US effort to disqualify Huawei's lead lawyer goes to court

Cole entered a not guilty plea on behalf of Huawei and its U.S. subsidiary in Brooklyn in March.

(Reuters) - A former U.S. Justice Department official who now represents Huawei Technologies is expected in Brooklyn federal court on Wednesday to defend his right to represent the Chinese company against U.S. charges of bank fraud and sanctions violations.

U.S. prosecutors claim lead Huawei lawyer James Cole’s prior work as the No. 2 official in the Justice Department created “irresolvable conflicts of interest” that disqualify him as counsel for Huawei in the case.

As deputy attorney general, prosecutors say Cole supervised and participated in aspects of an investigation related to the Huawei case which has not been made public.

“Cole had access to privileged and confidential information, including classified information, that he can use to the government’s detriment here,” prosecutors said in an August filing in U.S. District Court in Brooklyn.

Cole claims he has no recollection of matters referenced as the basis for him to be disqualified from the case, according to another court filing. He served as deputy attorney general until 2015.

Prosecutors will ask to close the courtroom for portions of oral arguments involving classified information, according to a letter to the judge on Tuesday.

The case against Huawei, the world’s largest telecommunications equipment maker, has been a point of contention between Beijing and Washington as the world’s top two economic powers engage in an escalating trade war.

The company’s chief financial officer, Meng Wanzhou, the daughter of Huawei’s founder, was arrested in Canada in December at the request of the United States for allegedly misleading banks about the company’s business in Iran, putting them at risk of violating U.S. sanctions.

The indictment accuses Meng and Huawei of conspiring to defraud global banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, a company that operated in Iran.

Meng has said she is innocent and is fighting extradition.

Executives from HSBC Holdings Plc (HSBA.L), Standard Chartered Bank (STAN.L), and Citigroup (C.N) are expected to testify at any trial, according to a case record made public last month in Meng’s Canadian extradition proceeding. Documents from BNP Paribas (BNPP.PA) also may be used as evidence.

The four banks helped arrange billions of dollars in loans to Huawei between August 2013 and November 2017, according to prosecutors.

Cole entered a not guilty plea on behalf of Huawei and its U.S. subsidiary in Brooklyn in March.