Hikvision Fights Ban - Claims 'Red Scare', Hires 14 Term Ex-Congressman, Lobbying Records

By: IPVM Team, Published on Jul 11, 2018

Hikvision is fighting back against the House Bill Ban of their products. Hikvision has hired one of the biggest lobbying firms, led by a 14 term ex-Congressman. Plus, Hikvision has started a media campaign to win sympathy against what it says is a 'red scare'.

Inside this note, we review government records, examine the lobbyist firms strong track record of defending China and how Hikvision aims to bust the ban.

Lobbying Hire

Hikvision has hired Sidley Austin, one of the US' biggest law firms, with $2+ billion revenue, according to a US House lobbying registration disclosure.

Leading Sidley Austin's lobbying for Hikvision is Rick Boucher, a former 14-term Democratic Congressman from Virginia.

Strong China Defender

Boucher has a strong track record of defending China, including Chinese companies ZTE, Huawei and Baidu:

  • According to Roll Call, Boucher represented ZTE in 2012 during contentious Congressional hearings about it being a cybersecurity threat.
  • According to the Washington Examiner, Rick Boucher was "seen making the rounds on Capitol Hill on behalf of Huawei" in 2012, but did not file a lobbying disclosure. He didn't respond to comments; a Sidley spokesman "refused to say" if they still lobbied for Huawei.
  • Politico reported in 2012 that Boucher and Sidey were slammed by Republican Congressman Frank Wolf for lobbying for Huawei.
  • Sidley has represented other prominent Chinese clients before, including Baidu in 2010 when the firm was accused of aiding music/film piracy, per The Hill.
  • Sidley has a notable China presence. It has offices in Beijing and Shanghai [link no longer available]. In 2015, China Daily reported that "Sidley has hired more than 130 lawyers that speak Mandarin or Cantonese in the last five years, and plans to add around 15 Mandarin/Cantonese-speaking lawyers in 2015." In 2017, Sidley said its "combined China team includes over 170 professionals who are experienced in a comprehensive range of transactional and regulatory matters."

Outcome / Actions Not Public

What Sidley has done and been able to accomplish is not known publicly as immediate disclosures are limited to hiring, not specific actions. However, certainly by nature of hiring lobbyists, and one with as much experience and relationships as Boucher, Hikvision will be able to make their case that they are being unfairly treated in the House Bill Ban.

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'Red Scare' Marketing Campaign

One visible product of Hikvision's fight is DC publication The Hill publishing a sympathetic Hikvision article titled "Lawmakers target Chinese security companies over spy fears". Whether this article was facilitated by Sidley or Hikvision's ex-Herbalife PR director, this is clearly a positive move for Hikvision, as it presents the US government as being unfair and overbearing, hurting US small businesses.

The Hill features Hikvision USA CEO Jeffrey He [link no longer available], explaining:

[link no longer available]

But one of the companies named in the proposed ban is pushing back. Hikvision argues that the legislation — written into the House version of the annual defense authorization bill — is a knee-jerk response to an anti-Chinese “Red Scare.”

“To my knowledge, and to my understanding, I’ve got a gut feeling that if we are not a Chinese company, this wouldn’t be an issue at all,” said Jeffrey He, president of Hikvision’s independent U.S. subsidiary, in an interview with The Hill.

Gut feelings aside, the more reasonable explanation is that the China Communist Party's track record of cyberattacks, repression and unfair trade practices are the real reasons.

How much impact a single article makes is debatable, however, it is reasonable to expect Hikvision is working on a lot more with that one being the first of many.

Update: Hikvision Uses In Dealer Marketing Campaign

Hikvision has sent a 'special bulletin' about the Hill article, arguing that it is a 'balanced summary':

Unlike the WSJ reporting, which Hikvision has been highly critical of, The Hill post merits Hikvision's praise.

Using the Hill article to help reassure their dealers is a good move.

Sensible To Fight Back

It is clearly sensible for them to spend this significant amount of money fighting back. The ban, even if it 'only' blocked Hikvision products from being sold to the US Federal government, a distinct minority of Hikvision's revenue, would have severe consequences to their brand and their ability to sell to many other customers, as buyers and specifiers fears about Hikvision increased. To that end, while costly, this is a reasonable move to help bust the ban.

How To Stop All This?

Even if the lobbyists can help stop it this summer, the problem for Hikvision is what happens this fall or next year or the year after? Until and unless Hikvision (and the China Communist Party) can turn the tide and get Americans to trust them, the underlying problem will continue to remain, if not grow.

14 reports cite this report:

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Comments (33)

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Classic D.C. Swamp!

That's what's great about being a politician in this country.  Even after you have left office, you can still be bought and paid for to influence a vote.

Jeffery is Right!!

Public Enemy #1 (AKA Hikvision) sure is spending alot of money and efforts trying to let their cyber warheads remain locked and loaded in the USA. I am appalled by their blatant efforts which basically scream "We want to go to war with the USA!"

Maybe we should get rid of pencils too so we have less misspelled words? Cameras or NVR's do nothing without a outside network, Hikvision does not sell outside network connections to anywhere.

Consider offering advice to others like "use competent, knowledgeable network communication professionals" when connecting to the Internet. Change default passwords on older model equipment.

So is it the Pencils fault? 

 

Blasphemy! Hikvision's backdoor is so wide open that you can drive a Dahua electric freight truck through it! Even when the Hikvision cameras are powered off and unplugged from the network and simply setting in their evil product box, they are still sending US Government Secrets back to the China Homeland. Why would you want to the Chinese spying on you when you are picking boogers in your back yard? I respect my booger picking privacy. 

Not to mention that for every camera you buy from Hikvision, $1 gets donated to the "The Chinese Gov't Fight Against Human Rights" fund. 

The US has never seen a most notorious wanted criminal since Billy The Kid.

Sean I do love how you take the ridiculous extreme to try and make your point.  The sad thing is, that backdoor is still around in thousands of cameras that people haven't upgraded.  That backdoor was so wide open that it looked some some did drive a mack truck through it.  It wasn't a Dahua Electric, that machine got hacked and someone drove it off a cliff.

I personally don't have anything against the Chinese manufacturers, but I do see threats on networks beyond serious international hackers.

While the serious network guys talk about limiting access and such, here's Murphy's Law in full force:

Gong Show

No the fault lies with the people that hide blatant and gaping security vulnerabilities and backdoors.  The fault lies with those same people that try to discredit and smear the people that are bringing these very serious security concerns to the public light.  I understand that nothing is 100% "hack proof" or vulnerability free, but in my opinion, fault lies with the people that know about issues and simply ignore or try to hide them.

Sean needs a boost in his upvotes?!?!? Lol

As a point of irony, the lobbying disclosure required Hikvision to declare their foreign government control:

Indeed, Hikvision literally ran out of space to list the foreign entities that control them, adding a final section:

Yet Hikvision is still evidently confused about why the US government would have concerns.

C’mon guys, you’re upsetting the Nelly’s guy with all this reporting.  His double-OEM business is being negatively affected.  Cut it out— don’t make him troll!

Say what you want about the products he chooses to sell, but Sean is truly a great guy and attacks like this only look poorly on yourself, Mr Undisclosed, who hides behind anonymity. Easy to lob jabs when you have no fear of reprisals. 

Weak. 

Pulling out the "Undisclosed" trope again? 

Weak.

How ironic that my disclosed status allows you the ability to track my history. 

Ok please enough here. People are free to post undisclosed, JD is free to criticize that but I'd like to avoid a back and forth argument. Any other debating on this subthread will be removed.

Update: 

Hikvision has sent a 'special bulletin' about the Hill article, arguing that it is a 'balanced summary':

Unlike the WSJ reporting, which Hikvision has been highly critical of, The Hill post merits Hikvision's praise. 

Using the Hill article to help reassure their dealers is a good move.

Note: we also checked for Dahua lobbying but there is no record showing any.

Also, Hikvision Corporate responded but declined comment on the matter.

I wonder how much money HIK is spending on marketing and PR?  Do they have pockets deep enough to sustain this over years or decades?

Sure looks like it.

Nathaniel,

Good questions. Short answers:

  • A few million dollars this year, just in the US, just for marketing and PR for their cybersecurity and government problems.
  • They have deep pockets, assuming their Chinese financials are accurate (not guaranteed, to say the least), they have $2.5 billion cash in the bank. Plus, the $6 billion in debt from a few years back.

So, theoretically, they could sustain this for hundreds of years.

On a more practical basis, the problem is how unprofitable the US becomes for them. In 'The Hill' article that Hikvision is touting, their dealer admitted that he's lost hundreds of thousands of dollars in orders. It is reasonable to say he is not alone, and all of this is costing Hikvision many millions more in lost sales.

Related: Hikvision Mid To Long Term Outlook For US Business - Do You Think Hikvision Is Going To Be Gone From US Market In 3 To 5 Yrs Or Will They Continue On?

Looks like all new episodes of, “The Price is Right - exCongressman edition”.

Wow a Communist working to lobby for the Communists.....what a shocker

Considering he voted against the ACA and has an A+ rating from the NRA, I don't think any truly progressive or liberal person would claim or endorse him.

Update: Hikvision has spent $140,000 lobbying in the past 2 months:

Update: Hikvision has now spent over a million dollars lobbying the US government against the ban, just from US House disclosures:

In Q1 2019 alone, they spent a quarter million dollars:

That is the equivalent of over 10,000 low-end Hik IP cameras.

If you took 10,000 Hik IP cameras in boxes and laid them end to end, they would stretch over a mile.

It's like Silk Road, if Silk Road was made of insecure low-end IP cameras :)

Update: Hikvision USA spent $500,000 in Q2, double their Q1 spending with Sidley Boucher, Q2 filing:

Interestingly ex-Congressman Rich Boucher is listed as no longer lobbying for Hikvision:

Now Huawei has hired Sidley Austin, the same firm lobbying for Hikvision.

BCW filing to US government for H1 released last week. Key excerpts, spending nearly $200k:

Reaching out to a who's who of international journalists:

For Q3, Hikvision spent another $500,000 in lobbying with Sidley Austin (see disclosure), as shown below:

That makes $1 million over the last 6 months just for this 1 lobbying firm.

Update: another $500,000 for Q4 2019, putting 2019 total just with Sidley Austin at $1.75 million, filing:

With this batch of Traitorous Democrat morons that we have in Congress right now it is anybodies guess on how this will turn out. Literally, nothing would surprise me with this House infestation that we have right now. It is literally impossible to drain this swamp.............damn national security and, full speed ahead.

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