China’s export of state surveillance technology to Venezuela. The autocratic Maduro-led regime is rolling out a new, smart card ID known as the “Carnet de la Patria,” or “Fatherland Card”. The Radio Frequency Identification (RFID) based cards transmit data about the cardholders to government-controlled computer servers. Venezuela is aggressively linking the card to the provision of subsidized food, health and other social programs most Venezuelans who are forced to rely on them to survive. ZTE, a public company with major stakes held with a Chinese state company, is at the heart of the program. Presently, an economic meltdown in Venezuela is causing hyperinflation, widespread shortages of food and medicines, and a growing exodus of desperate citizens. Maduro has been sanctioned by the United States and is criticized by governments from France to Canada as increasingly autocratic. Reuters has already published a special report on the issue.
The Fatherland Card
As part of a $70 million government effort to bolster “national security,” Venezuela last year hired ZTE to build a Fatherland database and create a mobile payment system for use with the card, according to contracts which were reviewed by Reuters. The database, according to employees of the card system and screenshots of user data reviewed by Reuters, stores such details as birthdays, family information, employment and income, property owned, medical history, state benefits received, presence on social media, membership of a political party and whether a person voted. A team of ZTE employees is now embedded in a special unit within Cantv, the Venezuelan state telecommunications company that manages the database, according to four current and former Cantv employees.
The Fatherland Card is troubling some citizens and human-rights groups who believe it is a tool for President Nicolas Maduro, to monitor the populace and allocate scarce resources to his loyalists. According to some, Venezuelans with the cards now have more rights than those without.
China’s bigoted attempt to export a surveillance state
The Fatherland Card, they argue, illustrates how China, through state-linked companies like ZTE, exports technological know-how that can help likeminded governments track, reward and punish citizens. The technology is based on China’s existing “Social Credit System”. The system, part of which uses “smart citizen cards” developed by ZTE, grades citizens based on behavior including financial solvency and political activity. Good behavior can earn citizens discounts on utilities or loans. Bad marks can get them banned from public transport or their kids blocked from top schools.
Although ZTE is publicly traded, a Chinese state company is its largest shareholder and the government is a key client. ZTE has run afoul of Washington before for dealings with authoritarian governments. The company paid $1 billion, in 2018, to settle with the U.S. Commerce Department, one of various penalties after ZTE shipped telecommunications equipment to Iran and North Korea, violating U.S. sanctions and export laws.
The Commerce action was sparked by a 2012 Reuters report that ZTE sold Iran a surveillance system, which included U.S. components, to spy on telecommunications by its citizens. U.S. lawmakers and other critics of Maduro’s rule are concerned about ZTE’s role in Venezuela. “China is in the business of exporting its authoritarianism,” U.S. Senator Marco Rubio told Reuters in an email.
Enforcing Big Brother
Maduro for the past year has urged citizens to sign up for the new card, calling it essential to “build the new Venezuela”. “With this card, we are going to do everything from now on,” Maduro said on state television last December. As many as 18 million people, over half the population, already have, according to government figures. To encourage its adoption, the government has granted cash prizes to cardholders for performing civic duties, like rallying voters. It has also given one-time pay-outs, such as awarding moms enrolled in the card a ‘Mother’s Day’ bonus of about $2.
The payment, last May, was nearly a monthly minimum wage – enough to buy a carton of eggs, given the current pace of inflation. Maduro is also taking steps to force the card’s adoption. The government now says Venezuelans need it to receive public benefits including medicine, pensions, food baskets and subsidized fuel. In August, retirees protested outside social security offices and complained that the Fatherland rule limits access to hard-won pensions.
Benito Urrea, a 76-year-old diabetic, told Reuters a state doctor recently denied him an insulin prescription and called him “right wing” because he hasn’t enrolled. Like some other Venezuelan citizens, especially those who oppose the Maduro administration, Urrea sees the card with suspicion. “It was an attempt to control me via my needs,” Urrea said in his Caracas apartment.
Using the servers purchased from ZTE, the government is creating a database some citizens fear is identifying Venezuelans who support the government and those who don’t. Some of the information, such as health data, is gathered with card usage. Some are obtained when citizens enroll.
Cardholders and local human rights groups have said that administrators ask questions about income, political activities and social media profiles before issuing the card. Civil servants are facing particular pressure to enroll, according to more than a dozen state workers. When scanning their cards during a presidential election last May, employees at several government offices were told by bosses to message photos of themselves at polls back to managers, they said. A Justice Ministry document even featured a list of state employees who didn’t vote.
With hunger increasing, the government in 2016 launched a program to distribute subsidized food packages. It hired Soltein SA de CV, a company based in Mexico, to design an online platform to track them, according to documents reviewed by Reuters. The platform was the beginning of the database now used for the Fatherland system.
ZTE, now in Venezuela for about a decade, has over 100 employees working in two floors of a Caracas skyscraper. It first worked with Cantv, to enable television programming online. Like many state enterprises in Venezuela, Cantv is starved for investment. ZTE has become a key partner, taking on many projects that once would have fallen to Cantv itself. In 2016, ZTE began centralizing video surveillance for the government around the country, according to current and former employees.
In its final push for the Fatherland cards, the government no longer considered RFID, according to people familiar with the effort. The location tracking technology was too costly. Instead, it asked ZTE for help with QR codes, the black-and-white squares smartphone users can scan to get directed to websites. ZTE developed the codes, at a cost of less than $3 per account.
ZTE and China: Delivering the Venezuelan Big Brother?
Maduro introduced the cards in December 2016. In a televised address, he held one up, thanked China for lending unspecified support and said: “everybody must get one.” Disaster soon struck. In May 2017, hackers broke into the Fatherland database. The hack was carried out by anonymous anti-Maduro activists known as TeamHDP. The group’s leader, Twitter handle @YoSoyJustincito, said the hack was “extremely simple” and motivated by TeamHDP’s mission to expose Maduro secrets. A Cantv manager, who later helped to migrate the database to ZTE servers, confirmed details of the breach. During the hack, TeamHDP took screenshots of user data and deleted the accounts of government officials, including Maduro. The president later appeared on television scanning his card and receiving an error message: “This person doesn’t exist”. Screenshots of the information embedded in various card accounts, shared by TeamHDP with Reuters, included phone numbers, emails, home addresses, participation at Socialist Party events and even whether a person owns a pet. People familiar with the database said the screenshots appear authentic.
Shortly after the hack, Maduro signed a $70 million contract with Cantv and a state bank for “national security” projects. These included the development of a “Centralized Fatherland Database” and a mobile app to process payments, such as the discounted cost of a subsidized food box, associated with the card. “Imperialist and unpatriotic factions have tried to harm the nation’s security,” the contract reads. It says an undisclosed portion of the funding would come from the Venezuela China Joint Fund, a bilateral financing program. A related contract also assigns the database and payment app projects to ZTE. The document doesn’t disclose how much of the $70 million would go to ZTE. ZTE has declined to comment on financial details of its business in Venezuela. Neither the Venezuelan nor the
The Chinese government responded to Reuters queries about the contracts. In July 2017, Soltein transferred ownership of Fatherland data to Cantv, project documents show. A team of a dozen ZTE developers began bolstering the database’s capacity and security, current and former Cantv employees said.
In May, Venezuela held elections that were widely discredited by foreign governments after Maduro banned several opposition parties. Ahead of the vote, ruling party officials urged voters to be “grateful” for government largesse dispensed via the Fatherland cards. They set up “redpoint” kiosks near voting booths, where voters could scan their cards and register, Maduro himself promised, for a “Fatherland Prize.” Those who scanned their cards later received a text message thanking them for supporting Maduro, according to several cardholders. The prizes for voting, however, were never issued, cardholders and people familiar with the system said. Cantv employees claim that the database registers if, but not how, a person voted.
Still, some voters were led to believe the government would know. The belief is having a chilling effect. One organizer of a food handout committee in the west-central city of Barinas said government managers had instructed her and colleagues to tell recipients their votes could be tracked. “We’ll find out if you voted for or against,” she said she told them. Even State workers say they are a target.
With personal data now openly available to the government, Venezuelan citizens fear they can lose more than just their jobs. The opposition instituted a commission last year that investigated how the Fatherland card was being linked to the subsidized food program. The Maduro Government, the commission said in a report, is depriving some citizens of the food boxes because they don’t possess the card. “The government knows exactly who is most vulnerable to pressure,” she said.
The footprints of ZTE and the link to Chinese surveillance on both adversaries and allies are surfacing at an alarming rate. From embedding eavesdropping malware into consumer electronics to remotely controlling exported arms and seducing vulnerable economies into a debt trap, China is slowly and steadily being caught red-handed flouting international norms and acting like a rogue nation. China is openly advocating open market norms in global forums but has repeatedly sealed itself from outside scrutiny. This has enabled it to carry out its nefarious agendas to the detriment of the world community. Maybe it is time that affected nations like Pakistan, Sri Lanka, Myanmar and Bangladesh sit up and take notice before they too are irreparably affected.
15 Nov 18/Thursday Written by Fahd Khan