for malicious purposes," the report says.
"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."
The panel said their investigation had received credible allegations from current and former Huawei employees of bribery and corruption, discriminatory behaviour and copyright infringement.
Republican committee chairman Mike Rogers said they had passed on information to the FBI to investigate the allegations.
"We've come to the conclusion, unfortunately, they are not private entities, " Mr Rogers said on Monday.
Read the report, which Rogers co-authored with the committee's ranking member, Dutch Ruppersberger,
here. It claims that Huawei and ZTE stonewalled when asked about their ties to the Chinese government. The committee was particularly unnerved by reports that the Communist Party has a committee within both companies, but neither Huawei nor ZTE were forthcoming about how much influence those committees had in their operations. It was particularly critical of Huawei, which refused to provide information about its corporate structure and history. ZTE was little better--it claimed that if it answered the committee's questions about its corporate activities would violate China's state secrets laws.
Rogers and Ruppersberger tipped their hand last night on 60 Minutes. They think that if Huawei is allowed a hand in communications infrastructure, it could open a Pandora's box.
ZTE and Huawei have been under fire for some time. Huawei was founded by a former PLA officer and military intelligence expert, and since then has faced scrutiny over its ties to the PLA. ZTE has roots in some Chinese state-owned companies linked to the Chinese aerospace ministry. Earlier this year, they came under fire for reportedly including backdoors that could allow someone to gain control over their products. No word yet on whether the committee bought the companies' explanation that these backdoors were software glitches.
Nonetheless, if you've got a phone from either of these companies, you might want to trade it in.