U.S. urges judge to deny Huawei motion in government effort to disqualify lawyer

By Karen Freifeld

(Reuters) - U.S. prosecutors on Monday asked a judge to reject a motion by China's Huawei seeking information on the grounds for a government request to disqualify the company's lead defense lawyer in a criminal case alleging bank fraud and sanctions violations.

Last month, prosecutors argued Huawei lawyer James Cole's prior position as the No. 2 official in the U.S. Department of Justice created conflicts of interest that necessitated his removal.

The prosecutors said Cole, who served as deputy attorney general (DAG) until 2015, represented the government in a related investigation, without disclosing details. Huawei asked the court to review "overbroad" redactions in the U.S. motion seeking his removal.

Huawei wants prosecutors to reveal "the very information it is trying to prevent the new client from learning," the prosecutors said in a letter to Judge Ann Donnelly in U.S. District Court in Brooklyn, New York.

"The conflict presented here is unprecedented," the prosecutors argued. The government was not aware of any other senior DOJ official who had sought to represent a client that had been part of his government work, "let alone when the former representation involved classified information," they said.

A spokesman for Huawei Technologies Co Ltd, the world's largest telecommunications equipment maker, declined to comment, and Cole did not respond to a request for comment. Cole entered a not guilty plea on behalf of Huawei in March.

In a court filing two weeks ago, the Washington lawyer said that he had "no recollection" of what the government referenced as the basis for his disqualification in meetings.

In its letter Monday, prosecutors said what Cole remembers is irrelevant.

The Brooklyn case against Huawei was cited last month in a decision to add the company to a U.S. trade blacklist that makes it extremely difficult for the telecom giant to do business with U.S. companies.

Huawei has been involved in activities contrary to the national security or foreign policy interests of the United States, the order said.

The case and blacklisting have escalated tensions between Beijing and Washington amid a trade battle.

The indictment accuses Huawei and its chief financial officer Meng Wanzhou of conspiring to defraud global banks by misrepresenting Huawei’s relationship with a company that operated in Iran, putting the banks at risk of processing transactions that violated U.S. sanctions laws.

Meng, daughter of Huawei's founder, has said she is innocent and is fighting extradition from Canada to the United States.

(Reporting by Karen Freifeld)