Opinion: Huawei versus the US — Iran enters the chat, but where's the smoking gun?

tower gavel
The prosecution rests, Huawei's defense is underway in Brooklyn, but where is the espionage evidence, and why is so much of the alleged wrongdoing ancient history? (Microsoft Copilot image )

Additional reporting by Dan Jones

After seven weeks of testimony, the U.S. Department of Justice has rested its case against Huawei, and the Chinese communications giant has begun presenting its defense in federal court in Brooklyn, where it faces 12 felony counts involving racketeering, fraud, intellectual property theft and alleged violations of U.S. sanctions.

After weeks of proceedings that have generated remarkably little to get excited about, things are finally getting spicy.

The trial opened on Sept. 9 before Judge Ann Donnelly, more than six years after the DOJ filed its expanded indictment against Huawei in February 2020. Prosecutors have spent the intervening weeks presenting evidence of alleged trade secret theft, financial deception, dealings with Iran and North Korea, and a sprawling corporate conspiracy stretching back decades. Emphasis on decades. The indictment traces the alleged racketeering conspiracy all the way back to 1999. Yes, the last century.

Huawei has pleaded not guilty to everything.

For much of the trial, the proceedings have been surprisingly uneventful, at least from the perspective of those of us who have followed the U.S. government's long-running crusade against Huawei.

The prosecution has introduced evidence concerning T-Mobile's infamous finger-testing robot, Tappy; allegations of intellectual property theft involving antenna manufacturer Quintel; Huawei's relationship with Skycom in Iran; and the representations made by Huawei CFO Meng Wanzhou to HSBC about that relationship. There have been witnesses, documents, emails and enough historical corporate correspondence to keep an army of lawyers gainfully employed until retirement.

But not much in the way of courtroom fireworks.

There has been one notable exception: the decision to close the courtroom during testimony from several witnesses, excluding both the public and the press.

The secrecy attracted criticism from FNTV, including my earlier article, Huawei vs US trial goes dark — and that should bother us, and from journalist Matthew Russell Lee of Inner City Press, who challenged the closures in court. Get in there, Matt!

An unsealed judicial opinion subsequently revealed the government's concerns that witnesses with knowledge of Huawei's operations in Iran could face retaliation. Prosecutors cited threats from Iranian authorities and potential reprisals associated with the Chinese state.

So Iran enters the chat. And suddenly, the secrecy makes rather more sense.

These were serious concerns, not simply an attempt to conduct a politically sensitive trial behind closed doors. But the restrictions also made it harder for journalists and the public to evaluate some of the prosecution's evidence.

Which brings us to the question that matters most.

How compelling was the US government's case?

I haven't heard all the evidence, and neither has the public. The closed proceedings make any definitive assessment premature. But two things strike me as particularly significant.

The first is what this trial is not about.

For years, Washington's campaign against Huawei has rested on something considerably more emphatic than vague concerns about national security. Senior U.S. officials claimed to possess evidence that Huawei had covert access capabilities in telecommunications equipment deployed around the world.

In February 2020, President Trump's national security adviser, Robert O'Brien, publicly asserted that Washington possessed evidence of Huawei's ability to secretly access sensitive information in networks it supplied and maintained. American officials said they had shared classified intelligence with allied governments.

This wasn't simply a warning that Huawei might be dangerous. Washington was telling the world that it had evidence of a covert capability that could be exploited for espionage.

Six years later and — surprise! — the Brooklyn prosecution is not an espionage trial.

Instead, the DOJ has brought a complicated assortment of allegations involving this and that: intellectual property, financial transactions, sanctions and racketeering. The Iran allegations include claims involving surveillance, but they are not a prosecution for Chinese espionage through Western telecommunications networks.

These are serious charges. Some, if proven, would establish substantial corporate misconduct. But they are not the same as proving the allegation that did most to transform Huawei into a global security pariah.

And that leaves Washington exposed to two uncomfortable possibilities.

First, governments and telecommunications operators that accepted the American security narrative may begin asking why they should continue ripping billions of dollars' worth of Huawei equipment out of their networks on the basis of intelligence claims that have never been publicly substantiated in the way the industry had a right to expect.

The distinction is important. An acquittal would not prove that Huawei's equipment is secure. Equally, a conviction for bank fraud would not prove that its equipment has been used to spy on Western governments.

Second, an unsuccessful prosecution — particularly a failure to establish the alleged overarching criminal conspiracy — would instantly shatter the political credibility of Washington's broader campaign, especially among countries and carriers that have long resisted American pressure.

Ancient history

The second thing that strikes me is the age of the allegations.

Much of the alleged wrongdoing dates back to the 2000s and 2010s. Indeed, the DOJ traces its alleged racketeering conspiracy all the way back to 1999. Some of the events are so old that the engineers involved still had BlackBerrys. Or pagers. Or hair.

There is also the question of the statute of limitations, a legal term meaning, roughly, "you snooze, you lose."

For a RICO conspiracy charge first brought in February 2020, the government generally needs to establish that the alleged conspiracy continued into the preceding five-year period. It can certainly chuck in much older evidence, as it is doing, but it cannot simply prosecute a conspiracy that had already ended before the applicable limitations period. The precise cutoff depends on when the relevant charge was first brought, and a continuing conspiracy does not necessarily require a fresh criminal act within that period.

So here's the nub: has the DOJ demonstrated that Huawei was still operating a coordinated criminal conspiracy during the legally relevant period, or has it stitched together a collection of historical incidents and individual transgressions — the jurisprudential equivalent of an American quilt — to make its case? After all, there is a vast legal gulf between a decentralized, hyperaggressive sales culture — the kind of cutthroat corporate environment found at every major tech vendor on the planet — and an agreement to participate in a criminal enterprise, which is what a RICO conspiracy requires. At what point does a collection of corporate transgressions become evidence of a centrally organized criminal enterprise?

The jury will have to decide whether the stitching holds.

Hungry like the wolf

But enough of the legal minutiae.

Things in Courtroom 6F North became considerably more entertaining on Oct. 28, when Huawei called its first defense witness, Yang Chaobin, chief executive of its Information and Communications Technology (ICT) Business Group.

Yang testified about Huawei's innovation, intellectual property protections and corporate compliance procedures. He highlighted his involvement in the development of SingleRAN, a technology that allows operators to support multiple radio access technologies on a common platform.

Then came the cross-examination.

And, judging by Matthew Russell Lee's eyewitness account — a cracking read, by the way — Assistant U.S. Attorney Matthew Skurnik decided to get stuck in.

The questioning began innocently enough, with Huawei's prohibition on bribery. Skurnik established that Huawei prohibited payments to foreign state-owned companies and elected officials, and that such conduct would be inconsistent with a culture of compliance.

Yang agreed.

Then the prosecutor changed gear.

Was Yang aware, Skurnik asked, of allegations that Huawei employees in Belgium had bribed members of the European Parliament?

Yang said he had never heard of the incident.

Skurnik pressed him. Here was a member of Huawei's board of directors, one of the company's most senior executives, apparently unaware of a bribery allegation involving Huawei employees in Europe.

Yang repeated that he knew nothing about it.

The prosecutor began another question concerning the subsequent police investigation.

Objection! Sustained! Ping! Pong!

Judge Donnelly pointed out that the witness had already said he knew nothing about the incident. One imagines the defense table was rather pleased with that intervention.

But Skurnik wasn't finished.

He turned to Huawei founder Ren Zhengfei and the company's famous — or apparently not so famous — wolf culture, the aggressive, uncompromising commercial philosophy that has become part of Huawei's corporate mythology.

Hadn't Ren instituted this culture at Huawei?

Yang denied ever hearing of it.

Really? Never?

Apparently not.

The prosecutor then introduced the idea of a bloodthirsty approach to identifying marketing opportunities. Halloween was just around the corner, after all.

Yang responded that marketing employees should pursue opportunities energetically.

But was that not precisely the bloodthirsty philosophy the prosecutor was describing?

Yang wasn't buying it.

According to Lee, he replied:

"It's a basic requirement of any tech company to be sensitive to the market."

Which, to be fair, is not an unreasonable position for the CEO of a telecommunications equipment business.

Wolf culture? What wolf culture? We're just enthusiastic about selling routers.

(The exchanges above are reconstructed from Lee's contemporaneous courtroom reporting rather than an official transcript.)

The legal arguments are revealing.

The prosecution appears determined to establish that misconduct was embedded in Huawei's corporate culture. The defense is equally determined to show that a multinational company employing hundreds of thousands of people cannot be presumed criminal simply because some employees may have behaved unlawfully.

Neither proposition settles the case. RICO does not require every employee to participate in a conspiracy, and an effective compliance program does not automatically absolve a corporation of criminal responsibility.

But the distinction is central to what the jury must decide. And the argument has moved from alleged industrial espionage and international sanctions evasion to whether Huawei's executives are sufficiently familiar with the habits of carnivorous mammals.

Which is an excellent development.

The case Washington chose to bring

After seven weeks, the prosecution has rested. Huawei now has its opportunity to answer the allegations.

The jury will decide whether the government has proved its case beyond a reasonable doubt. The rest of us are entitled to ask a different question:

After years of fearmongering about Huawei, Chinese espionage and the threat to Western telecommunications infrastructure, is this really the case Washington wanted to bring?

Related reading | Stephen Saunders on Huawei and the US

Stephen M. Saunders MBE is a communications analyst, USPTO-registered inventor, founder of Light Reading and anchor of FNTV. He has covered the global telecommunications industry for more than three decades, examining the intersection of technology, industrial infrastructure, economics and geopolitical power.


Opinion pieces from industry experts, analysts or our editorial staff do not represent the opinions of Fierce Network.