Cisco Systems had a public relations problem: Having invested $16 billion in the Chinese market, the technology giant was suddenly facing congressional scrutiny over its alleged complicity in building the so-called Great Firewall that helps China's authoritarian regime censor information and surveil its citizens.
The San Jose, California, company endured a high-profile Senate hearing about its Chinese operations in 2008 and reaffirmed its “continued commitment to China.” But the issue wouldn’t die. A group of investors stormed the company’s annual meeting in November 2009, pressing a shareholder resolution that would force the company to prevent the Chinese government from using Cisco technology to engage in what critics said was widespread human-rights abuse.
That’s when then-Secretary of State Hillary Clinton tossed the company a lifeline. Weeks after Cisco executives opposed the initiative and it was then voted down by shareholders, Cisco was honored as a finalist for the State Department’s award for “outstanding corporate citizenship, innovation and democratic principles.” The next year, the company won the award. While the honors were for the company’s work in the Middle East, they gave Cisco a well-timed opportunity to change the subject and present itself as a champion of human rights.
What Clinton did not say at the State Department award ceremonies was that Cisco had been pumping money into her family’s foundation. Though the foundation will not release an exact timeline of the contributions, records reviewed by International Business Times show that Cisco had by December 2008 donated from $500,000 to $1 million to the foundation. The company had hired lobbying firms run by former Clinton aides. After the money flowed into the foundation, Clinton’s State Department not only lauded Cisco’s human rights record, it also delivered millions of dollars worth of new government contracts to the company.
The most recent foundation records available show that Cisco has donated between $1 million and $5 million to the Clinton Foundation, all told. Cisco employees have been generous financial supporters of Hillary Clinton’s political career, delivering more than $140,000 to her campaigns, data compiled by the Sunlight Foundation show. The foundation, the State Department, and Hillary Clinton’s presidential campaign all declined IBTimes’ requests for comment.
A spokesman for Cisco said the company does “not participate in business activities that would aid repression.” The company declined to answer when asked specifically about human rights in China and declined to comment on the nature of the contracting work it has with the U.S. government.
Internet freedom advocates say Clinton’s moves helped Cisco whitewash its image and also raise questions about the sincerity of her often-stated commitment to human rights.
“Crony capitalism has defined Clinton's career, from her tenure on the board of Walmart, to the Wall Street execs whom she surrounded herself with at the State Department, to her allegiance to Cisco, even as it violated principles on which she staked her tenure,” said David Segal, executive director of the Internet freedom advocacy group Demand Progress.
Clinton begins her campaign for the presidency amid intensifying questions about whether donations to her foundation unduly influenced her actions as a top U.S. government official. The Wall Street Journal reported that the board of the Bill, Hillary and Chelsea Clinton Foundation will continue to accept donations from Australia, Britain, Canada, Germany, the Netherlands and Norway; other countries can still participate in the Clinton Global Initiative, a subsidiary of the foundation.
An IBTimes report last week demonstrated how Clinton changed her position on a Colombia trade deal and backed military aid to that country after the Colombian subsidiary of a Canadian oil company and its founder delivered large donations to the foundation. Clinton’s family foundation also has received donations from countries like Morocco, Saudi Arabia and the United Arab Emirates, all of which had sensitive relationships with Clinton’s State Department.
The State Department’s relationship with China was also delicate. Over the years, Clinton developed a reputation as someone willing to be tough on Beijing. In 1995, as first lady, she gave a speech in the Chinese capital firmly declaring that “women’s rights are human rights, once and for all.” When Chinese authorities moved to assert control ahead of the Beijing Olympics in 2008, she spoke out for the cause of Tibet and for jailed dissidents.
In her 2014 memoir "Hard Choices," Clinton reiterated her support for human-rights advocates in China. She specifically criticized the Great Firewall, writing that after she made comments about the right to dissent in China in 2011, “censors went right to work erasing mentions of my message from the Internet.”
But the issue of Chinese repression -- and Cisco’s role -- was already known by then. In 2009, weeks after Clinton’s State Department had named Cisco a finalist for the secretary of state’s Awards for Corporate Excellence (ACE), a report from the Electronic Freedom Foundation noted “Cisco's deep involvement” in building the Chinese government’s censorship system. The report pointed out that “Cisco engineers gave a presentation acknowledging the repressive uses for their technology.”
In 2010, the Clinton Foundation gave Cisco CEO John Chambers a high-profile speaking role at its “Turning Ideas Into Action” annual meeting. Cisco also won an ACE that year -- just before the Human Rights Law Foundation filed a lawsuit against Cisco outlining what the foundation's executive director, Terri Marsh, said was the “key role Cisco played in the design, construction, and maintenance of China’s Internet surveillance system.”
In an interview with IBTimes, Marsh said that “Cisco’s conduct has enabled an unprecedented and widespread crackdown on religious minorities, Tibetans, and democracy activists in China.” Cisco’s work in China, she said, “runs contrary to Secretary Clinton's stated commitment to ‘a single Internet where all of humanity has equal access to knowledge and ideas.’” She added: “We are disappointed that the State Department has chosen to reward rather than condemn such a company, and believe that the United States should instead be sending a clear message to American technology corporations that complicity in global human rights abuses is not acceptable.”
Cisco has argued that it cannot control how its products are used, and can’t be held responsible for a government that might employ its technology to undermine democratic rights.
“We have never customized our equipment to help the Chinese government -- or any government -- censor content, track Internet use by individuals or intercept Internet communications,” the company said in a statement in 2011. “Cisco does not supply equipment to China that is customized in any way to facilitate blocking of access or surveillance of users. Equipment supplied to China is the same equipment we provide worldwide.”
Wired magazine reported in 2008 that internal company documents show that Cisco saw the Great Firewall as an opportunity to expand its business operations in China.
Daniel Wade, an attorney who represented Chinese dissidents in a lawsuit against Cisco, told IBTimes that “Cisco knew full well that its products were going to be used to suppress and facilitate the torture of democracy activists.”
The Electronic Frontier Foundation, which today works with Cisco on an Internet encryption project, said Cisco technology enabled violent repression by the Chinese government.
“We have ample evidence to indicate that the technology Cisco created was instrumental in the tracking down of religious minorities, detaining them, and murdering them,” said Rainey Reitman, the EFF’s activism director. “Unfortunately, there hasn’t been a full public accounting.”
Clinton’s State Department did more than simply praise Cisco’s human rights record. Starting in 2010, Cisco began receiving lucrative contracting work from the department, totaling more than $3.5 million during Clinton’s time as secretary of state (January 2009 to February 2013). There’s no data available indicating that Cisco had received contracting work from the State Department prior to Clinton’s tenure.
The human rights award and government contracts coincided with Cisco hiring lobbying firms Franklin Square Group, Capitol Solutions, and Capitol Counsel, which are all run by former Clinton aides. The firms received almost $2 million in lobbying business from Cisco during Clinton’s tenure as secretary of state, federal records show.
None of the firms had received lobbying business from Cisco prior to Clinton’s appointment to head the department.
Bill Clinton’s financial relationships in China add another layer of complexity. The Clinton Foundation has received more than $500,000 from the Alibaba Group, which has assisted Chinese government efforts to crack down on dissent in Tibet. And in 2005, Bill Clinton appeared in China at an event jointly sponsored by Yahoo and Alibaba after Yahoo had handed over evidence to the Chinese government for its legal case against a critical journalist.
Meanwhile, Hillary Clinton’s relationship with Cisco has continued. In August, she appeared at the company for a surprise visit. Chambers interviewed her onstage, telling employees: “I’m a strong Republican, but I think President Clinton got it right with business and knocked the ball out of the park."
UPDATE: This story was updated to reflect that Cisco executives did not themselves kill the 2009 shareholder initiative -- they publicly opposed it, and shareholders then voted it down. Additionally, this story was updated to reflect that Cisco's donation to the Clinton Foundation was not for climate change work - it was a membership donation to the Clinton Global Initiative.