March 29th, 2006
Lenovo-U.S. State Department PC deal under scrutiny by security commission
The BBC reports that the US-China Economic and Security Review Commission (USCC), whose members are Congressional appointees, wants to begin an official probe into Lenovo’s $13 million contract to sell 16,000 ThinkCentre desktop computers to the U.S. State Department. Why? The Chinese could turn them into remote spys, planting bugging devices on the systems.
As you’ll recall, IBM sold its PC business last year to Lenovo, China’s leading PC maker, for $13 billion. The world is flat, the economy is global and Lenovo now has the well regarded ThinkPad brand. The systems for the State Department would be build in North Carolina and Mexico, with parts from many places in the world. Forget about the potential spying threat for a moment–the U.S. could inspect the machines and bill Lenovo for the cost. But why does the U.S. State Department buy Lenovo rather than systems from a U.S. based company, given the differences between PCs and support services from Lenovo, Dell, HP, etc. aren’t significant. Is this part of some fair trade deal? Is the Chinese government buying Dell systems to help boost the U.S. economy? Don’t think so…but here’s a catch. The government deal was made with CDW Government, a major U.S. distributor and integrator of PC systems, who must have a preferred distribution deal with Lenovo. Will Congress force CDW to swap out Lenovo for a U.S. vendor, just as it scuttled the potential purchase of Unocal oil by a Chinese firm last year? As news.com’s "Silicon Money" special report indicates, technology and politics are becoming more tightly bound–with tech lobbyists raking in nearly half a billion in fees over the last six years…
Dan Farber, editor-in-chief of CNET News.com, has more than 20 years of experience as an editor and journalist covering technology. See his full profile and disclosure of his industry affiliations.
