Capitol Hill Turns to NDAA for ZTE Fix as Trump Officials Brief Lawmakers

HR-5515 retains language that would bar any U.S. government agency from using “risky” technology produced by ZTE or fellow Chinese telecom equipment firm Huawei. It would prohibit federal agencies from contracting or buying Huawei or ZTE products. HR-5515 contains several cyber-related provisions, including urging more collaboration between the departments of Defense and Homeland Security. The bill also includes the text of the Amateur Radio Parity Act (HR-555/S-1534), which passed the House last year but generated opposition on the Senate side (see 1710040063), particularly from Commerce ranking member Bill Nelson, D-Fla. HR-555's text was also included in the House Appropriations Financial Services Subcommittee's FY 2019 budget bill cleared Thursday (see 1805240040).

Senate Armed Services attached S-2098's text to its version of NDAA at the behest of Sens. Gary Peters, D-Mich., and Tim Scott, R-S.C., an aide told us. Armed Services' markup of the NDAA wasn't public and the committee hadn't released the cleared legislation. Senate Banking attached an amendment to S-2098 earlier this week that would bar Trump from changing the Commerce ban on U.S. sales to ZTE sans certification to Congress the company complied with U.S. laws. The bill would expand the purview of the Committee on Foreign Investment in the U.S. to include reviews of nonpassive foreign investment in an American “critical technology company” or “critical infrastructure company.”

Administration officials were expected to return to Capitol Hill Thursday to discuss ZTE with lawmakers, less than a day after Treasury Secretary Steven Mnuchin and Secretary of Commerce Wilbur Ross met with Senate GOP leaders on the administration's plans. Trump has faced criticism over ZTE since he first tweeted about it last week (see 1805140062, 1805150068 and 1805160061). Ross said during a CNBC interview Thursday the administration is pushing for ZTE to agree to allow American employees “of our choosing into the company to constitute a compliance unit” that would report back to the federal government and a new ZTE board.

Senate Majority Whip John Cornyn, R-Texas, and Senate Foreign Relations Committee Chairman Bob Corker, R-Tenn., told reporters after the Wednesday meeting they were less apprehensive over Trump's handling of the telecom gearmaker. "Now I have knowledge” of the situation, Corker said. Sen. Marco Rubio, R-Fla., who has been critical of Trump's actions, told reporters after the meeting he wasn't ruling out continuing to pursue Hill action. “I think they would prefer us not to act on it, but I think Congress is going to do what it needs to do,” he said.

House Judiciary Antitrust Subcommittee ranking member David Cicilline, D-R.I., planned to have sent a letter Thursday to the Office of Government Ethics seeking an investigation into Trump's ZTE actions, claiming they “raise several potential constitutional and ethical violations” because the president began pursuing a possible alternative to the ban days after the Chinese government agreed to loan $500 million to an Indonesian theme park project that's to include several properties owned by the Trump Organization. “The Trump administration has yet to give a satisfactory answer about the reason behind and the appropriateness of making concessions to ZTE, a Chinese company that illegally sold U.S. technology to hostile regimes,” Cicilline said in a draft circulated to House colleagues. “The Trump administration has also completely failed to address the suspicious timing between this policy reversal and the Chinese government’s loan to a Trump-linked project. As you know, the issue of U.S. policy being manipulated by a foreign entity or the personal business interests of a public official is of grave concern to the American people.”