How the Huawei case raised concerns about ‘hostage diplomacy’ by China

WASHINGTON – Negotiations between the Justice Department and a top executive at Chinese telecommunications company Huawei have been going on for more than 12 months, with two presidential administrations and a major controversy erupting: whether Huawei’s founder’s daughter Meng Wanzo admits a mistake.

Since her arrest in 2018, she has refused to admit that she misled global banking company HSBC about Huawei’s dealings with Iran a decade ago, even though it was in Canada. The key to her release was where she was. Its guarantee give Luxurious home in Vancouver. In mid-September, with a Canadian judge deciding whether to extradite him to the United States, federal prosecutors told Ms. Meng’s lawyers that they were ready to move away from settlement negotiations, and Ms. Meng is ready to bring in tech royalties. For trial in Brooklyn, China.

Then came a breakthrough: on September 19, after a new lawyer filed a lawsuit on her behalf, she agreed to a “statement of facts” that the Justice Department believes would continue its ongoing lawsuit against Huawei. I would be valuable – a company that has been at the crossroads of the Department of Justice and the US National Security Agency for years.

Five days later, Ms. Meng was on a plane back to China to receive a hero. The two Canadians, who were held hostage primarily by Trump’s allegations, were returning to Canada with two young Americans who had been denied entry to China for three years because of their father’s case. Chinese authorities searched for him.

The seemingly well-organized exchange – the details of which were confirmed by government officials, diplomats and others with knowledge of the legal case – raised a number of questions. Was this the first sign of a breakdown in relations between Washington and Beijing that has no precedent in modern history? Was it a face-saving victory for both sides, who regained their citizens, and ended the rift in the relationship that emerged in a recent call between President Biden and President Xi Jinping last month? ?

Or was it the use of a phrase for China’s “hostage diplomacy” that appears in an indictment sent to Attorney General Merck Garland by Indiana Representative Jim Banks on Tuesday.

Mr Banks wrote of Meng: “Let him go without slapping him on the wrist.” This is a dream come true for Iran, Hamas, Russia, North Korea and every institution that has been affected by our sanctions.

White House officials, from press secretary Jane Sackie to policymakers who are developing strategies to deal with the complexities of simultaneously competing, overcoming and cooperating with China, have denied the allegations. Let’s say there is some kind of agreement – or any change in it. China’s policy is “no link,” Ms. Saki said.

The Chinese told another story, filling their press and social media with stories depicting Ms. Meng as a victim. In his statement, the charges against him were revenge for China’s efforts to wire the world with Chinese-led 5G networks.

The immediate release of two Canadians and two Americans, some senior Washington officials believe, was designed to make it look like a political decision despite protests from the Biden administration – not an independent decision by prosecutors, which the White House insists. A senior administration official said it was in China’s interest to equate it with the exchange of Cold War spies, as it would state that Meng would promote Huawei’s business worldwide. They are not guilty of anything other than that.

(Finally, she agreed to an adjournment prosecution agreement, which would eliminate all charges, with a joke disappearing from the Chinese accounts as well as a mention of her “statement of facts”). .)

“We can’t determine how the Chinese or others manage their business there,” Ms. Saki said Monday. “It’s a little different.”

But Meng’s arrival in China also eased Huawei’s long-standing insistence that it be completely independent of the Chinese government and that its networks would never be controlled by government officials. When they landed, the ceremony was broadcast live on state television and the buildings were lit up in celebration. The People’s Daily called it a “great victory for the Chinese people” that would pave the way for other victories. He spoke of his loyalty to the Communist Party, and to a company operating under Chinese laws and guidelines.

In Washington, Huawei has long been the focus of US fears of technical dependence on Chinese companies. Classified and unclassified studies have discovered the degree to which they can use control of their global networks to redirect or block Internet traffic. Documents released eight years ago by Edward J. Snowden revealed the National Security Agency’s covert operation against a “shot giant” called Quad to gain access to Huawei’s network and understand the company’s ownership.

The Trump administration sought to stem the spread of the Huawei network by threatening to cut off European countries from US intelligence. The Biden administration has sought to adopt a softer approach, including promoting technologies that provide competitive alternatives to US companies and their allies. Meng’s release has not changed that, officials insist – and they suspect China is now ready to discuss with the United States a range of other issues, from cybercrime to trade disputes.

“I don’t think anything has changed significantly, which means China has to play by the rules,” Commerce Secretary Gina Raymondo told NPR on Tuesday.

Despite a lot of riding in the geopolitical race, despite Meng’s three-year detention in Canada, the prospect of a deal for Meng’s release seemed bleak a month ago.

Shortly after Canada detained Meng, 49, at Vancouver International Airport, China arrested two Canadians, Michael Coorg, a former diplomat, and a businessman, Michael Spore. He was charged with espionage.

Ms. Meng’s arrest also complicated hopes that China would allow two American siblings, Georgetown University student Victor Liu and McKinsey & Co. consultant Cynthia Liu, to leave the country. President Donald J. Trump discussed the Liu brothers and sisters with Chinese President Xi Jinping at a summit in Argentina in late 2018, said Ivan Maders, a professor at Georgetown University.

But Meng was detained at the end of the summit, and a former senior Trump administration official who was present at the ceremony said he hoped the two young Americans would be released. China has kept the fact that its fate lies in the case against Ms. Meng, and thus the case against Huawei.

Like many who have detailed the case, the former official asked not to be named to discuss sensitive issues.

Talks were revived in May when Meng hired William W. Taylor, a Washington power lawyer, who won a criminal verdict in another high-profile case involving a prominent Washington attorney. Was Meanwhile, Canada began pressuring Washington to do something about the two Canadians imprisoned in China. Prime Minister Justin Trudeau publicly demanded his release, and the case has been a frequent topic of discussion with US diplomats.

But administration officials insist the Justice Department has been spared.

Administration officials say President Xi also raised Meng’s fortunes, with Mr. Biden remaining silent during a recent phone call with Mr. Biden on September 9. But he will not say that, at the time of the call, he was aware of discussions with the Justice Department about a possible pending prosecution agreement with him.

A week later, the Justice Department told Meng’s team that she would withdraw from the agreement unless she admitted her wrongdoing. Although Justice’s lawyers knew they could lose the extradition case, they feared the department’s lawsuit against Huawei could fail without evidence of what happened in an attempt to sell telecommunications gear to Iran. And he did not want to leave the precedent that Beijing should strengthen the way out of legal accountability.

On September 19, Mr. Taylor told the prosecution that he would compromise, presenting a “statement of facts” in which there would be no error – and no penalty. Although the statement basically acknowledges all the allegations made against him by the department, the formal application will be “not guilty”.

The Justice Department can now use its statement as evidence in the Huawei case. Apparently, he is pursuing the case aggressively: a few days after the deal was announced, the prosecution filed a lawsuit claiming that it had obtained Huawei’s financial records.

Dan Belefsky. And in Montreal Michael Forsythe Assisted in reporting in New York.

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