Pentagon Bans Chinese-Made Smartphones From Military Exchanges

(Bloomberg) -- U.S. military exchanges have stopped selling smartphones made by two Chinese firms after the Pentagon warned the devices pose a security risk to military personnel and operations, the Defense Department said.

With locations around the world, the stores sell everything from razors to laptops but will no longer be carrying mobile phones and related products manufactured by Huawei Technologies Co. or ZTE Corp. The Pentagon said it could not specify the technical aspects of the threats.

“Huawei and ZTE devices may pose an unacceptable risk to department's personnel, information and mission,” Pentagon spokesman Major Dave Eastburn said in a statement on Wednesday. "The department is evaluating the situation and will determine the necessity of issuing further guidance."

Representatives of the two companies could not be immediately reached for comment.

FBI Director Christopher Wray told a Senate committee in February that “we're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks.”

Ren Zhengfei, the founder of Huawei, is a former People's Liberation Army officer and has close ties to the Chinese government, according to American intelligence officials. The story was previously reported by Stars and Stripes.

In 2012, a report by the House Permanent Select Committee on Intelligence said that ZTE and Huawei were possible threats to American security interests. The committee said Huawei did not fully cooperate with investigators.

The report questioned Huawei's ties with the Communist Party and -- after multiple interviews that included a meeting Ren himself -- it concluded that Huawei failed to properly explain that relationship. Huawei has consistently denied those accusations and says it's owned by Ren and its own employees.

Separately, the FBI and other agencies have been investigating Huawei over possible Iran sanctions violations. Last month, a spokesman for the company declined to comment on that investigation or an earlier sanctions inquiry.

To contact the reporter on this story: Daniel Flatley in Washington at dflatley1@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, John Harney, Jon Morgan

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