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Gallagher Urges U.S. Navy Exchange to Remove CCP-Linked Computers From Stores

October 5, 2023

WASHINGTON, DC – Chairman Mike Gallagher (R-WI) of the House Select Committee on the Chinese Communist Party wrote to the CEO of the U.S. Navy Exchange, requesting the removal of CCP-linked Lenovo products from the discounted marketplace available to servicemembers. Lenovo is a Chinese technology company with extensive ties to the People’s Liberation Army and the CCP's state-directed espionage campaigns. Lenovo’s largest shareholder is the Chinese government.

Currently, the U.S. Navy Exchange offers at least ten CCP-linked Lenovo computer and IT products.

In the letter, Chairman Gallagher writes, "[T]he Exchange should not be selling Lenovo products to U.S. servicemembers, let alone incentivizing such purchases with tax-free, discounted prices. Doing so creates a major cybersecurity threat and undermines the U.S. Department of Defense’s 2023 Cyber Strategy, which commits to “foster[ing] a culture of cybersecurity and cyber awareness."

Chairman Gallagher cited the Pentagon's 2016 warning(link is external) that Lenovo computers could introduce compromised hardware into the Defense Department. In 2018, the FTC also cautioned(link is external) that Lenovo installed software on U.S.-bound computers that created serious security vulnerabilities.

Chairman Gallagher requested that Robert Bianchi, CEO of the Navy Exchange, provide a briefing no later than October 20, 2023 on the Navy Exchange's decision to sell Lenovo computers and IT products.

Click HERE to view a copy of the letter or read below.

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Dear Mr. Bianchi,

We write today to urge you to take immediate action to prevent computer and information technology (IT) products made by companies with significant connections to the government of the People’s Republic of China (PRC) and links to state-directed espionage from being sold to active-duty U.S. servicemembers. It has come to our attention that Navy Exchange offers at least ten Lenovo computer and IT product models on its marketplace. Indeed, not only is Lenovo’s largest shareholder closely connected to the PRC government, but the company also has been linked to PRC state-directed espionage campaigns.

Lenovo is closely affiliated with the People’s Liberation Army (PLA), the Chinese Academy of Sciences (CAS), and the PRC government. Its links to state-run cyberespionage campaigns are well documented, and it is believed to have “been complicit in installing Superfish spyware and potentially a BIOS backdoor on a number of its computer products.”In 2018, the Federal Trade Commission filed a complaint against Lenovo for preinstalling software on U.S.-bound computers which “interfered with how a user’s browser interacted with websites and created serious security vulnerabilities.”In 2016, the Pentagon’s Joint Staff warned that “cyber security officials are concerned that Lenovo computers and handheld devices could introduce compromised hardware into the Defense Department’s [global network of suppliers], posing cyber espionage risks.” In addition, the largest shareholder of Lenovo is Legend Holdings, a Chinese entity whose largest shareholder is the Chinese Academy of Sciences. 

According to the 2023 Annual Threat Assessment of the U.S. Intelligence Community, China “probably represents the broadest, most active, and persistent cyber espionage threat to U.S. Government and private-sector networks.” PRC espionage campaigns are highly sophisticated and could certainly target U.S. servicemembers on their personal computer and IT devices. We are concerned that these actors could gain access to servicemembers’ sensitive personal information and exploit this access to compromise U.S. national security.

The Navy Exchange is a valuable asset for U.S. servicemembers as its marketplace offers competitive prices with no sales taxes. Additionally, a portion of the profits go to the Navy’s Morale, Welfare & Recreation program. That being said, the Exchange should not be selling Lenovo products to U.S. servicemembers, let alone incentivizing such purchases with tax-free, discounted prices. Doing so creates a major cybersecurity threat and undermines the U.S. Department of Defense’s 2023 Cyber Strategy, which commits to “foster[ing] a culture of cybersecurity and cyber awareness[.]”

Therefore, we respectfully request that you provide the Select Committee with a briefing regarding the Navy Exchange’s decision to sell Lenovo computers and IT products on its marketplace as soon as possible but no later than October 20, 2023.

The House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party has broad authority to “investigate and submit policy recommendations on the status of the Chinese Communist Party’s economic, technological, and security progress and its competition with the United States” under H. Res. 11.