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US Colleges Cutting Ties with Huawei as Company Faces Allegations of Bank Fraud, Trade Theft

The schools are among at least nine that have received funding from Huawei over the past six years, amounting a combined $10.5 million, according to data provided by the U.S. Education Department

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FILE - A staff member stands in front of a Huawei shop in Beijing, China, March 7, 2019. VOA

Some of the nation’s top research universities are cutting ties with Chinese tech giant Huawei as the company faces allegations of bank fraud and trade theft.

Colleges including the Massachusetts Institute of Technology, Princeton University and the University of California, Berkeley, have said they will accept no new funding from the company, citing the recent federal charges against Huawei along with broader cybersecurity concerns previously raised by the U.S. government.

The schools are among at least nine that have received funding from Huawei over the past six years, amounting a combined $10.5 million, according to data provided by the U.S. Education Department. The data, which is reported by schools, does not include gifts of less than $250,000. It’s not uncommon for big companies to provide research dollars to schools in the U.S. and elsewhere.

At MIT, which received a $500,000 gift in 2017, officials announced in a memo Wednesday they will not approve any new deals with the company and won’t renew existing ones. The memo ties the decision to recent Justice Department charges against Huawei, adding that the shift will be revisited “as circumstances dictate.”Company officials did not immediately respond to a request for comment.

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FILE – A woman stands at a Huawei booth featuring 5G technology at the PT Expo in Beijing, China, Sept. 28, 2018. VOA

Federal prosecutors in January unsealed two cases against Huawei. One, filed in New York, accuses the company of bank fraud and says it plotted to violate U.S. trade sanctions against Iran. The other, filed in Washington state, accuses Huawei of stealing technology from T-Mobile’s headquarters in Bellevue, Washington. The company pleaded not guilty in both cases.

The U.S. government previously barred federal agencies from buying certain equipment from Huawei and labeled the company a cybersecurity risk.

Just days after the federal cases were unsealed, officials at the University of California, Berkeley, issued a ban on new research funding from Huawei until the charges are resolved.

“UC Berkeley holds its research partners to the highest possible standards of corporate conduct, and the severity of these accusations raises questions and concerns that only our judicial system can address,” Howard Katz, the school’s vice chancellor for research, said in the Jan. 30 directive.

Still, the school is honoring its existing multi-year deals with the company, which amount to $7.8 million. Officials say most of the funding supports research centers rather than specific projects, and Katz’s memo emphasized that “none of these projects involve sensitive technological secrets or knowledge.”

Berkeley officials investigated whether it had any technology provided by Huawei that could pose a cybersecurity threat. Officials removed one off-campus video conferencing set-up donated by the company, but said it had never been used for research. The school’s projects funded by Huawei cover a wide range of science fields, from artificial intelligence and deep learning to wireless technology and cybersecurity.

 

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The U.S. government previously barred federal agencies from buying certain equipment from Huawei and labeled the company a cybersecurity risk. VOA

At Princeton, officials told Huawei in January they would not accept the final $150,000 installment of a gift that supported computer science research. Ben Chang, a Princeton spokesman, said the school had decided last July not to accept new gifts from the company, and has no current projects backed by it.

Cornell University has received more than $5.3 million from Huawei in recent years, by far more than any other U.S. college, according to the Education Department data. Officials there also said they will heed the government’s warnings and bar new funding.

ALSO READ: US is Now Tied with China in 5G Race’: Report

Existing projects were carefully reviewed, according to a statement from the school, “to confirm that appropriate safeguards were in place to address data and information security, to protect the independence of our research and to comply with all federal and state laws and regulations.”

Ohio State University is also opting not to pursue any other funding from Huawei. The school has received $1.2 million for engineering research, according to federal data. School spokesman Ben John said officials are “in the process of closing out the final contract, and are not accepting or pursuing any other gifts or contracts from Huawei.” (VOA)

Next Story

U.S. Media Industry Going Through A Bad Phase

On the surface, it may look as though the average U.S. media consumer is awash in choices: websites, podcasts, cable and broadcast TV, satellite, but this is not the reality

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Some front pages and section fronts of the Orange County Register are seen in the newsroom in Santa Ana, Calif., Dec. 27, 2012. VOA

On the surface, it may look as though the average U.S. media consumer is awash in choices: websites, podcasts, cable and broadcast TV, satellite and over-the-air radio, and yes, even printed newspapers. But the reality is different.

There is an oft-quoted line from Thomas Jefferson about the importance of a free press to the stability of the newly formed United States: “Were it left to me to decide whether we should have a government without newspapers or newspapers without a government,” he wrote to a colleague, “I should not hesitate a moment to prefer the latter.”

Almost always, though, the words Jefferson wrote next are forgotten. He added, “But I should mean that every man should receive those papers & be capable of reading them.”

His insight was that a press free from government interference is a necessary condition for a healthy democracy, but not a sufficient one. A free press isn’t very useful if nobody has access to relevant reporting on the issues that affect them.

If Jefferson were able to look at the media landscape in his country today, particularly at the local level, he would almost certainly be worried.

Consolidation

News sources, particularly local ones, are increasingly controlled by a limited number of companies that have bought up smaller news organizations and consolidated them.

This is perhaps most visible in the world of newspapers. Twenty percent of the newspapers that were active 15 years ago have been shut down, according to the University of North Carolina, leaving hundreds of locales without a local paper.

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A specialist works at the post that handles Gannett on the floor of the New York Stock Exchange, Aug. 5, 2014. VOA

Employment in newspaper newsrooms has fallen by 47% since 2004, according to the Pew Research Center. Meanwhile, companies like GateHouse Media and Gannett  control hundreds of publications using centralized news gathering that decreases the focus on their communities.

In August, the two companies announced a plan to merge, a deal that would create a company controlling more than 250 daily newspapers, as well as hundreds more weeklies and community papers. The merged companies would be several times larger than the next biggest newspaper company, Digital First Media, which in 2018 owned 51 daily papers and 158 other publications.

Digital First, which is owned by the hedge fund Alden Global Capital, has been at the forefront of another troubling trend: buying up newspapers, laying off newsroom staff, and liquidating the papers’ real estate assets.

Digital First, which also goes by MediaNews Group, or MNG, did not respond to a request for comment from VOA. However, in response to a Washington Post story earlier this year, the company said “MNG is committed to the newspaper business and a long-term investor in the space. MNG’s focus is on getting publications to a place where they can operate profitably and sustainably and continue to serve their communities.”

Job cuts, quick profits

“They’re owned, essentially, by private equity companies, or even hedge funds at times, and they don’t particularly care about the quality of the journalism,” said Margaret Sullivan, media columnist for The Washington Post and former public editor of The New York Times.

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Two New York Daily News employees leave the newspaper’s office after they were laid off, in New York, July 23, 2018. VOA

“What they’re there to do is to strip mine these properties and get as much profit from them as they can in the short term. And that is very bad for journalism. It’s very bad for journalists, because it often means round after round of job reductions, cutting costs in really draconian ways that hurt the news gathering process.”

Newspapers are not typically seen as a major profit-making venture. While they generate significant cash flow through advertising sales, that is offset by high production costs of personnel and the logistics of printing and delivery. Many are run by family foundations and other organizations that place some value on their public mission.

The strategy of many investment firms buying up newspaper chains has been to increase profits by slashing personnel costs.

In the broadcast world, the story is similar. Large companies have been buying up local stations and cutting costs by centralizing the production of much of the content they air. Most notorious among them is Sinclair Broadcast Group, which owns 193 stations across the country, reaching up to 40% of the U.S. population.

Sinclair is known for enforcing a sharply conservative political slant on its broadcasts, providing “must-run” content that appears on every station the company owns. It regularly requires its stations to air commentary by Boris Epshteyn, a friend of President Donald Trump’s family and a former political consultant to the president.

Last year, a video went viral in which dozens of Sinclair anchors could be seen repeating, verbatim, a script that echoed Trump’s complaints about “fake news.”

Easing antitrust

Rules that formerly limited the ability of individual companies to own a dominant share of the media outlets in a specific market have been slowly eased over the years. Then, in 2017, the Federal Communications Commission gutted many of the remaining restrictions, opening the door to single companies dominating individual markets in both broadcast and print.

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Hundreds of old newspaper vending machines are shown in a vacant lot near the former offices of the Alaska Dispatch News in Anchorage, Alaska, Sept. 11, 2017. VOA

The resulting consolidation has been “disastrous for local communities,” said Craig Aaron, president and CEO of Free Press, an organization that advocates for the decentralization of media. “We’ve gone from a more diverse localized media system to one increasingly controlled by a small handful of companies.”

 

“You used to get in your car in New York and drive to, I don’t know, Phoenix,” said Aaron. “Everywhere along the way, you would get incredibly different local voices, local flavors, local music. Now, you’re much more likely to get the same hit songs and Rush Limbaugh. So, we’ve lost some of that, you know, which I think has huge cultural value.”

The impact goes beyond culture, though, as Aaron and others have pointed out. It also has a direct impact on how Americans govern themselves.

“When sources of local and regional news dry up or go away,” Sullivan said, “there’s research that shows that the way people engage politically changes. They are going to be less likely to vote, they become more polarized, because for many years, the local newspaper might have been a way that people in that community were sharing a set of facts. Now, that’s gone or diminished.”

Last year, the Shorenstein Center on Media, Politics, and Public Policy at Harvard Universityassembled a list of academic studies that tied the loss of local news sources to a decline in both the quantity and quality of citizens’ civic engagement.

Social media news

To fill the gap, Sullivan said, people turn to less objective sources of news, like Facebook, or politically partisan cable television programming.

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An iPhone displays the app for Facebook in New Orleans, Aug. 11, 2019. VOA

“It is really a very damaging thing for the way we talk to each other, the way we feel as a community and the way we deal with politics,” Sullivan said.

Identifying the disease and cataloging the symptoms is one thing. But finding a cure that will return the U.S. to a more Jeffersonian media model won’t be easy.

Sullivan argued that the growth of nonprofit news organizations is a hopeful sign that an alternative to corporatized media may be available. Groups such as Report for America provide funding so that young journalists can work in local media outlets, providing them important training while supplementing understaffed news outlets.

Some nonprofit publications like The Texas Tribune and Voice of San Diego have been able to make important contributions to their communities.

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But nonprofits can’t bridge the gap entirely, and Sullivan and others worry that the advertising-dependent business model of traditional journalism — particularly newspapers — has been so thoroughly broken by the rise of digital media that trying to rebuild it on the same design will be impossible.

That’s why Aaron and his organization want the federal government to get involved. Free Press argues for a return to tighter federal restrictions on media consolidation, including the breakup of existing conglomerates. They also call for federal investment through grants or tax incentives to support local news.

“If local journalism is important to making sure democracy survives, then we need the policies to actually match that need,” he said. “And right now, we don’t have them.” (VOA)