Under Fire By U.S. Regulators, Chinese Telecom Giant Lobbying Jumped Sixfold in 2018

Bergen Smith | June 10, 2019

A Chinese telecommunications giant banned from purchasing key electronic components from the United States increased its Capitol Hill lobbying sixfold last year, according to federal records examined by MapLight.

ZTE Corp., the Shenzhen-based company whose lobbyists include former Democratic vice presidential nominee Joe Lieberman, was slapped with a seven-year ban in April 2018 for making false statements about its sales of equipment to Iran. The ban was reversed in July 2018 after it paid a $1.4 billion fine, replaced members of its board, and created a new compliance team.

The company, which spent $570,000 in lobbying in 2017, shelled out $3.7 million in 2018, with more than 97 percent of its lobbying expenditures occurring after the April 2018 ban. During the first quarter of this year, ZTE already has spent $1.4 million on lobbying.

The increase in ZTE lobbying highlights the ability of foreign lobbying to influence the U.S. government, even when national security concerns exist. The company’s rival, Huawei Corp., currently faces being shut off from U.S. supplies and the U.S. market because of concerns that its equipment could be used for espionage by the Chinese government.

President Trump issued an executive order last month that allows the U.S. to ban electronic equipment from “foreign adversaries” that was largely seen as targeting Huawei. The White House also limited Huawei’s ability to acquire U.S. technology by requiring suppliers to obtain a government-approved license, basing its crackdown on January federal indictments charging the Chinese company with stealing intellectual property and breaking sanctions laws.

Huawei, also based in Shenzhen, has spent considerably less on lobbying than ZTE. During 2017, it spent $70,000. Last year, its lobbying bill rose to $165,000. So far this year, the company has reported spending $55,000 on Capitol Hill.

This story was produced by MapLight and published in partnership with Fast Company.