U.S. has security concerns about sale of Waldorf Astoria to Chinese

Concerned about potential security risks, the U.S. government is taking a close look at last week's sale of New York's iconic Waldorf Astoria hotel to a Chinese insurance company.

U.S. officials said Monday they are reviewing the Oct. 6 purchase of the Waldorf by the Beijing-based Anbang Insurance Group, which bought the hotel from Hilton Worldwide for $1.95 billion US. Terms of the sale allow Hilton to run the hotel for the next 100 years and call for "a major renovation" that officials say has raised eyebrows in Washington, where fears of Chinese eavesdropping and cyber espionage run high.

The officials also said the sale could have implications for the government's longstanding relationship with the hotel, which serves as home to the American ambassador to the United Nations and hosts the president and hundreds of U.S. diplomats during the annual U.N. General Assembly.

"We are currently in the process of reviewing the details of the sale and the company's long-term plans for the facility," said Kurtis Cooper, a spokesman for the U.S. Mission to the United Nations. He and other officials said decisions about the future of the U.S. relationship with the Waldorf would be made based on cost, Anbang's long-term plans for the hotel, and the government's needs and security concerns.

Renovation is key issue

The officials said specifics of the renovation plan would be a key issue of the review.

"The State Department takes seriously the security of its personnel, their work spaces and official residences," Cooper said. "We are constantly evaluating our security protocols and standard operating procedures to ensure the safety and security of our information and personnel."

The department routinely warns U.S. diplomats in China about physical and electronic surveillance and tells American citizens in the country to be aware of similar risks, notably in hotels.

"Hotel rooms (including meeting rooms), offices, cars, taxis, telephones, Internet usage and fax machines may be monitored onsite or remotely, and personal possessions in hotel rooms, including computers, may be searched without your consent or knowledge," according to the department's latest travel advice for China. "Business travelers should be particularly mindful that trade secrets, negotiating positions and other business-sensitive information may be taken and shared with local interests."

U.S. ambassador to UN on 42nd floor

For more than 50 years, the State Department has leased a residence for the U.S. ambassador to the U.N. on the 42nd floor of the hotel's Waldorf Towers. And, every September, the department takes over two floors of the Waldorf to serve as headquarters for the horde of U.S. diplomats that decamp from Washington for the U.N. General Assembly. During the session, the president spends several nights at the Waldorf.

U.S. law allows the department to rent the ambassador's residence for a term of 10 years or less. The current lease expires next year with an option to renew it for one or two years.

It was not immediately clear if the review would affect decisions about the possible renewal of the existing lease.

Ending the government's relationship with the Waldorf could be problematic and expensive, according to officials who note that numerous studies conducted during both Republican and Democratic administrations have concluded that it is cost effective and convenient.

Cooper noted that the U.N. ambassador's residence must meet a long list of requirements, including appropriate housing, reception space, security, proximity to the U.S. Mission to the United Nations and the U.N. headquarters.