Pentagon Purchasing Counterfeit Electronics Parts from China

Senators want China to assist probe of counterfeit weapons parts

By Bill Gertz-The Washington Times1:14 p.m., Tuesday, June 14, 2011

China's government is refusing to assist Senate investigators probing Chinese firms that are selling counterfeit parts that have been found in high-tech U.S. weapons systems, the leaders of the Senate Armed Services Committee said Tuesday.

Committee Chairman Carl Levin, Michigan Democrat, and Sen. John McCain, Arizona Republican, told reporters that a panel investigation revealed that U.S. defense contractors and government agencies traced the sources of most fake defense parts to Shenzhen, in Guangdong province near Hong Kong.

China has rejected requests for committee staff to visit Shenzhen as part of the probe, Mr. Levin said, noting that investigators are meeting with U.S. officials in Hong Kong to seek help.

“The Chinese have said, well, even if this could be arranged, there would have to be a Chinese official present during the interviews,” Mr. Levin said. “That is a non-starter, somebody looking at our staff while they’re interviewing people who are relevant to an investigation.”

Trade in counterfeit parts “takes place openly in that city and in that province,” Mr. Levin said.

Mr. McCain said he hopes the Chinese will assist in the staff investigation.

A report by the Government Accountability Office published in March 2010 stated that the global supplier network used by the Pentagon provides 4 million parts worth $94 billion.

The parts include fasteners used on aircraft, missile guidance electronics, materials used in body armor and engine mounts.

“Counterfeit parts have the potential to cause a serious disruption to DoD supply chains, delay ongoing missions, and even affect the integrity of weapon systems,” the report said.

It noted that the problem is not limited to weapons systems but includes the National Aeronautics and Space Administration and the Energy Department, along with private-sector producers of software, commercial aviation, automotive parts and consumer electronics and “can threaten the safety of consumers.”

Mr. Levin said counterfeit parts that have “infiltrated” the defense supply chain include microprocessors bought by the Air Force for F-15 operational flight-control computers. Counterfeit microcircuits also were found on hardware of the Pentagon’s Missile Defense Agency.

“In January of 2010, the Commerce Department published the results of a survey of almost 400 companies and organizations in the Department of Defense’s supply chain,” Mr. Levin said.

“Those who were surveyed overwhelmingly cited China as the country suspected of being the source of the counterfeit electronic parts.”

Dale Meyerrose, a specialist with Harris Cyber Integrated Solutions, said the senators’ concerns are justified because threats to critical infrastructure from compromised supply chains are serious and endanger national security and public safety.

“Motivations behind these threats range from the criminally opportunistic driven by profit and greed to state-sponsored seeking an asymmetric advantage over our often superior military or industry entities,” he said.

Chinese officials this month criticized pending U.S. legislation that would continue a ban on Chinese military companies from bidding on U.S. weapons programs.

They told the state-run Xinhua News Agency that the measure is inconsistent with international trade rules and “a distorted reaction arising from U.S. wariness and bias about China’s growing national strength.”

“It shows that the United States worries that China is challenging its global hegemonic status,” the June 2 article said.

The House bill changes language from legislation enacted in 2006 blocking Chinese military companies from contracts by altering provisions that would allow the defense secretary to provide a waiver of the ban if a Chinese company’s products were needed to support U.S. national security.