China’s ambassador to the United States and a top Chinese diplomat in New York City have been facilitating their nation’s covert recruitment of scientists working in the United States, according to an FBI affidavit filed in federal court last year.
The document, which was unsealed by a judge in April, provides an extraordinary window into China’s pursuit of U.S. trade secrets, shedding new light on its government-directed efforts to obtain “the fruits of cutting-edge American scientific research...which efforts involve intellectual property thefts on a massive scale.”
An FBI special agent specializing in counterintelligence who signed the affidavit said the bureau received information that a Connecticut scientist was “knowingly and willfully working in the United States on behalf of government-controlled and government-directed entities for the purpose of recruiting high-level molecular geneticists and stem cell researchers to work at state-controlled universities and laboratories in [China], and for the purpose of acquiring and transferring to those state-controlled universities and laboratories, cutting-edge molecular genetics and stem-cell research and technology developed at leading academic and private sector research platforms in the United States.”
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The Daily Beast is aware of the scientist’s identity and his affiliations, but is withholding these details pending any potential further developments in the case. The Justice Department has, for now, dropped the investigation without bringing charges. A spokesperson from the U.S. Attorney’s Office in Connecticut declined to comment or provide additional details. The scientist, who is believed to have left the United States, did not respond to emailed requests for comment.
In September 2018, a confidential human source identified by the U.S. government as “CHS-1,” told FBI agents that the scientist, a genetic researcher at a Connecticut university, had been traveling between China and the U.S. to try and recruit others to bring their research overseas. The informant said they believed someone from the Chinese government had tasked the scientist with the assignment, and that the Chinese were interested in the target’s access to "superstar technology.”
A bureau field office had opened an investigation into the scientist, who also held an important position at a top Chinese university, two years earlier. Agents suspected the man was operating as an unregistered agent of the Chinese government, willful violations of which can carry up to five years in prison.
CHS-1 said the Chinese ambassador in Washington, D.C., and a vice-consul from New York City were involved with recruiting scientists working in the United States. The pair would be attending a science “summit” in Boston, along with other Chinese officials who would be traveling to the U.S. specifically to “recruit individuals to [redacted],” according to the affidavit. The Connecticut scientist was one of six speakers scheduled to deliver opening remarks at the gathering.
Overseas scientists sign contracts with the Chinese government, with specific—and significant—goals set out in writing, the FBI asserted.
“This contractual obligation closely resembles or even replicates the work the [redacted] performs or performed for his or her U.S. employer, thus demonstrating the willingness to leverage knowledge and intellectual property obtained from U.S. businesses, corporations, and even U.S. government laboratories,” according to the FBI affidavit. “Due to the similarities between [China’s] work in the United States and the... research they are obligated to perform... many... eventually draw upon their knowledge and experience derived from their former positions in the United States, resulting in unauthorized and often illegal transfers of intellectual property from the United States to [China].”
Beyond the research requirements, the contracts “incur dual and disparate obligations: to pursue traditional academic or research activities, and also to act as representatives of China, advocating, influencing, and recruiting others in support of political goals.” To coordinate it all, the Chinese government has in place a parallel network of overseas “administrative points of contact,” says the affidavit. These individuals are meant to “ensure the prospective recruits meet the government's recruitment requirements and advise the recruits to ensure their application satisfies the current recruitment directives.”
The Chinese embassy and consulate did not respond to multiple requests from The Daily Beast seeking comment. An alternate embassy contact number meant for urgent inquiries went unanswered and was unable to accept messages. The State Department did not respond to a request for comment.
The scientist’s work was part and parcel of Beijing’s “publicly-declared national security objectives of technology transfer and human capital acquisition,” according to the affidavit, which says the scientist also co-founded an advanced stem cell research company that was “substantially financed by [a] Chinese government-controlled pharmaceutical industry conglomerate.”
Chinese IP theft costs America as much as $600 billion a year, say federal prosecutors, constituting “the greatest transfer of wealth in history.”
Nicholas Eftimiades, an expert in Chinese intelligence operations who worked for both the CIA and the Defense Intelligence Agency during his 34-year career, says China has long been open about such aspirations.
“If you go back and look at their national-level documents, this is what they’ve talked about for years,” Eftimiades told The Daily Beast. “The objective is to bring the world’s talent into the development of China.”
Achieving that goal has often meant outright theft of American intellectual property and trade secrets, of which Eftimiades says he has thus far documented some 560-odd cases.
In addition to seeking to obtain proprietary scientific research from abroad, the newly-unsealed court filings say Chinese officials “are always looking” for research related to U.S. military projects, especially those pertaining to sensitive materials. In recent months, U.S. authorities have caught Chinese nationals attempting to procure export-controlled radiation-hardened microchips, which are used in space and missile applications, and military radios that provide U.S. troops with encrypted communications.
“The Chinese have got a long history of espionage which goes back thousands of years,” Joseph Wippl, a former officer with the CIA’s clandestine service, told The Daily Beast. “These guys have been stealing us blind for some time. They’re very good at it, and they have a lot of money.”
According to the FBI, the Connecticut scientist began working in the U.S. in 2004, and left his position in February 2018. However, he continued his affiliation as a paid consultant on a patented technology he was involved in creating.
In January 2019, a second confidential informant emerged. This person, who is identified in court filings as “CHS-2,” had been providing information to the FBI for two and a half years.
CHS-2 told agents that the Connecticut scientist’s travel had been funded by the Chinese government. A posting on the website of a Chinese scientific institute described the Connecticut suspect as “a long-term partner” who has “made outstanding contributions.” It also lauded the scientist for his “willingness to carry out specific and pragmatic cooperation... and to seek and recommend for the different needs of [Chinese] employers.”
In return for delivering foreign technology and talent, Beijing showers “high-caliber applicants—particularly applicants willing to relocate—with significant financial and social incentives,” according to the FBI filing. In addition to a large salary, which can often exceed the collaborator’s actual salary in the U.S., overseas scientists who cooperate with the Chinese government can receive signing bonuses of $150,000, plus hundreds of thousands of dollars in tax-free research support. They get free housing, high-quality schooling for their children, health-care allowances, tax breaks, retirement benefits, and stipends for spouses equal to, or above, a full salary in their own chosen fields. Those who make a “great contribution” are eligible for stock grants and options.
Yet, a U.S. professor or scientist merely being involved with Chinese government entities isn’t necessarily illegal in and of itself. In the Connecticut case, the university for which the scientist worked told the FBI that it does not have a policy requiring researchers and professors to report their involvement with outside organizations, and “does not seek to investigate” potential conflicts of interest that may arise from such relationships. Accordingly, say prosecutors, “it is possible that the scientist never disclosed his ‘prominent role’ as a recruiter and intermediary promoting the interests of the Chinese government.”
At the same time, it is vital that the U.S. continue to welcome foreign talent at American universities. But “science security” has become a legitimate issue. Last year, Jodi Black, an official from the National Institutes of Health (NIH) said foreign governments have launched an ongoing campaign to pilfer U.S. scientific discoveries in ways that “distort our funding model," by diverting grants away from the researchers behind the actual breakthroughs. According to documents Black presented at a meeting of university administrators, the Chinese government specifically instructs U.S.-based scientists not to inform their employers about their cooperation with China.
China is not the only culprit, said Black. The NIH managed to identify “at least 120 scientists at 70 institutions" that had neglected to disclose, among other things, “substantial contributions from other organizations, including foreign governments."
Over the past couple of years, the Chinese government has begun taking “active steps” to protect its overseas programs from U.S. government scrutiny, according to the Connecticut filings. The new measures were put in place following a number of high-profile arrests in the U.S., one of which involved a Chinese national who arrived on a student visa to study electrical engineering. Once in the country, the student—who was allegedly operating at the direction of a senior Chinese intelligence officer—enlisted in the U.S. Army Reserve, with instructions to provide information on Chinese engineers and scientists working for U.S. defense contractors.
Some of the changes made by Beijing include altering the way handlers communicate with overseas assets, referring to “conferences and forums” instead of “job interviews.” Recruiters have also reportedly been told to reduce their use of email, instead being instructed to contact potential recruits by phone or fax. It apparently hasn’t been particularly successful at throwing investigators off the trail; the FBI searched the Connecticut scientist’s email accounts and phone records, which turned up dozens of communications between him and various Chinese government representatives.
“It’s no secret that historically there have been cases in which diplomats from other countries have been investigated and accused, and sometimes charged, with engaging in espionage against the United States,” retired FBI special agent Dennis Franks told The Daily Beast. “There are different levels of diplomatic immunity, but for the most part, embassy workers from other countries are going to have some form of immunity which precludes them from being prosecuted, based on various treaties.”
Beijing is now planning to refocus its efforts on bringing top scientists and researchers from around the world to China, rather than recruiting and keeping them operating abroad, said Nicholas Eftimiades, explaining that the Chinese government will invest nearly $1.5 trillion over the next five years into a number of so-called development zones, where foreign scientists will train Chinese researchers on Chinese soil.
—with additional reporting by Seamus Hughes
