Law firm faulted over work for China's ZTE Corp

WASHINGTON, Sept 13 Thu Sep 13, 2012 7:12pm IST

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WASHINGTON, Sept 13 (Reuters) - DLA Piper, a global law firm noted for high-profile attorneys, should rethink its work for China's ZTE Corp, two Republican members of the U.S. House of Representatives urged.

Representatives Sue Myrick of North Carolina and Frank Wolf of Virginia, staunch critics of China's human-rights record, sent the request to DLA Piper on Thursday.

It was timed to mark a rare open hearing of the House Intelligence Committee, which is investigating security threats allegedly posed to U.S. telecommunications networks by products marketed by ZTE and China's closely held Huawei Technologies Co .

Shenzhen-headquartered ZTE is in the world's fifth-biggest telecommunications equipment maker. Huawei, also based in Shenzhen, is the second-biggest after Sweden's Ericsson .

The letter faulted DLA Piper for helping ZTE "as it attempts to circumvent U.S. government concerns" to gain a larger share of the U.S. market.

"By publicly representing and advising the ZTE Corporation, your firm is indicating it values the retainer of one contract over the legitimate cyber security and supply chain concerns of the United States government," the lawmakers wrote.

Their letter was addressed to Frank Conner, managing partner of the firm's Washington office, and Richard Newcomb, a partner who is chair of the firm's International Trade practice group. Newcomb served as director of the U.S. Treasury Department's Office of Foreign Assets Control from 1987 to 2004.

DLA Piper attorneys did not respond to a request for a comment. ZTE, which is publicly traded, has denied allegations that it is in some way subject to control by the Chinese authorities.

The lawmakers' letter also cited Commerce Department and FBI investigations following reports by Reuters that ZTE had supplied Iran's largest telecommunications company with a powerful surveillance system as well as embargoed U.S. computer equipment. Sales of the equipment to Iran are banned under U.S. sanctions aimed at deterring Iran from developing nuclear weapons.

ZTE allegedly sought to provide the Telecommunications Company of Iran, an Iranian government-controlled entity, with surveillance technologies that would give it the ability to monitor mobile, landline and Internet communications, they wrote, citing a Reuters report in March.

An FBI affidavit, mistakenly released and published in part online, cited alleged discussions among ZTE employees in China about whether to try to cover up shipments to Iran of the embargoed U.S-origin hardware and software cited in Reuters reports.

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