U.S. government purchased Chinese technology despite ban: report

The company was banned from selling to the U.S. government due to espionage fears

United States government agencies reportedly purchased technology from a controversial Chinese company despite a federal ban.

At least three government agencies, including the military, purchased video surveillance equipment from Lorex which is a wholly owned subsidiary of a company that is banned by federal from selling technology in the United States, according to Tech Crunch.


ATHENS, GREECE - NOVEMBER 11: Greek Prime Minister Kyriakos Mitsotakis welcomes Chinese President Xi Jinping at the Maximos Mansion on November 11, 2019 in Athens, Greece. (Photo by Milos Bicanski/Getty Images) Stock market concept: istock (Photo by Milos Bicanski/Getty Images  |    istock / Getty Images)

That company, Dahua Technology, was one of several Chinese companies banned from selling technology to the United States government under a 2019 defense spending law amid fears the Chinese government could use transactions to conduct espionage.

Additionally, Dahua was added to a federal economic trade restriction list in 2019 due to the company being linked to efforts by the Chinese government to suppress the Uighur population in China’s Xinjiang region.

Records obtained by TechCrunch show that federal agencies spent thousands of dollars on Lorex’s video surveillance equipment including the Drug Enforcement Agency which bought nine Lorex hard drives in May through a Washington, D.C. tech supplier.

A DEA spokesperson told TechCrunch that the purchases were made via the General Services Administration but did not confirm whether Lorex products had been pulled from the GSA’s government shopping portal.

"GSA has multiple means to vet vendors and products sold on GSA Advantage in accordance with the Federal Acquisition Regulation (FAR)," GSA said in a statement to Tech Crunch. "Moreover, contractors must comply with the clauses and provisions found in the FAR requiring them to state whether they sell covered technology. Products confirmed to be non-compliant are removed from GSA Advantage."

WASHINGTON, DC - JUNE 09: A view of the State Department seal on the podium before Romanian President Klaus Iohannis and U.S. Secretary of State Rex Tillerson appear for a photo opportunity at the State Department, June 9, 2017 in Washington, DC. Ioh (Photo by Drew Angerer/Getty Images  |  istock / Getty Images)


Records also show that the Department of the Army and the  Defense Finance and Accounting Service of the Department of Defense purchased Lorex equipment. 

In a statement the Army told Tech Crunch the contractors are responsible for ensuring the equipment is from a legitimate company.

"On Aug. 13, 2020, the Department of Defense implemented the prohibitions for Section 889 of the National Defense Authorization Act for Fiscal Year 2019 and Public Law 115-232. Companies that propose on federal contracts are required to assert their compliance with various Federal Acquisition Regulation and Defense supplement provisions and clauses, including those required by P.L. 115-232 in the System for Award Management website. Title 18 of the United States Code, or civil liability under the False Claims Act, is applicable if a company misrepresents itself," said Army spokesperson Lt. Col. Brandon Kelley.

In this photo released by China's Xinhua News Agency, Chinese President Xi Jinping speaks during the annual Central Economic Work Conference in Beijing. The ruling Communist Party has called for faster technology development to increase China's econo (AP)

A Democratic spokesperson for the House Armed Services Committee is calling on the Department of Defense to take "appropriate action."


In a statement, Monica Matoush said the committee "expects the Department of Defense to take appropriate action to investigate these reports and, if substantiated, to take action to mitigate harm and prevent future problems."

The Department of Defense did not provide a comment to Fox Business about a possible investigation into the matter and directed any inquiries to the individual agencies.