WASHINGTON, D.C. — House Homeland Security Chairman Mark E. Green (R-TN), Subcommittee on Transportation and Maritime Security Chairman Carlos Gimenez (R-FL), and House Select Committee on the Chinese Communist Party Chairman Mike Gallagher (R-WI) have sent a letter to Shanghai Zhenhua Heavy Industries (ZPMC), a company closely tied to the Chinese Communist Party, demanding answers regarding numerous findings of the Committees’ joint investigation into the operation of ZPMC-manufactured cranes at U.S. ports. Read the full letter here.

Read more in the Wall Street Journal.

While the investigation is still ongoing, the Committees have identified serious concerns regarding ZPMC’s relationship with the Chinese Communist Party (CCP), especially in the wake of reports that CCP-affiliated hackers maintained access to U.S. critical infrastructure for years, including the maritime sector.

The letter details concerns related to cellular modems discovered on ship-to-shore (STS) crane components at a U.S. seaport and a cellular modem discovered in another U.S. seaport’s server room that houses STS cranes’ firewall and networking equipment. As part of another cybersecurity investigation, some of these modems were found to have active connections to the operational components of the STS cranes.

The Committees remain concerned that every U.S. seaport with ZPMC cranes could already be, or is at risk of being, compromised by the CCP. These suspicious cellular modems are another piece of the puzzle, as they were not part of any existing contract between the seaports and ZPMC, and the Committees have been unable to verify a timeline for installation or their intended purpose. Certain U.S. seaport personnel have communicated to the Committees that they believed the cellular modems were potentially for maintenance, monitoring, or the collection of usage data for the STS cranes.

The Chairmen were joined on the letter by Subcommittee on Counterterrorism, Law Enforcement, and Intelligence August Pfluger (R-TX) and Select Committee on the Chinese Communist Party members, Rep. Dusty Johnson (R-SD) and Rep. Michelle Steele (R-CA).

The letter requests information concerning any CCP requests of ZPMC regarding U.S.-based maritime equipment, the personnel involved with and details of ZPMC’s engagements with multiple PRC entities, details on ZPMC personnel who are members of the CCP and the frequency and content of their communication with the PRC government, and details of any engagement ZPMC has had with entities who are involved in, or at risk to become involved in, activities contrary to the foreign policy and national security interests of the United States.

In the letter, the members state, “Over the course of our eight-month joint investigation, the Committees engaged with several U.S. maritime ports and U.S. federal law enforcement agencies, requesting documents and information through public and non-public oversight inquiries. Analysis of this material has led us to conclude that ZPMC installed certain components onto U.S.-bound STS cranes and onshore maritime infrastructure that are outside of any existing contract between ZPMC and U.S. maritime ports. These components do not appear in any way to contribute to the operation of the STS cranes or onshore infrastructure, raising significant questions as to their intended applications. However, this is not the first reported instance of ZPMC’s apparent misconduct. In 2021, the Federal Bureau of Investigation (FBI) discovered intelligence gathering equipment on board a vessel delivering ZPMC cranes to the Port of Baltimore.”

The members continue, “The Committees have serious concerns that this proximity to the PLAN’s main shipyard provides malicious CCP entities, including its intelligence agencies and security services, with ample opportunity to modify U.S.-bound maritime equipment, exploit it to malfunction, or otherwise facilitate cyber espionage thereby compromising U.S. maritime critical infrastructure.”

The members conclude, “The Committees are also concerned that ZPMC has benefited from extensive PRC government subsidies which have facilitated its dominant market position. ZPMC’s 2022 Annual Report reveals that the company is the recipient of large PRC government subsidies, amounting to tens of millions of dollars. As a result of the PRC’s economic support, ZPMC can submit unusually low bids for U.S. port contracts, furthering the CCP’s economic influence within the U.S. maritime sector. Our nation’s dependence on PRC state-owned enterprises, including ZPMC’s port equipment, for international trade, and the lack of sufficient domestic industrial alternatives, introduces significant risk of future exploitation by the CCP, putting the American people in potential danger in future national emergencies.”

Background:

Last week, the House Homeland Security Subcommittee on Transportation and Maritime Security held a hearing to examine security vulnerabilities at U.S. maritime ports, as well as the actions Congress can take to ensure and promote maritime and economic security amid increased cybersecurity threats from China. Testimony was provided by Rear Admiral Wayne R. Arguin, assistant commandant for prevention policy in the United States Coast Guard; Rear Admiral John Vann from the Coast Guard Cyber Command; Rear Admiral Derek Trinque, director of strategic plans, policy, and logistics at United States Transportation Command; and Christa Brzozowski, acting assistant secretary for trade and economic security with the Department of Homeland Security (DHS).

In February 2024, Chairman Green and Subcommittee on Counterterrorism, Law Enforcement, and Intelligence Chairman Pfluger joined Chairmen Gimenez and Gallagher in issuing a joint statement concerning the Biden administration’s announcement of new investments in the domestic manufacturing of port cranes and other maritime security efforts in order to combat threats from the Chinese Communist Party (CCP). This announcement follows a lengthy joint investigation by the Committees and numerous calls to action to counter the cybersecurity risks, foreign intelligence threats, and supply chain vulnerabilities plaguing the U.S. maritime sector.

In April of 2023, Chairman Green, Chairman Gimenez, Subcommittee on Cybersecurity and Infrastructure Protection Chairman Andrew Garbarino, and Subcommittee on Oversight, Investigations, and Accountability Chairman Dan Bishop (R-NC) sent a letter to DHS Secretary Alejandro Mayorkas, demanding answers on ship-to-shore cranes used at U.S. ports that are manufactured by the Chinese company Shanghai Zhenhua Heavy Industries Co. (ZPMC), a subsidiary of China Communications Construction Co.

In July 2023, the Committees sent a letter to the Swiss company ABB, requesting “documents and information explaining its commercial relationship” with ZPMC, “to determine whether ABB’s commercial ties to PRC state-owned enterprises and its ongoing work for U.S. government agencies pose a potential conflict of interest.” Following a closer investigation into its practices, ABB has failed to cooperate in good faith with the Committees and has lacked the appropriate urgency in responding to calls for increased security. In a January 16, 2024 letter transmitted to ABB, the Committees requested that the company’s U.S. Country Holding Officer testify in an upcoming public hearing.

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