The Pentagon has sent a “letter of concern” to Microsoft documenting a “breach of trust” regarding the company’s use of Chinese engineers to maintain sensitive government computer systems, Defense Secretary Pete Hegseth announced this week.
At the same time, the Department of Defense is launching an investigation into whether any of these employees compromised national security.
“The use of Chinese nationals to maintain Department of Defense cloud environments is over,” Hegseth said in a video statement. “We have sent a formal letter of concern to Microsoft documenting this breach of trust and are requesting a third-party audit of Microsoft’s digital stash program, including the code and the requests from Chinese citizens.”
“Did they put something in the code we didn’t know about? We’ll find out,” Hegseth added.
The actions were taken in response to a recent investigation that exposed Microsoft’s “digital stash” system, in which US personnel with security clearances supervise foreign engineers, including those in China. ProPublica found that escort officers often lacked the skills needed to effectively supervise engineers with far more advanced technical expertise.
The tech giant developed this arrangement to circumvent the Department of Defense’s requirement that individuals handling sensitive data be US citizens or permanent residents.
“The program was designed to comply with procurement regulations, but exposed the department to unacceptable risks,” Hegseth said in a video ad posted on X.
The letter serves as a warning to Microsoft, which said in its financial reports of receiving “significant revenue from government contracts.” This is less serious than a “cura notice,” which could lead to termination of Microsoft contracts if the issues are not resolved.
The department has not made the letter public and has not responded to ProPublica’s request for a copy.
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