Chinese tech giant Huawei is embroiled in a major corruption scandal, in which the company is suspected of having bribed members and employees of the European Parliament to challenge the E.U.’s position against adopting Huawei’s 5G technology. A cross-border corruption investigation, involving raids on 21 homes in Belgium and Portugal, has resulted in Belgian prosecutors bringing charges against five people. This saga highlights the E.U.’s continued vulnerability to bribery by foreign entities and the varied forms of Chinese influence in Europe. On Wednesday, Laura Dubois at the Financial Times provided more details about the investigation and the Huawei lobbyists who were detained:.
The investigation was launched earlier this month, and Belgian authorities last week arrested four people on charges of corruption and being a member of a criminal organisation. A fifth person was charged with money laundering but released after questioning.
Among the arrested suspects is a lobbyist for Huawei who used to work as an assistant in the European parliament. He is suspected of orchestrating the payment of bribes to parliament workers — notably to secure support for a letter several MEPs signed defending the Chinese company’s interests.
[…] The letter, signed by eight EU lawmakers and sent to the European Commission in January 2021, warns about the “politicisation of the deployment of 5G technology” and criticises the ban of foreign 5G devices based out of an “unsubstantiated fear of national security risks”.
[…] Two people familiar with the investigation said the alleged bribes also included offers of Huawei smartphones and tickets to see a match of the local Anderlecht football team. [Source]
According to the investigative judge in charge of the Belgian probe, “A sum of €15,000 [over $16,000 U.S. dollars] was offered to the writer of the 5G letter, while each co-signatory was offered €1,500,” and “suspicious payments” worth tens of thousands of euros were allegedly arranged in exchange for the related services. Huawei said it takes the allegations “seriously” and has a “zero tolerance policy towards corruption or other wrongdoing.” After the corruption case was announced, E.U. institutions expelled Huawei lobbyists from their premises, but some lawmakers expressed concern about loopholes that the lobbyists could use to circumvent the ban, including using a visitor pass or lobbying through umbrella trade associations that continue to represent Huawei. Last week, Politico described Huawei’s extensive record of lobbying within the E.U.:
The company threw lavish parties in glamorous venues featuring fancy buffets and dance performances — like its reception celebrating the Chinese new year at the Concert Noble in Brussels — and was known for thanking contacts with generous gift bags, some including a Huawei phone.
[…] To navigate the geopolitical storm [over security and espionage concerns that spiked after 2019], the firm offered six-figure salaries to former Western journalists and politicians with direct lines to places of power like the Elysée and Westminster.
[…] According to EU transparency register data, Huawei Technologies spent between €2 million and €2.25 million on EU lobbying in 2021, 2022 and 2023 — a lot, but still below its lobbying costs in preceding years, which were estimated at around €3 million in 2018, 2019 and 2020.
Huawei in October declared it had 11 full-time EU lobbyists, nine of whom were accredited to access the European Parliament. At its peak it declared 21. [Source]
On Monday, Alexander Fanta and Simon van Dorpe at Dutch investigative news outlet Follow the Money published an article about the scandal, underlining the alleged, long-running role of top Huawei executives:
The bribery allegations, including the amounts allegedly paid to the signatories, correspond to a complaint that the NGO Transparency International EU received in 2022 and forwarded to the EU anti-fraud office OLAF. However, OLAF decided not to open an investigation, stating there was “no sufficient suspicion”.
[…] According to the arrest warrant, the money transfers intended to disguise the bribes “would have been endorsed by the Chinese executives of Huawei, in particular Abraham Liu”, who at the time was the company’s vice-president for the European region and its chief EU representative. The warrant does not state why investigators believe Chinese executives were involved.
[Valerio] Ottati, Huawei’s Belgian-Italian head of public affairs [who is accused of orchestrating the bribery operation], allegedly told a Polish Huawei employee that Brussels lobbyists “often cross the line and even pay for amendments”, according to a wiretap in his Volkswagen Tiguan, referred to in the arrest warrant.
Former Huawei staff members in Brussels told Follow the Money, Knack and Le Soir that Ottati’s problematic behaviour was widely known within the company, but tolerated by higher-ups. Several employees said they had raised concerns about Ottati, including warnings about possible corruption, but that these were never seriously followed up on. [Source]
The current Huawei corruption scandal evokes the 2022 Qatargate corruption scandal, in which European authorities seized 1.5 million euros in cash and arrested four MEPs on corruption charges related to illicit influence by Qatar, Morocco, and Mauritania. (The full investigation is still ongoing.) Politico noted that one of the offices sealed in the Huawei probe belonged to Adam Mouchtar, co-founder of a group that had as its president Eva Kaili, who was arrested in the Qatargate probe. In reaction to the Huawei probe, Nicholas Aiossa, Director at Transparency International EU, said “These new allegations are as sweeping and serious as Qatargate and make a mockery of democracy at the European Parliament. For too long, MEPs have taken a carefree approach to ethics and continue to exist in a culture of impunity. If MEPs want to protect the integrity of the Parliament, they need to bring about swift, wide-ranging, and substantial ethics reform.”
Against the backdrop of the Huawei scandal is a shifting and at times contradictory E.U. policy landscape vis-a-vis China. Last week, The Financial Times reported that the European Commission had begun an investigation into whether China provided unfair subsidies for a BYD electric car plant in Hungary, underscoring the E.U.’s concern with Chinese economic and security threats. But recent data also shows that 17 E.U. member states have not fully implemented the Commission’s 5G cybersecurity toolbox from 2020 that mandates a ban on Huawei and ZTE from their networks. The nationalist tabloid Global Times pounced on these divergences in three recent editorials, arguing that “Europe should dismantle the barriers of suspicion” when it comes to Chinese telecom suppliers and make “a rational choice to turn further toward China.” However, the Global Times has so far made no mention of the Huawei corruption probe. Acknowledging the growing fractures in the transatlantic relationship, a recent article in The Economist suggested that “Europe will have to zip its lips over China’s abuses” in order to safeguard its broader trade goals.
