The Twitter whistleblower reveals employees are concerned a Chinese agent may be collecting user data

Sept 13 (Reuters) – Disclosures by a former Twitter Inc ( TWTR.N ) executive turned whistleblower show that Twitter was informed of at least one Chinese agent working at the social media company, U.S. Senator Chuck Grassley said in his opening remarks during a Senate hearing Tuesday with testimony from the whistleblower.

Peiter “Mudge” Zatko, a well-known hacker who served as Twitter’s security chief until he was fired last year, said at the hearing that some Twitter employees were concerned that the Chinese government would be able to collect data on the company’s users.

He was referring to a Reuters story on Tuesday that detailed internal clashes between some factions that wanted to maximize ad revenue opportunities from Chinese advertisers and others worried about doing business in China amid rising geopolitical tensions. read more

“This was a big internal conundrum,” Zatko said, adding that the company was reluctant to turn away from China as its fastest-growing overseas market for ad revenue.

“In a nutshell, if we were already in bed, it would be problematic if we lost that revenue stream,” he said.

The whistleblower disclosures had noted that the US Federal Bureau of Investigation had informed Twitter of at least one Chinese agent inside the company, Grassley said in his opening statement.

Zatko said Tuesday that the week before he was fired from Twitter, he learned that an agent from China’s Ministry of State Security, or MSS, an agency comparable to the US Central Intelligence Agency, was on Twitter’s payroll.

It was not immediately clear whether the alleged Chinese agent still worked at the company.

Twitter did not immediately respond to a request for comment on Zatko’s testimony.

In his testimony, Zatko said he recalled a conversation with another Twitter executive about concerns that a foreign agent was inside the company. The manager replied “Well, since we already have one, what does it matter if we have more?”

ACTION AGAINST MUSK

Grassley noted that Twitter CEO Parag Agrawal refused to appear at the hearing, fearing it could jeopardize the company’s lawsuits against Elon Musk, who is also the chief executive of Tesla Inc ( TSLA.O ). Twitter and Musk will go to trial next month over whether to complete the $44 billion takeover deal.

Later on Tuesday, Twitter will also publish the results of a shareholder vote on Musk’s takeover of the company. A majority of the shareholders have already approved the agreement, sources told Reuters. read more

The San Francisco-based company sued Musk for ending the deal, while Tesla’s CEO countered, accusing Twitter of misrepresenting the number of fake and spam accounts on the service.

A Delaware judge ruled last week that Musk can include Zatko’s whistleblower claims in his case against Twitter, but denied his request to delay the trial. read more

The Senate Judiciary Committee is questioning Zatko over his allegations that Twitter misled regulators about compliance with a 2011 settlement with the Federal Trade Commission over the mishandling of user data.

Since then, Twitter has made “little meaningful progress with basic security, integrity and privacy systems,” according to Zatko’s complaint, which was filed with regulators in July.

Twitter has said that Zatko was fired for “ineffective leadership and poor performance” and that his allegations appeared to hurt Twitter.

Zatko’s whistleblower complaint appeared to include over two pages of links to supporting documents, such as emails between Zatko and CEO Agrawal and an assessment of misinformation and disinformation on Twitter. The number of documents was limited compared to those provided by Facebook ( META.O ) whistleblower Frances Haugen, who released thousands of pages of internal material.

Reporting by Sheila Dang in Dallas; Additional reporting by Richard Cowan and David Shepardson in Washington Editing by Kenneth Li, Lisa Shumaker and Matthew Lewis

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