Distorting Reality

On April 25, two members of the U.S.-China Commission , a body established by Congress to monitor the economic relationship between the two countries, wrote a letter to Virginia Congressman Frank Wolf to express their concern about the security implications of the State Department's acquisition of $13 million worth of PCs from Lenovo Group Ltd.

Specifically, the commissioners were alarmed that 900 of the 15,000 PCs purchased under the contract were slated to be used in a network that carries classified information.

The problem, the commissioners explained, was that since "Lenovo is owned in part by the government of China," the deal "will potentially give the Chinese access to ... the inner workings of the Department of State on issues ranging from human rights to Taiwan to arms control negotiations to countless other areas."

On May 4, Wolf sent a letter to Secretary of State Condoleezza Rice to convey the concern of the commissioners and to urge the State Department not to use the computers in the classified network, since they were "produced by a Chinese-owned company." On May 18, Wolf announced that his advice had been heeded. The State Department, he proclaimed, had agreed not to use PCs from the "Chinese-owned company" to transmit classified information. In the statement, Wolf also referred to Lenovo as "a China-based company."

Now, let's back up. The letter from the members of the U.S.-China Commission referred to Lenovo as being "owned in part by the government of China." That is correct. Forty-two percent of Lenovo is held by Legend Holdings Ltd., which in turn is owned by the Chinese Academy of Sciences (65%) and the Employees' Shareholding Society of Legend Holdings Ltd. (35%). And the other 58% of Lenovo? Well, 34.7% is owned by public shareholders. (Lenovo is traded on the Stock Exchange of Hong Kong.) IBM owns 13.2%, and an investment group made up of Texas Pacific Group, General Atlantic LLC and Newbridge Capital LLC owns 10.1%.

Wolf, you see, distorted reality when he took the liberty of referring to Lenovo as a "Chinese-owned company." And claiming that Lenovo is a "China-based company" distorts reality just as shamelessly. Yes, Lenovo is incorporated in Hong Kong and has extensive operations in China (name a successful computer products manufacturer that doesn't). But it isn't based in China. Lenovo recently relocated its headquarters -- not from China, but from Purchase, N.Y., to Raleigh, N.C. That's where Lenovo is run by people like CEO William Amelio, CIO Steven Bandrowczak (formerly the CIO at DHL Americas and a 2004 Computerworld Premier 100 honoree), and senior vice presidents Deepak Advani, Milko Van Duijl, Ravi Marwaha, William Matson, Frances O'Sullivan, James Shaughnessy and Scott Smith.

So, no, Congressman, it's not accurate to say that Lenovo is "Chinese-owned" or that it's "China-based." But there is enough truth in those claims to sow doubt, distrust and fear. That's why you got what you wanted.

Given the company's Chinese roots, does the use of Lenovo PCs in a classified network constitute a security risk? I can't see how they pose any more of a threat than PCs made by a company with a different mix of shareholders. But I respect the viewpoint of those who argue that we should err on the side of caution.

My problem is with the use of misinformation to build the argument. It simply isn't the way our government should operate. If we have to pay $780,000 for another 900 PCs from a different vendor, we deserve to be told why without having reality distorted.

Don Tennant

Don Tennant is editor in chief of Computerworld. Contact him at don_tennant@computerworld.com.

Copyright © 2006 IDG Communications, Inc.

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