Chinese telecom giant ZTE bribed and spied on Libyan officials to undermine a U.S. company and get a telecommunications network contract, court documents allege.
In sworn statements, two senior executives at Liberia Telecommunications Corporation (LTC) said ZTE officials offered them 5 percent of the contract’s value if they would sabotage the U.S. company by giving them the contract, Fairfax Media reported on Thursday.
Court documents reveal that ZTE’s bribe — which included another “$30,000 in cash in a ‘brown paper bag’ … at a hotel in Liberia” to Alfred D. Bargor, a deputy managing director of LTC — was successful in undermining the contract with the U.S. company, Universal Telephone Exchange (UTE) Inc.
The managing director of LTC, Amara M. Kromah, was also offered the same bribe and said he received at least two “brown paper bags” of cash as well, he said in a testimony.
ZTE denied any wrongdoing, saying it “maintains a high standard of ethics and integrity in its business activities throughout the world,” the company told Fairfax Media in an email.
“ZTE has established, maintained and continually improved its anti-bribery management system as per applicable laws and regulations and in line with best practice in the industry,” a spokesman said. (RELATED: Malware Discovered Pre-Installed On Android Devices Including Chinese Company ZTE)
The company was allegedly built partially for the purpose of gathering military intelligence, according to the court documents.
“China’s Ministry of Aerospace founded ZTE as a front to send officers abroad under non-diplomatic covers such as scientists, businessmen and executives for the purpose of collecting intelligence,” the 191st District Court of Dallas documents reveal.
The company, which has close ties to the Chinese government, was banned from U.S. military bases for security purposes, The Daily Caller News Foundation reported on May 3.
“ZTE devices may pose an unacceptable risk to Department’s personnel, information and mission,” Army Maj. Dave Eastburn, a Pentagon spokesman, said in a statement. “In light of this information, it was not prudent for the Department’s exchanges to continue selling them to [Defense Department] personnel.”
ZTE products were also banned in the U.S. on April 16 for seven years for violating U.S. sanctions on Iran and North Korea, Reuters reported on April 16.
President Donald Trump is currently renegotiating a trade deal with China and the ZTE controversy is supposedly at the heart of it.
Trump said in a May 25 tweet, “I closed it (ZTE) down then let it reopen with high level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine.”
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