For more than five years, Dick Roche, the former cabinet minister, has lobbied for Huawei, the controversial Chinese telecoms company that has been the subject of a US-led trade offensive. 

A former Fianna Fáil TD, Roche served as Minister for the Environment and Local government and also as Minister for European Affairs. Since leaving frontline politics, he has worked as a public affairs lobbyist, primarily in Europe.

Recent filings show he expects to earn up to €200,000 this year as a lobbyist for Huawei. Roche has publicly criticised the US salvo against the company.

Roche offered to write a comment piece on Huawei and cybersecurity. We agreed to publish the piece on the condition that he agreed to an interview to address many of the wider issues related to the company that were not covered in his opinion column. He agreed and did not set any preconditions for the interviews.

Below are the transcript of the interview and his opinion piece. 

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Ian Kehoe (IK): How does a former government minister end up working with Huawei?

Dick Roche (DR): It was quite extraordinary. I had a number of consultancies in Brussels. I literally bumped into the chap who at the time was the head of their European office. We had a conversation and he started talking to me about Huawei. I said I was very interested. The following week, I was in Brussels and I bumped into the same man and he asked me would I give them some advice about how they would deal with the European institutions. That is it. No big introductions or anything. 

IK: Did you feel conflicted working for a company many feel is controlled by the Chinese government?

DR: Not at all. I was very interested in the company. Before I said yes, I did a bit of research. I was fascinated by their structure – this is a really extraordinary arrangement that the workers own the company. Everyone says that it is the Communist Party that owns the company, but if you read the Clifford Chance report, it is very clear. The company is quite unique. And that unique structure gives it quite remarkable attributes. 

I visited the company in Shenzhen. One of the things I found was that there is an extraordinary identity between the company and the workers in it – even relatively low-level workers. There is a sense of ownership and belonging. The bonus arrangements that they get at that company are amazing. More importantly, the structure of the company allows it to take a really long view, something that we have lost sight of in the west with large companies looking to the next quarter. 

IK: The argument from critics is that all Chinese trade unions are controlled by the Chinese Communist Party and that therefore it is not a privately owned company.

DR: That is a completely perverse interpretation of what has happened here. It is a complex structure and it is hard to get your head around it – there is no doubt about that. The trade union has two functions. It represents the workers. And it is also where the workers’ interest in the company is reposited. It is just frankly nonsense to suggest, as was in the House of Commons, that it is really owned by the Communist Party in China. It is not the case. Modern China has private ownership. That is a fact.  I looked at the Huawei debate in the House of Commons, it was astonishing – the amount of misinformation and disinformation that was hurled across the chamber as if it were in fact. Oddly, much of it came from the Brexiters. 

“[Trump] wants to use any leverage he can to force concessions from China. That is a trade war.”

Dick Roche

IK: It is a ‘Trump’ thing. Given that none of Huawei’s main competitors, Nokia, Ericsson or Samsung are U.S. companies, what or who is Donald Trump so motivated to protect?

DR: That is correct but that is not the point. 

IK: But who is Trump so motivated to protect if not his own companies?

DR: This is a bare-knuckle power grab. In the American administration, or should I say the Trump administration, there are two motivating factors. One is that it is a bare-knuckle fight with the Chinese on trade. He wants to use any leverage he can to force concessions from China. That is a trade war. 

But there is a deeper issue too. The deeper issue is one of political dominance. The one thing that Mr Trump and his administration do not want above anything else is any other bulls in the field, any other powerful people out there. Their paranoia in this debate is profound. And profoundly dangerous.

IK: You differentiated between the Trump administration and the American administration. But the Democrats have been vocal on the issue also, with Nancy Pelosi, Chuck Schumer and others sounding the alarm also.

DR: That is actually true. There is an active senate lobby against Huawei and that actually comes from US security agencies. Are we in the rest of the world going to allow people like the NSC to make our policy? I think not. With all due respect, I am not an American critic by any means. I have a fond regard for the United States, but if you go over their history, you can see how their intelligence agencies drive their policies. The paranoia within these agencies is quite extraordinary. 

Public policy should be made on fact. If you actually look at Huawei, the NSA and the CIA and US intelligence agencies have focused to an extraordinary degree on Huawei. Huawei operates across 150 countries. It supplies all of the major networks outside of the US. It has done so for 30 years. it is the most profoundly scrutinised company. In the UK for example, there is a relationship between UK intelligence – they have this centre at Banbury where they cooperate with Huawei and they examine everything right down to Huawei source codes. No company in the world is more scrutinised. 

IK: It has been scrutinised in Australia, the US, the Czech Republic and so on. But there has been very little here.

DR: We don’t have the resources. But it has been scrutinised in Germany and in France. The reality of it is when you boil it all down, there is no company that has been more scrutinised. Over three billion phone users who make calls do so via Huawei equipment. They are profoundly concerned about their reputation and will not do anything to impact that reputation. If you look at Vodafone in the UK, they value their reputation, and if they believed there was a problem they will go to Nokia or to Ericsson.

IK: How come it is able to arrange much cheaper vendor finance than anyone else? Critics say this gives it a competitive advantage.

DR: This is an allegation that is thrown around the place that they get cheap funding from the Chinese government. I have seen no evidence that this is more true than of any other company. I think the big selling point is that they are ahead of the technology and this goes back to the issue of its ownership structure and the fact that it puts so much into research and development.  They are actually registering their patents in Europe – compare and contrast that with the US. 

IK: Huawei is slowly losing bits of European network business such as UK limiting it to max 35 per cent of 5G networks because of the long-term US strategy of marginalising it. How can it hope to beat the across-the-board, long-term lobbying of the US?

DR: I think that is a challenge, but if you take a whole world picture, you can see how they are at the front of a lot of other areas in the world. They have their huge home market, and if you extend it to Asia, there is a vast market. They have a vast market in Africa and in South America. This company is in a position to take a long view. That is embedded into their whole philosophy. Their outlook is so different to that of other, western companies – they are very calm, very focused. 

IK: In Ireland, Huawei lost out to Ericsson in Three’s 5G procurement process, with Three execs acknowledging unease among some of its multinational corporate customers at the involvement of Huawei. Doesn’t it have a serious problem in the long term?

DR: I took a decision with the company not to get involved in the Irish element. Chinese walls there, so to speak. I don’t get involved in Ireland. 

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Below is the opinion piece written by Dick Roche. 

Cybersecurity:  “Stoking fears and acting on them… is the path to ruin”

I have been advising Huawei for a number of years. Over that time I have been struck by the reluctance to adopt a fact-based approach to discussions about the company. 

Most striking of all has been the scorched earth approach of the current US administration. The approach is dangerous, foolhardy and illustrates a breathtaking double standard. 

Shakespeare’s observation that “suspicion always haunts the guilty mind” sums up the approach of the US to Huawei.  

Recently The Washington Post and the German public broadcaster ZDF revealed an extraordinary arrangement entered into by the CIA and Germany’s BND in 1970. The two intelligence agencies bought the Swiss company Crypto AG whose products were widely used by governments around the world to ensure confidentiality in politically sensitive communications. 

By inserting encryption weaknesses, ‘back-doors’, in Crypto’s equipment the new owners spied on the governments and state agencies of over 100 countries including many European states and made a profit while doing so.  The CIA bought out the BND interest in the early 1990s and continued to profit in cash and intelligence from its Swiss investment, until 2018 when it sold Crypto. 

The revelations about Crypto barely merited a shrug from Washington. Those who adhere to the US Administration’s line on Huawei ignored it. 

US agencies have form in this. The documents released by Edward Snowden in 2013 highlighted extensive global US Internet and phone surveillance by the NSA.

When directly challenged to produce evidence against Huawei, US intelligence agencies see no need to do so: their suspicions are enough to go on as were their absolute convictions about ‘weapons of mass destruction’ in Iraq which did so much damage. 

What are the facts?

Huawei is a remarkable company. Starting life in China as a small private company in 1987, it has become the leading global provider of information and communications technology (ICT) equipment and the second largest smartphone maker in the world.  It is a Fortune Global 500 company, ranked in the Top 100 Global Brands.

Huawei is a trusted partner of leading telecom operators in Europe and across the world. Its equipment is sold in 170 markets and serves over 3 billion phone users worldwide.

Research and development has been a key to Huawei’s success. The company reinvests a minimum of 10 per cent of annual revenues in R&D. Between 2009 and 2018 it spent over US $ 70 billion on R&D. 

Huawei operates 23 research centres in Europe, is an active participant in EU research programmes and partners with over 150 European universities and research institutes. It has registered over 10,000 patents in Europe.  

In spite of its global status, Huawei is a private company owned by employees. 

Cybersecurity

The main focus of attention on Huawei is cyber security in 5G. 

Huawei has a solid track record in cyber security. It holds over 220 cyber security certifications globally.  It is the most audited, inspected, reviewed and critiqued global ICT equipment supplier in the world. 

Attacks on Huawei ignore this and overlook the fact that the company does not operate telecom networks – it supplies ICT equipment, handsets and a range of other goods. The major global telecom operators who buy their equipment from Huawei care about their reputation and about network integrity– it would be commercial suicide not to do so.

In spite of the intense scrutiny that has been focused on it no ‘back-doors’ or malicious malware have been demonstrated in Huawei equipment.

US paranoia comes with a cost

The US decision to ‘weaponise’ the global supply chain in its war with China poses a major threat to the rules based global trading system.  Major international players have signaled alarm at the damage than can be done. 

In February, the president of the US semiconductor industry association urged those who say the damage of Mr Trump’s policy is exaggerated “should talk to the US semiconductor industry workers who are losing their jobs…” 

Huawei is a big customer for Europe. In 2018 it sourced goods and services valued at over €5.65 billion across Europe. It has committed to spending €35 billion sourcing services and parts from Europe between 2019 and 2023. Disturbing that will hit European jobs.

“Stripping Huawei equipment out of existing networks across the EU 27 could cost EU consumers many billions of euros.”

Dick Roche

The direct costs for mobile network operators are potentially huge. In February, Vodafone’s CEO put the price tag of stripping Huawei out of Vodafone’s UK network at €230 million. The cost for BT is estimated at over €570 m.  Research commissioned by Mobile UK, the trade organisation for the mobile industry, estimated the overall cost of excluding Huawei ranges between £5.1 and €7.9 billion and delay 5G rollout.  

Stripping Huawei equipment out of existing networks across the EU 27 could cost EU consumers many billions of euros. 

The cost does not stop with adjusting existing infrastructure. Limiting the role of the world’s largest ICT supplier from Europe’s 5G build-out will cut competition, limit equipment choice, impact on rollout timetables, and shove up costs.  Most ironically of all, limiting the number of suppliers could increase security risks.   

Last year the American economist Jeffrey D Sachs questioned the US attack on Huawei.  He warned that “stoking fears and acting on them rather than on evidence is the path to ruin”.  Sticking to rationality and evidence is, he suggested, the best way forward. He proposed that independent monitors are the better way to protect against threats. 

The EU Commission’s 5G security toolbox launched in January proposes an approach to mitigating cybersecurity risks in Europe’s 5G networks that espouses an objective and fact-based approach that looks very much in line with Sachs’ call for rationality and evidence. 

Ultimately, US policy on Huawei is not about cybersecurity, it’s about bare-knuckle politics and the US belief in its right to determine global affairs and make nations bend to its will when determining their sovereign policies. 

The outpourings from President Trump’s acting chief of staff, Mick Mulvaney, of Secretary of State Pompeo and US Defence Secretary Mark Esper in their efforts to strong-arm the UK government on 5G are a sign of what the EU Member States can expect as they determine their policies on 5G. 

Cybersecurity is a complex issue – it is not a political football – forgetting that will be costly. 

Dick Roche is a former Irish Minister for European Affairs and Former Minister for the Environment.