CHINA WATCHPentagon Warns Microsoft: Company’s Use of China-Based Engineers Was a “Breach of Trust”
The Defense Department is opening an investigation to determine if the tech giant’s use of overseas engineers to maintain sensitive U.S. government computer systems compromised national security.
The Pentagon issued a “letter of concern” to Microsoft documenting a “breach of trust” over the company’s use of China-based engineers to maintain sensitive government computer systems, Defense Secretary Pete Hegseth announced this week. At the same time, the Defense Department is opening an investigation into whether any of those employees have compromised national security.
The actions came in response to a recent ProPublica investigation that exposed Microsoft’s “digital escort” system, in which U.S. personnel with security clearances supervise foreign engineers, including those in China. ProPublica found that the escorts often lack the expertise needed to effectively supervise engineers with far more advanced technical skills.
The tech giant developed the arrangement as a work-around to a Defense Department requirement that people handling sensitive data be U.S. citizens or permanent residents.
“The program was designed to comply with contracting rules, but it exposed the department to unacceptable risk,” Hegseth said in a video announcement posted on X. “If you’re thinking America first and common sense, this doesn’t pass either of those tests.”
The letter serves as a warning to Microsoft, which has said in earnings reports that it receives “substantial revenue from government contracts.” It is less serious than a “cure notice,” which could lead to termination of Microsoft contracts if problems are not fixed. The department did not release the letter publicly, and it did not reply to ProPublica’s request for a copy of it.
Experts have said allowing China-based personnel to perform technical support and maintenance on U.S. government computer systems poses major security risks. Laws in China grant the country’s officials broad authority to collect data, and experts say it is difficult for any Chinese citizen or company to meaningfully resist a direct request from security forces or law enforcement.
Hegseth said the newly opened Pentagon investigation into the digital escort program would focus on Microsoft’s China-based employees. The probe will “help us determine the impact of this digital escort workaround,” he said, including whether “they put anything in the code that we didn’t know about.”
Hegseth said in his video announcement that the department is also requiring a new third-party audit of Microsoft’s digital escort program. It is unclear who will conduct that audit.
