The US website americanconservative.com reported that the Chinese Telecom company Zhongxing Telecommunication Equipment (ZTE) Corporation opted for an aggressive, extremely well-paid Chinese influence operation in Washington. It said the problems for ZTE began in March 2017 when the US Department of Justice alleged that ZTE had violated the Export Administration Regulations by illegally exporting U.S. material to Iran and North Korea 380 times, for which they were fined by the U.S. Bureau of Industry and Security (BIS) and placed on “probation” in a settlement. In April, BIS found that ZTE was in violation of the settlement, and on April 15 placed a Denial Order to halt the sale of any U.S. goods to ZTE, effectively crippling its ability to do business. ZTE then hired a lobbying firm. Specifically, on April 18, just three days after the Denial Order was issued, ZTE hired Hogan Lovells to address “national security concerns and issues relating to April 15, 2018 denial order.” Curiously, Hogan Lovells chose to report their representation of ZTE under the Lobbying Disclosure Act (LDA) rather than the much more stringent reporting requirements of the Foreign Agents Registration Act (FARA). The latter includes an exemption for firms that register under the less stringent LDA reporting requirements if they are representing private foreign corporations that are not connected to foreign governments or political parties. But it’s well known that ZTE isn’t a truly private company: in fact the US Congress has explicitly stated that ZTE and another Chinese telecommunications company, Huawei, “are not private companies.” Hogan Lovells’ choice to register under the LDA and not FARA was made even more suspect when a firm they hired to help represent ZTE, Mercury Public Affairs, registered it’s work under FARA on May 24, more than a week before Hogan Lovells reported that it was representing ZTE. Had Hogan Lovells registered under FARA, everyone would have known nearly a month earlier that the firm was working to avoid punishment for an admitted sanctions violator. While transparency may be lacking in this influence operation, lobbying firepower isn’t. Hogan Lovells reported that former senator Norm Coleman was working on the ZTE contract. Coleman is fresh off a victory lap following Trump’s withdrawal from the Iran deal, a move cheered by his client, the Embassy of Saudi Arabia. Mercury Public Affairs brings firepower of its own in the form of Bryan Lanza, the former Trump advisor. Though Lanza has yet to personally register as a lobbyist for ZTE, he’s known for anticipating the Trump administration’s moves, and is currently lobbying to remove sanctions on Russia. The amount ZTE has spent on this lobbying operation (only Mercury has reported its fee of $75,000 per month) is not clear. On June 7, Reuters reported that a deal had been reached to lift the Denial Order and get ZTE back in business, albeit with steep financial penalties.
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