U.S.'s 5,025,817 Chinese Spies

FBI points to China as biggest U.S. law-enforcement threat

Top U.S. officials to spotlight Chinese spy operations, pursuit of American secrets

By Mark Hosenball

U.S. Attorney General William Barr arrives for U.S. President Donald Trump's State of the Union address to a joint session of the U.S. Congress in the House Chamber of the U.S. Capitol in Washington, U.S. February 4, 2020. 

WASHINGTON -- An aggressive campaign by American authorities to root out Chinese espionage operations in the United States has snared a growing group of Chinese government officials, business people, and academics pursuing American secrets.
In 2019 alone, public records show U.S. authorities arrested and expelled two Chinese diplomats who drove onto a military base in Virginia. 

They also caught and jailed former CIA and Defense Intelligence Agency officials on espionage charges linked to China.
On Thursday, U.S. Attorney General William Barr, FBI director Christopher Wray and U.S. counterintelligence chief William Evanina will address a Washington conference on U.S. efforts to counter Chinese economic malfeasance involving espionage and the theft of U.S. technological and scientific secrets.
China’s efforts to steal unclassified American technology, ranging from military secrets to medical research, have long been extensive and aggressive, but U.S. officials only launched a broad effort to stop Chinese espionage in the United States in 2018.
“The theft of American trade secrets by China costs our nation anywhere from $300 to $600 billion in a year,” Evanina, director of the National Counterintelligence and Security Center, said in advance of Thursday’s conference.

Of 137 publicly reported instances of Chinese-linked espionage against the United States since 2000, 73% took place in the last decade, according to the Washington-based Center for Strategic and International Studies (CSIS).
The think-tank’s data, which excludes cases of intellectual property litigation and attempts to smuggle munitions or controlled technologies, shows that military and commercial technologies are the most common targets for theft.
In the area of medical research, of 180 investigations into misuse of National Institutes of Health funds, diversion of research intellectual property and inappropriate sharing of confidential information, more than 90% of the cases have links to China, according to an NIH spokeswoman.
One main reason Chinese espionage, including extensive hacking in cyberspace, has expanded is that “China depends on Western technology and as licit avenues are closed, they turn to espionage to get access,” said James Lewis, a CSIS expert.

The Harvard Connection
In late January alone, federal prosecutors in Boston announced three new criminal cases involving industrial spying or stealing, including charges against a Harvard professor.
Prosecutors said Harvard’s Charles Lieber lied to the Pentagon and NIH about his involvement in the Thousand Talents Plan -- a Chinese government scheme that offers mainly Chinese scientists working overseas lavish financial incentives to bring their expertise and knowledge back to China. 

Lieber also lied about his affiliation with China’s Wuhan University of Technology.
During at least part of the time he was signed up with the Chinese university, Lieber was also a “principal investigator” working on at least six research projects funded by U.S. Defense Department agencies, court documents show.
A lawyer for Lieber did not respond to a request for comment.

Born to Spy: The Chinese and Sino-American Massive Threat

Scientists With Links to China Are Stealing Biomedical Research

Nearly 200 investigations are underway at major academic centers. Researchers of Chinese descent are usual suspects.
By Gina Kolata

The M.D. Anderson Cancer Center in Houston. Administrators have investigated five faculty members on suspicions that they stole intellectual property or violated funding rules.

The Sino-American scientist at M.D. Anderson Cancer Center in Houston was hardly discreet. 

“Here is the bones and meet of what you want,” he wrote in a misspelled email to researchers in China.
Attached was a confidential research proposal, according to administrators at the center. 

The scientist had access to the document only because he had been asked to review it for the National Institutes of Health — and the center had examined his email because federal officials had asked them to investigate him.
The N.I.H. and the F.B.I. have begun a vast effort to root out scientists who are stealing biomedical research for China from institutions across the United States.

Almost all of the incidents they uncovered and that are under investigation involve scientists of Chinese descent, including naturalized American citizens, stealing for China.
Seventy-one institutions, including many of the most prestigious medical schools in the United States, are now investigating 180 individual cases involving theft of intellectual property. 

The cases began after the N.I.H., prompted by information provided by the F.B.I., sent 18,000 letters last year urging administrators who oversee government grants to be vigilant.
So far, the N.I.H. has referred 24 cases in which there may be evidence of criminal activity to the inspector general’s office of the Department of Health and Human Services, which may turn over the cases for criminal prosecution. 

“It seems to be hitting every discipline in biomedical research,” said Dr. Michael Lauer, deputy director for extramural research at the N.I.H.
China is exploiting the openness of the American scientific system to engage in wholesale economic espionage. 

The scale of the dragnet has sent a tremor through the ranks of suspected Sino-American and Chinese biomedical researchers.
“You could take a dart board with medical colleges with significant research programs and, as far as I can tell, you’d have a 50-50 chance of hitting a school with an active case,” said Dr. Ross McKinney Jr., chief scientific officer of the Association of American Medical Colleges.
The theft involves not military secrets, but scientific ideas, designs, devices, data and methods that may lead to profitable new treatments or diagnostic tools.
Some researchers under investigation have obtained patents in China on work funded by the United States government and owned by American institutions, the N.I.H. said. 

Others are suspected of setting up labs in China that secretly duplicated American research, according to government officials and university administrators.
The N.I.H. has not named most of the scientists under investigation, citing due process, and neither have most of the institutions involved. 

“As with any personnel matter, we typically do not share names or details of affected individuals,” said Brette Peyton, a spokeswoman at M.D. Anderson.
But roughly a dozen Chinese scientists are known to have resigned or been fired from universities and research centers across the United States so far. 

Some have declined to discuss the allegations against them; others have denied any wrongdoing.
In several cases, Chinese scientists supported by the N.I.H. or other federal agencies are accused of accepting funding from the Chinese government in violation of N.I.H. rules. 

Some have said that they "did not know" the arrangements had to be disclosed or were forbidden.

“How would you feel if you were a U.S. scientist sending your best idea to the government in a grant application, and someone ended up doing your project in China?” said Dr. Ross McKinney, chief scientific officer at the Association of American Medical Colleges.

In August, Feng Tao, 48, a chemist at the University of Kansas known as Franklin, was indicted on four counts of fraud for failing to disclose a full-time appointment at a Chinese university while receiving federal funds.
His lawyer, Peter R. Zeidenberg, declined to comment on Tao’s case but suggested that prosecutors were targeting academics nationwide who had made "simple" mistakes.
“Professors, they get their summers off,” he said in an interview.
“Oftentimes they will take appointments in China for the summer. They don’t believe they have to report that.”

The investigations have left Chinese and Sino-American academics feeling “that they are at risk,” said Frank Wu, a former president of the Committee of 100, an organization of pro-Beijing Sino-American scientists.
Wu and other critics said the cases recalled the government’s investigation of Wen Ho Lee, a scientist at the Los Alamos National Laboratory who was accused in 1999 of stealing nuclear warhead plans for China and incarcerated for months.
He pleaded guilty to a single felony count of "mishandling" secrets.

The Justice Department changed its rules in 2016, giving greater oversight over these national security cases to prosecutors in Washington.

Dr. Lauer and other officials said the investigations into biomedical research have uncovered clear evidence of wrongdoing.
In one case at M.D. Anderson, a Chinese scientist who had packed a suitcase with computer hard drives containing research data was stopped at the airport on the way to China, Dr. Lauer and officials at the center said.
Overall, they argued, the cases paint a disturbing picture of economic espionage in which the Chinese government has been taking advantage of a biomedical research system in the United States built on trust and the free exchange of ideas.
“How would you feel if you were a U.S. scientist sending your best idea to the government in a grant application, and someone ended up doing your project in China?” Dr. McKinney asked.
‘This was something we had never seen.’

The F.B.I. director Christopher Wray appearing before the Senate Judiciary Committee on July 23.

Concern at the N.I.H. about the theft of biomedical research stretches back at least to June 2016, when the F.B.I. contacted N.I.H. officials with unusual questions about the American scientific research system.
How did peer review happen? 

What sort of controls were in place? 

“They needed to know how our system worked as compared to, say, national defense,” Dr. Lauer said.
The F.B.I. declined to discuss ongoing investigations, including why it initiated so many and how targets were selected. 

But Christopher Wray, director of the F.B.I., told the Senate Judiciary Committee in July that China is using “nontraditional collectors” of intelligence, and is attempting to “steal their way up the economic ladder at our expense.”
The F.B.I.’s national field office for commercial counterespionage, in Houston, asked administrators from Texas academic and medical centers to attend classified meetings in the summer of 2018 to discuss evidence of intellectual property theft. 

The administrators were given emergency security clearances and told to sign nondisclosure agreements.
Then, acting on information from the F.B.I. and other sources, the N.I.H. in late August 2018 began sending letters to medical centers nationwide asking administrators to investigate individual scientists.
“This was something we had never seen,” Dr. Lauer said. 

“It took us a while to grasp the seriousness of the problem.”
Some of the first inklings of trouble were discovered by administrators at M.D. Anderson, a prominent cancer research and treatment center. 

Between August 2018 and January 2019, five letters arrived at the center from the N.I.H. asking administrators to investigate the activities of five Chinese faculty members.
Dr. Peter Pisters, president of the cancer center, said he and his colleagues reviewed faculty emails, and they turned up disturbing evidence.
Among the redacted emails provided to The New York Times was one by a Chinese scientist planning to whisk proprietary test materials to colleagues in China. 

“I should be able to bring the whole sets of primers to you (if I can figure out how to get a dozen tubes of frozen DNA onto an airplane),” he wrote.

Chinese moles: Li Xiao-Jiang, right, and Li Shihua in Guangzhou, China. They were employed at Emory University in Atlanta for more than 20 years.

The redacted M.D. Anderson emails also suggest that a Chinese scientist at the medical center sent data and research to the Chinese government in exchange for a $75,000 one-year “appointment” under the Thousand Talents Program, which Beijing established a decade ago to recruit scientists to Chinese universities.
Researchers are legally obligated to disclose such payments to the N.I.H. and to their academic institutions, and the scientist had not done so, according to an internal report on the investigation.
Still another Chinese scientist at M.D. Anderson had forwarded a confidential research proposal to a contact in China, writing, “Attached please find an application about mitochondrial DNA mutation in tumor development. Please keep it to yourself.”
Administrators at M.D. Anderson said three of the Chinese scientists had resigned and one had retired. 

The fifth case involved a scientist whose transgressions may not be serious enough to be fired.
Xifeng Wu, who left M.D. Anderson and is now dean of the School of Public Health at Zhejiang University in China, declined to comment on the circumstances of her resignation. 

“I would like to focus on my research,” she said.
M.D. Anderson is not the only institution wrestling with Chinese scientific misconduct.
Last month, two married scientists, Yu Zhou, 49, and Li Chen, 46, who had worked at Nationwide Children’s Hospital in Columbus, Ohio, for a decade, were indicted on charges that they stole technology developed at the hospital and used it to apply for Chinese patents and set up biotech companies in China and the United States.
In May, two scientists at Emory University in Atlanta, Li Xiao-Jiang and Li Shihua, were fired after administrators discovered that Li Xiao-Jiang had received funding from China’s Thousand Talents Program.
The couple had worked there for more than two decades, researching Huntington’s disease. University administrators declined to provide further information.

In July, Kang Zhang, the former chief of eye genetics at the University of California, San Diego, resigned after local journalists disclosed his involvement with a biotech firm in China that relies on research he had performed at the university.
Zhang, also a member of the Thousand Talents Program, did not tell the university about his role. 

Dr. Michael Lauer, deputy director for extramural research at the National Institutes of Health in Bethesda, Md. “We know there are companies formed in China for which we funded the research,” he said.

What is coming to light, Dr. Lauer said, is “a tapestry of incidents.”
Start-up companies in China were founded on scientific and medical technology that the N.I.H. developed with taxpayer money. 

“We know there are companies formed in China for which we funded the research,” Dr. Lauer said.
Scientists of Chinese descent also secretly received patents in China for research conducted in the United States, according to Dr. Lauer, and researchers in the Thousand Talents Program signed contracts that require them to provide the Chinese government with confidential results obtained in the United States or other lab discoveries.
“If the N.I.H. funded it, it should be available to U.S. taxpayers,” said Dr. McKinney, of the Association of American Medical Colleges. 

“But if a project is also funded in China, it is moving intellectual property to China.”

Chinese and Sino-American Massive Threat

The National Institutes of Health in Bethesda, Md. 

Federal and academic officials stress that they are not targeting Chinese researchers on the basis of their ethnicity. 

But the F.B.I.’s silence regarding how so many investigations began has exacerbated concern that the government’s efforts to uncover economic espionage may tar all Chinese and Sino-American scientists.

With the Trump administration imposing tariffs intended to punish violations of intellectual property rights, Wu sees a sharp reversal in attitudes about China and the Chinese.

“I am getting calls and emails constantly now from ethnic Chinese — even those who are U.S. citizens — who feel suspected,” he said. 

To Dr. Lauer, the charges of racism are unfounded. 

“Not all the foreign influence cases involve China,” he said. 

“But the vast majority do.”
The real question, he added, is how to preserve the open exchange of scientific ideas in the face of growing security concerns. 

At M.D. Anderson, administrators are tightening controls to make data less freely available.
People can no longer use personal laptops on the wireless network. 

The center has barred the use of flash drives and disabled USB ports. 

And all of its employees’ computers can now be monitored remotely.
The N.I.H. is clamping down, too. 

It recommends that reviewers of grant applications have limited ability to download or print them. Those traveling to certain regions should use loaner computers, it says, and academic institutions should be alert to frequent Chinese travel by scientists, or frequent publishing with colleagues outside the United States.
The National Science Foundation has commissioned an independent scientific advisory group to recommend ways of balancing openness and security, and warned scientists it funds that they are prohibited from participating in programs like China’s Thousand Talents Program.
The F.B.I. has given research institutions tools to scan emails for keywords in Mandarin that might tip off administrators to breaches, according to Dr. McKinney.
“The effects this will have on long-term, trusting relationships are hard for us to face,” he said. 

“We just are not used to systematic cheating.”

The Nasty Truth Behind Confucius Institutes

They function as organs for dissemination of Chinese Communist propaganda.

By RACHELLE PETERSON
Senator Josh Hawley (R., Mo.) 

Chinese-government-sponsored Confucius Institutes are “a tool for China to spread influence and exercise soft power,” “a known threat to academic freedom,” and “a danger to our national defense and security,” says Senator Josh Hawley (R., Mo.) in a letter sent last week to the University of Missouri and Webster University.
Both institutions host Confucius Institutes, campus centers that teach Chinese language and culture and are funded and partly staffed and overseen by the Chinese government.
Hawley urges the universities to “reconsider” those relationships.
Hawley’s conclusions aren’t just his own personal notions.
He cites FBI director Christopher Wray, who for the last year and a half has publicly warned colleges about Confucius Institutes.
Just last week Wray testified, in response to questioning from Hawley, that Confucius Institutes are “part of China’s soft power strategy and influence” because they “offer a platform to disseminate Chinese government or Chinese Communist Party propaganda, to encourage censorship, to restrict academic freedom.”
Hawley cites Li Changchun, a senior member of the Chinese Communist Party, who famously declared Confucius Institutes “an important part of China’s overseas propaganda set-up.” 
He cites North Carolina State University, which canceled an event with the Dalai Lama under pressure from its Confucius Institute. 
And he cites the fact that ever-increasing numbers of American colleges and universities — now 24 of them — have cut ties with their Confucius Institutes. (Hawley also cites an article I wrote, based on my 2017 report Outsourced to China: Confucius Institutes and Soft Power in American Higher Education.)
Hawley’s concerns, well grounded and substantial, are nothing surprising.
What is surprising are the reactions of Mizzou and Webster. 
After several years of growing evidence that Confucius Institutes are all-round a bad deal for colleges, they are doubling down in defense of their Confucius Institutes.
University of Missouri spokesman Christian Basi assured the public that all Chinese-government-sponsored teachers on its campus are mere “interns” and that Mizzou, having previously been in touch with the FBI, is “doing the proper things to monitor” possible academic espionage.
Basi also says that Mizzou will review its contract for the Confucius Institute before it expires in 2021 but that the university has already “made some changes to policies and procedures.”
Webster University president Elizabeth Stroble went two leaps further.
One day after receiving Hawley’s letter, she dashed off a response, declaring, “We have no reason to believe that the Confucius Institute at Webster University creates the risks described in your letter.” Stroble demanded of Hawley, “If you are aware of evidence that anyone is using the Confucius Institute at Webster University for a nefarious purpose, please share such evidence with us without delay.”
Mizzou and Webster should take Hawley’s concerns more seriously.
Reflexively declaring that all the FBI’s warnings involve some other university somewhere else reflects poorly on Mizzou and Webster’s commitment to safeguard academic freedom and protect their students from propaganda — let alone from espionage.
Mizzou, where professor Melissa Click called for “some muscle over here” to oust a student journalist from a 2015 protest, and whose system president and campus chancellor resigned rather than face down activists’ demands, is probably outstanding example No. 1 of a poorly run public university. 
In the two years following those events, enrollment dropped 35 percent and Mizzou eliminated 400 positions.
That track record doesn’t inspire confidence in Mizzou’s ability to manage the risks of a Confucius Institute.
Webster in particular has a poor track record of keeping tabs on its Confucius Institute.
One year ago the former director of its Confucius Institute was convicted in federal court of embezzling $375,000 from the university.
Deborah Pierce had directed funds to a separate bank account, from which the federal government recovered an additional $160,000.
That kind of outright illegal behavior is rare.
The greater danger is subtle.
Confucius Institutes teach the Chinese government’s preferred version of Chinese culture, a version whitewashed of Muslim Uighurs, 1 million of whom are currently held in concentration camps in East Turkestan.
Confucius Institute teachers, Chinese nationals hired and paid by the Chinese government, are coached to omit the Tiananmen Square massacre and to represent Taiwan as part of China. 
One Chinese staff member at a Confucius Institute told me that if she were asked about Tiananmen Square, she would “show a picture and point out the beautiful architecture.”
The Hanban, the Chinese government agency tasked with overseeing Confucius Institutes, instructs teachers to focus on lessons that result in “deepening friendly relationships with other nations.” That’s not necessarily harmful — but it leaves students with a remarkably one-sided education.
Confucius Institutes are central players in China’s long-term strategy to gain influence in American institutions.
Colleges and universities see them as financial goody bags: free teachers and textbooks plus ancillary funds to offer Chinese classes, study-abroad funding, sponsored trips to China for the university president and other administrators, access to full-tuition-paying Chinese students.
Webster University operates a campus in China. 
Half of all Mizzou’s foreign students come from China.
Any institute that spreads propaganda has no place on American college campuses.
Too many have eagerly accepted China’s funding without protecting academic integrity.
Senator Hawley deserves credit for calling the University of Missouri and Webster University to account.
It’s time for Confucius Institutes to go.

No Country for Chinese Men

FBI Urges Universities To Monitor Chinese Students And Scholars In The U.S.
By EMILY FENG

University administrators say the FBI, whose headquarters are shown above, has urged them to monitor Chinese students and scholars.

U.S. intelligence agencies are encouraging American research universities to develop protocols for monitoring students and visiting scholars from Chinese state-affiliated research institutions, as U.S. suspicion toward China spreads to academia.
Since last year, FBI officials have visited at least 10 members of the Association of American Universities, a group of 62 research universities, with an unclassified list of Chinese research institutions and companies.
Universities have been advised to monitor students and scholars associated with those entities on American campuses, according to three administrators briefed at separate institutions. 

FBI officials have also urged universities to review ongoing research involving Chinese individuals that could have defense applications, the administrators say.
"We are being asked what processes are in place to know what labs they are working at or what information they are being exposed to," Fred Cate, vice president of research at Indiana University, tells NPR. 

In a statement responding to NPR's questions, the FBI said it "regularly engages with the communities we serve. As part of this continual outreach, we meet with a wide variety of groups, organizations, businesses, and academic institutions. The FBI has met with top officials from academia as part of our ongoing engagement on national security matters."
While law enforcement agents have discussed university monitoring of other nationalities as well, these FBI briefings addressed visitors from China in particular who are involved in science, technology, engineering and math.

Administrators say the universities briefed by the FBI have not yet implemented additional monitoring protocols. 

Separately, intelligence officers have also briefed hundreds of American CEOs, investors and think tank experts on Chinese cybersecurity and espionage threats. 

"What we provide them is the classified information that we get from the collection priorities of China specifically: What they're trying to collect on, what they're interested in our campuses," William Evanina, director of the National Counterintelligence and Security Center, told NPR.
This March, U.S. intelligence officials briefed about 70 college administrators of the American Council on Education, according to university participants. 

The officials said the presidents should increase oversight of Chinese researchers and avoid research funding from Chinese firms like Huawei.
The nation's primary biomedical research agency, the National Institutes of Health, is now investigating grant recipients for not disclosing collaboration or funding from China and for sharing peer-review grant material with Chinese researchers. 

"Chinese entities have mounted systematic programs to influence NIH researchers and peer reviewers," warned NIH Director Francis Collins in a memo sent to more than 10,000 research institutions last August.

In May, the Commerce Department put Huawei on a trade blacklist, which prevents U.S. companies from selling products to the Chinese telecom firm without federal authorization. 

But the pressure to divest from research collaborations with Huawei and ZTE, another telecom company, began early last year, said three university administrators.
"For months up until [May], government officials were saying, 'We really don't think you should be doing business with Huawei,' " says Cate. 

"We said, 'Why don't you put them on a list and then we won't do business?' And they're like, 'Oh, the list process is way too slow.' "
The FBI visits have caused uncertainty among U.S. academics about whether to accept federal grants for research that may involve Chinese scholars. 

"We don't say you can't, because we don't have any legal authority to say they can't," Cate says. 

"But we say you should be aware there may be some sensitivity about this."
Several university presidents have issued statements this year reaffirming their commitment to Chinese researchers and students.
Last month, pro-China Yale University's president, Peter Salovey, said he was "working with my presidential colleagues in the Association of American Universities (AAU) to urge federal agencies to clarify concerns they have about international academic exchanges. The AAU has encouraged agencies to use the tools already in place, such as export controls, while affirming the principle of open academic exchange for basic research."
Salovey's office declined to comment further when contacted by NPR.
Universities and companies use software that automatically reviews international research collaborations, commercial transactions and other exchanges and then matches them up with existing blacklists to ensure they do not violate export control laws.
Numerous universities, including the Massachusetts Institute of Technology, Stanford University and the University of Illinois, have already cut off research collaborations with Huawei.
Besides Huawei, no other Chinese entities singled out to universities by the FBI are currently on a trade blacklist, according to the three university administrators.
That means any monitoring of specific Chinese individuals at the university level would have to be done manually, when admitting or employing them, possibly leaving a wide margin of error during evaluation.
"You're really looking at compliance systems that have to be rolled out on a department-by-department basis and person-by-person level to see if you're sticking research data in an envelope and mailing it to China," Cate says.
The Trump administration has long accused China of stealing American technology, a key factor behind the trade war between the two countries.

FBI Director Christopher Wray addresses the Council on Foreign Relations on April 26 in Washington, D.C. Wray spoke about "the FBI's role in protecting the United States from today's global threats."

As the mood in Washington, D.C., becomes more aggressive toward China, intelligence agencies have been visiting not just universities but also American tech companies to dissuade them from collaborations with Chinese entities.
"We have to wake this country up to what China is doing," Sen. Mark Warner, Va.-D, said at the Brookings Institution last month. 

"For this reason, I have been convening meetings between the intelligence community and outside stakeholders in business and academia to ensure they have the full threat picture and, hopefully, make different decisions about Chinese partnerships."

China's 340,000 potential or actual spies
Chinese students have come under particular suspicion. 

More than 340,000 were studying in the U.S. last year, according to the Department of Homeland Security. 

Since last July, Chinese students studying, in particular, science and technology fields must undergo additional screening, resulting in delayed visas for hundreds of students.
In May, Republicans introduced legislation in the House and Senate that would deny visas to Chinese researchers affiliated with Chinese military institutions.
"The Chinese intelligence services strategically use every tool at their disposal — including state-owned businesses, students, researchers and ostensibly private companies — to systematically steal information and intellectual property," FBI Director Christopher Wray said at the Council on Foreign Relations in April.
Former FBI agents say the bureau's recent visits to universities are merely an extension of long-running efforts to collaborate with the private sector and academia on national security issues.
"What the FBI has been doing is really more of an outreach and education program," says Todd K. Hulsey, a former counterintelligence official who retired from the FBI in 2014. 

Hulsey explained that such meetings began as early as two decades ago over concerns that Chinese student associations were fronts for Chinese intelligence recruiting: "It's to let these universities know that there is an existing threat to our economy."
National security concerns at universities increased after the 1991 collapse of the Soviet Union, which sent a wave of former Soviet bloc researchers to the U.S., says Edward Shaw, a former FBI special agent who retired in 2014.
Even back then, however, government agencies contacted universities with specific individuals of concern rather than presenting a broad list of institutions.
"It's casting a wide net," says Shaw. 

"When you're getting information from various government agencies and other trusted sources that a specific person is in the country and you are more targeted, you're using your resources better."

Born to Spy

Many Chinese students at US colleges are Chinese spies

By Newt Gingrich

The Heritage Foundation trade economist Tori Whiting says the Trump administration needs to focus on technology transfer, intellectual property protection and structural reforms in China.
When most Americans think of espionage, we think of debonair foreign spies sneaking around military compounds – or bespectacled hackers hammering away at keyboards to steal top-secret information from foreign adversaries.
But there is an entire world of espionage happening right under our noses – at American colleges and universities.
China's intelligence services routinely probe computer systems at higher education institutions in the United States – and they also enlist and implant students and professors as assets to pass important research and findings to their spy agencies.
The main goal isn’t typically to learn any classified state secrets (not in academic espionage anyway). China wants to steal the important technological advancements, research, and innovations created by our nation's best and brightest researchers and scientists.
In 2013, the Commission on the Theft of Intellectual Property said that this academic espionage made up a significant part of the estimated $300 billion of intellectual property theft America endured that year.
According to the commission, "American scientific innovations and new technologies are tracked and stolen from American universities, national laboratories, private think tanks, and start-up companies, as well as from the major R&D centers of multinational companies."
This is a serious problem for the United States. 

If this level of academic espionage continues, our ability to lead the world in innovation and new technology could be severely hampered – and the future could be defined by the countries who are stealing our ideas.
One of the biggest offenders is China. 

Former National Counterintelligence Executive Michelle Van Cleave told the U.S.-China Economic and Security Review Commission on June 9, 2016 that "hundreds of thousands of students and academicians" aid China’s spy operations.
These students, professors, and researchers (either willingly or through intense pressure and coercion from the Chinese Communist Party) help to "potentially extend the reach of Chinese intelligence into the core structures of our nation's security," Van Cleave told the commission.
Of particular concern are China’s Confucius Institutes that have been established on campuses in the U.S. and across the world. 

At first blush, these institutes appear to be legitimate academic foreign exchange programs promoting Chinese language and cultural studies. 

However, they are also used to spread Chinese Communist Party propaganda and soft power by promoting the party’s vision of China. 

Concerns have been raised that they could be used for espionage efforts.
On Feb. 13, 2018, FBI Director Christopher Wray told the Senate Intelligence Committee that China is beginning to pull back on this effort, but the institutes are still "something that we're watching warily and in certain instances have developed ... appropriate investigative steps."
Luckily, there is an ongoing effort in Congress to curb this activity and protect American colleges and universities from being helpless targets of Chinese espionage. 

The "Stop Higher Education Espionage and Theft Act of 2019," or SHEET Act, was introduced in the Senate by Sen. Ted Cruz, R-Texas. 

Rep. Francis Rooney, R-Fla., is carrying the proposal in the House.
This bill would create a new way for federal law enforcement to designate an entity suspected of spying in our colleges and universities as a "foreign intelligence threat to higher education." (The designation will be promptly appealable when warranted.)
Colleges and universities that accept gifts from or enter into contracts with designated threats will have more stringent reporting requirements under the Higher Education Act. 

If evidence of espionage is found, authorities will be able to quickly remove identified threats.
This is a critically important problem that we must solve. 

When foreign countries steal our research and ideas, American researchers, innovators, and thinkers lose the ability to lead our country into the future. 

Ultimately, this costs American jobs – and our security.
Congress should pass the SHEET Act as soon as possible.

China's Cyberattacks

Chinese hacker who obtained details of 78 million people is charged in US with one of the worst data breaches in history
by Robert Delaney

This photo provided by the FBI shows a wanted poster of Wang Fujie (left). The US Justice Department says a grand jury has indicted Wang and another man identified only as John Doe for hacking into the computers of health insurer Anthem Inc and three other, unnamed companies, in an indictment unsealed May 9, 2019, in Indianapolis. 

A US federal grand jury on May 9 charged a Chinese national in a hacking campaign described by the Justice Department as “one of the worst data breaches in history”, an effort that yielded the personal data of 78 million people.
Wang Fujie, also known as Dennis Wang, and another individual in the indictment, have infiltrated the US-based computer systems of US health insurer Anthem and three other companies, the Justice Department said in a statement on May 9.
“The allegations in the indictment unsealed today outline the activities of a brazen China-based computer hacking group that committed one of the worst data breaches in history,” Assistant Attorney General Brian Benczkowski, said in the announcement.
“These defendants attacked US businesses operating in four distinct industry sectors, and violated the privacy of over 78 million people by stealing their [personally identifiable information].”
The indictment was the latest in a series of efforts by the US Federal Bureau of Investigations to tackle hacking operations and cybertheft emanating from China.

The bureau has become increasingly vocal about the country.
The second suspect, who was identified in court documents as John Doe and through aliases including Zhou Zhihong, conducted the hacking activities in China.
The other three companies affected by the hacks, conducted between February 2018 and January 2019, operated in the technology, basic materials and communication services sectors, according to the department.
Information taken from the companies included health identification numbers, birth dates, social security numbers, addresses, telephone numbers, email addresses, and employment information.
Wang and Doe obtained personal information by installing malware on the victim companies’ computers systems through “spearfishing” emails sent to the companies’ employees, according to the indictment, which was filed with the Indianapolis division of the federal court’s Southern District of Indiana, where Anthem is based.

The information obtained by the defendants was encrypted and sent through multiple computers to destinations in China. 

The files installed in the victim companies’ computers systems were then deleted.
Anthem and the other US companies involved notified the FBI when they became aware of the operation, allowing the federal investigators to monitor the activity and trace it to the defendants, according to the Justice Department.
The FBI has worked closely with companies in recent years to respond to attempts by Chinese to steal information from US companies. 

GE Aviation, for example, had worked with the bureau for more than a year to lure Xu Yanjun, a spy working for China’s Ministry of State Security, into a law enforcement trap in Belgium last year. Xu was then extradited to the US and is now awaiting trial.
According to Xu’s indictment filed in the Southern District of Ohio, the MSS officer sought GE Aviation technology used in the development of fan blades and engine encasements.
FBI Director Christopher Wray has been an outspoken critic of China since he assumed his post in 2017.
Last year, Wray accused Beijing of increasing its use of “non-traditional collectors” – such as professors, scientists and students – for its intelligence gathering.
“One of the things we’re trying to do is view the China threat as not just a whole-of-government threat but a whole-of-society threat on their end, and I think it’s going to take a whole-of-society response by us,” Mr Wray testified at a Senate hearing in February 2018.
Eight months later at another hearing, Mr Wray declared China “the broadest, most complicated, most long-term” counter-intelligence threat confronting the US – surpassing even Russia, whose interference in the 2016 election dominated headlines for more than two years and continues to roil the country.
Speaking at a separate Senate hearing in December, Bill Priestap, the FBI’s assistant director of counter-intelligence, also called for more coordinated action to counter espionage and cybertheft originating in China.
“There are pockets of great understanding of the threat we’re facing and effective responses, but in my opinion we’ve got to knit that together better,” he said.
Warning against what he called “ad hoc responses”, Priestap added: “We need more people in government, more people in business, more people in academia pulling in the same direction to combat this threat effectively.”

Global Thief

From university funding to computer hacking: How China steals Western innovation
By James Cook

China is seeking to "steal its way up the economic ladder" at the expense of Western innovation

China is seeking to "steal its way up the economic ladder" at the expense of Western innovation.
Those were the damning words of FBI Director Christopher Wray who last week said that China poses a "multi-layered" threat to US interests.
His comments were made as Washington's campaign to ban Chinese telecoms firm Huawei intensified.
"China has pioneered a societal approach to stealing innovation in any way it can from a wide array of businesses, universities and organisations," he said.
"They're doing it through Chinese intelligence services, through state-owned enterprises, through ostensibly private companies, through graduate students and researchers, through a variety of actors all working on behalf of China."
It's something known only too well by businesses desperate to crack China's lucrative market of 1.3bn people.
Among them is Apple, who saw Chinese electronics business Xiaomi spend years replicating its iPhone designs.
Its chief executive even modelled himself on Apple founder Steve Jobs, wearing similar clothing and copying his presentations.
For Apple design chief Jony Ive, the constant replication was a source of frustration.
“You spend seven or eight years working on something, and then it’s copied. I have to be honest, the first thing I can think, all those weekends that I could have at home with my family but didn’t. I think it’s theft, and it’s lazy,” he said in 2014.
While Xiaomi was a brazen example of a Chinese business copying Western designs, there are far more advanced ways which Chinese businesses have used to copy Western innovation.
Huawei has been at the centre of a political row over concerns that its closeness to the Chinese government could introduce espionage risks if its hardware is used in the development of 5G networks around the world. 
Many countries, including the US, have taken a firm stance against Huawei’s involvement in the new networks, but other nations including the UK have taken a softer approach.
The political row around Huawei often overlooks the company’s historic practice of stealing Western innovation, however.
Over 15 years ago, Huawei took part in a costly legal battle with US technology firm Cisco over allegations that Huawei copied Cisco’s software for its routers.
Huawei eventually admitted that it had cloned the software and pledged to remove it from its products.
Huawei had been systematically reverse-engineering Cisco’s routers, a practice which would have allowed the Chinese telecoms company to peer into the inner workings of Cisco’s software and cherry pick sections to use in its own products.
Cisco sued Huawei for patent infringement in 2003, only settling the case after Huawei admitted to using Cisco’s source code.
The US government has also accused Huawei employees of attempting to copy “Tappy,” a smartphone-testing robot built by US network T-Mobile.
Huawei employees with access to the robot took photographs of Tappy and one employee has been accused of removing one of its arms. 
Concern around Chinese replication of technology doesn't end with reverse-engineering.
As businesses like Huawei have become more successful and expanded around the world, they have begun investing in academic research.
Huawei has spent millions of pounds in the UK alone funding research into technologies such as mobile phone networks. 
But experts have warned that these donations risk handing British innovations to China.
“China is using broad research relationships with universities and other entities to try and fill in any technological gaps,” said Michael Wessel, a commissioner on the US-China Economic and Security Review Commission.
Companies are trying to “advance Chinese standards so that Huawei and other Chinese-produced equipment will be the equipment of choice as networks get built out,” he said.
The issue of Huawei funding university research has been particularly sensitive in Canada, which has seen a political debate over the hundreds of patents Huawei has been granted thanks to Canadian research it has funded.
A similar debate has not yet taken place in the UK, although Oxford University suspended all research grants and donations from Huawei following a Telegraph report into the financial backing published last year.
Apart from the continued practice of university funding, other Chinese businesses have for years been systematically cloning Western software and hardware for sale in the Chinese market.
Earlier this month, it was reported that a cloned version of popular Nintendo smartphone game Fire Emblem Heroes had been approved by the government and was available for download on iPhones and Android phones.
The app had been reverse-engineered, with the only substantive change being the translation of the game’s text into Simplified Chinese.
Chinese businesses have also grown adept at copying hardware manufactured in Chinese factories.
These factories are given the blueprints for technology hardware, as well as prototype devices that can help to create cloned devices.
Quartz reported in 2016 that an entrepreneur who invented a smartphone case that folds out into a selfie stick was shocked to find a copy of his product on sale through Chinese websites at a cheaper price.
It’s an extremely common issue seen in Chinese factories, which are used to produce counterfeit products that have been designed to be as similar as possible to the original products. 
Often, the cloned products are sold online for a cheaper price.
The nature of China’s laws around foreign businesses are key to helping transfer technology from Western companies to China.
A report to the US Congress by the Department of Justice published in 2018 said that “China uses foreign ownership restrictions, such as joint venture requirements and foreign equity limitations, and various administrative review and licensing processes, to require or pressure technology transfer from US companies.”
Forcing the creation of joint ventures has meant that businesses wishing to operate in China have to transfer information to Chinese businesses, raising concerns that the products may be copied.
The report to Congress also described widespread hacking of computer networks in order to gain access to confidential information that would be extremely useful to Chinese businesses.
In 2014, the US government indicted five members of the Chinese military over charges that they hacked into the networks of large US power and steel companies in order to steal trade secrets.
These hacking attacks are a far cry from the more prosaic copying of devices like crowdfunded selfie sticks, but the ongoing hacks show a continued effort to promote Chinese businesses by handing them closely guarded trade secrets.
The promise of a new law that could grant businesses “fair treatment” inside China is seen as a step in the right direction, but Western businesses don’t anticipate an immediate end to the copying, cloning and hacking which has gone on for years.

American Colleges Hosted an Important Part of China’s Propaganda Set-Up. Now They’re Bailing Out.

Congress has demanded more scrutiny of Confucius Institutes.
By DAN SPINELLI

The patron saint of China's propaganda machine

When the University of Minnesota established a Confucius Institute, or center for Chinese language learning, in September 2008, it quickly turned into one of China’s overseas success stories. 

With its efforts to promote the study of Chinese among students “from preschool to 12th grade,” the Minnesota center won plaudits from Hanban, a Chinese government organization that oversees the institutes and China’s other international language partnerships. 

Three years after its opening, the Minnesota outpost was named a Confucius Institute of the Year and between 2014 and 2018, China contributed more than $1.2 million toward the Minnesota center’s operation, according to a report in the Minnesota Daily student newspaper.
In June, the university will cut ties with Hanban, and Minnesota’s Confucius Institute will close. University officials cited a desire to refocus “our China-related activities through a strengthened and enhanced China Center,” spokesperson Katrinna Dodge said in an email to Mother Jones. 

In doing this, Minnesota joins the ranks of roughly a dozen other American colleges that have abandoned their partnerships with Hanban amid increasing criticism of Beijing’s growing authoritarianism and hostility to free speech. 

“Most agreements establishing Confucius Institutes feature nondisclosure clauses and unacceptable concessions to the political aims and practices of the government of China,” the American Association of University Professors concluded in a 2014 report, which said the centers “function as an arm of the Chinese state and are allowed to ignore academic freedom.”
Beijing first imported Confucius Institutes to American universities in 2004, offering generous subsidies and even staff, but the centers have attracted controversy from the start. 

As retired Communist Party bigwig Li Changchun once said, these institutes are “an important part of China’s overseas propaganda set-up.” 

Marshall Sahlins, a University of Chicago anthropologist, called them “academic malware” with propaganda objectives “as old as the imperial era.” 

Many scholars and lawmakers wanted nothing to do with the institutes, which use an authoritarian government’s money to bankroll hundreds of classes and programs at colleges, high schools, and elementary schools. 

Now, as tensions between the US and China have increased, the White House, lawmakers from both parties, and the intelligence community have singled out Confucius Institutes as a nefarious symbol of China’s creeping influence.
In a January Senate hearing, FBI Director Christopher Wray said China posed a threat “more deep, more diverse, more vexing, more challenging, more comprehensive, and more concerning than any counterintelligence threat I can think of.” 

He acknowledged last year that federal agents had targeted some Confucius Institutes with “appropriate investigative steps” over concerns of improper Chinese influence. 

Sen. Marco Rubio (R-Fla.) introduced a bill last month that would require Confucius Institutes to register with the Justice Department as foreign agents, which quickly gained bipartisan support, and the most recent defense appropriations bill restricts schools with Confucius Institutes from receiving Pentagon language grants. “
“Foreign governments should not be funding student organizations on the campuses of democratic societies,” says Larry Diamond, a senior fellow at Stanford University’s Hoover Institution, who examined Chinese influence in American higher education for a November report. 

“And certainly not the foreign government of authoritarian countries.”
In addition to citing concerns about transparency and censorship, lawmakers have also identified a glaring discrepancy between the freedoms afforded to Confucius Institutes in the United States and China’s crackdown on a similar slate of American-run centers abroad. 

In February, a bipartisan report from the Senate Homeland Security subcommittee on investigations identified “over 80 instances in the past four years” in which China interfered with State Department efforts to set up and access “American Cultural Centers” at Chinese universities. 

The US chose to stop funding the program last year amid continuing obstacles put in place by China. 

The report also noted that “nearly 70 percent” of US schools neglected to report Hanban contributions to the Department of Education, despite a requirement that postsecondary institutions report foreign gifts above a certain threshold.
Sen. Tom Carper (D-Del.), the subcommittee’s top Democrat, released a statement with the report that compared China’s influence activities with Russia’s efforts to intervene in the 2016 presidential election. 

“Given what our country experienced during the 2016 election and what we’re preparing to grapple with in 2020,” he said, “it is critical that we be vigilant in combatting foreign efforts to influence American public opinion.”
Diamond does not consider Confucius Institutes a security issue on par with China’s increasing surveillance of its own citizens or its widespread theft of intellectual property, but he argues that unless contracts with Hanban are made public, and assurances put in place to ensure American law governs the centers, the agreements “should be terminated.” 

Gao Qing, a Chinese agent who directed George Mason University’s Confucius Institute and now runs a nonprofit in Washington, DC, that advocates for these centers nationwide, wrote in an email to Mother Jones that Confucius Institutes are meant to offer “apolitical educational programs” and not “engage with any political activity and do not teach politics and policies.”
Confucius, the ancient philosopher whose teachings fell out of favor after the Communist Revolution, became the perfect symbol for China’s renaissance when fifteen years ago, government officials formed a Chinese language-learning center in Seoul. 

More than a century after China ceded control of the Korean peninsula to Japan—and with it, wider influence over the Asia-Pacific region—Beijing was mounting a comeback in its own backyard. 

Who better to adorn the name of its signature foreign influence project than Confucius, a philosopher with a name much easier to market overseas than Marx or Mao.
In the United States, interest in learning Chinese had been rising, but a shortage of qualified instructors left school administrators searching for help. 

By 2008, only 3 percent of elementary schools with language programs taught Chinese. 

After planting roots in South Korea, in 2004, Chinese officials unveiled their first US outpost at the University of Maryland. 

Between 1991 and 1994, Annapolis had slashed funding for state universities by nearly 20 percent, resulting in dramatic cuts at College Park, the University of Maryland’s flagship site. 

Administrators eliminated eight departments and 23 degree programs, according to the Hechinger Report, a nonprofit education news site, so an infusion of Chinese funding looked even more appealing. 

But some faculty members became uncomfortable with the arrangement. 

David Prager Branner, then an associate professor of Chinese, told Mother Jones the agreement to accept funding from the Chinese government constituted a “betrayal of the University’s primary obligation: cultivating young minds and teaching them to cultivate themselves.”
“I imagine the prestige of having the first such Institute in the United States, plus generous (as we were told) funding, more than made up in their minds for the failure to apply normal academic standards,” he wrote in an email. 

He noted that the influx of new instructors with their Hanban-approved textbook “were not even vetted by the University’s own Chinese language faculty.” 

In an email to Mother Jones, a Maryland spokeswoman sent a statement from Donna Wiseman, the university’s Confucius Institute director: “As part of our partnership with Hanban, we are responsible for making decisions about the programs we offer to the community and the extracurricular activities we coordinate on campus.”“
The partnership is a tricky one, as administrators at the College of William and Mary discovered when the Dalai Lama received an invitation to speak on campus seven years ago. 

As the spiritual leader of Tibetan Buddhists, whose land has been under China’s control for centuries, the Dalai Lama is considered a “wolf in monk’s robes” by the Chinese government. 

His appearance at any American university would upset Chinese officials, but especially so at William and Mary, which months earlier had established its own Confucius Institute. 

Ahead of the visit, a university administrator flew to Beijing and briefed Hanban leaders as part of what two knowledgeable sources described as a tense, difficult conversation that included pushback from Chinese officials. 

Nonetheless, the visit went on as planned and the university’s Confucius Institute remains in operation with continuing support from Hanban.
The dust-up was awkward, but ultimately inconsequential for the university. 

Occasional controversies over transparency and improper influence, experts say, largely depend on administrators’ care in reviewing contracts and removing any questionable language from their agreements. 

Qing says Confucius Institutes “affirm the primacy of US law,” but Hanban’s website includes a set of bylaws that several administrators around the country found concerning. 

One line implies that Chinese law, with its noticeably weaker free speech protections, would ultimately govern Confucius Institutes on US soil. 

A current Confucius Institute director at an American college, who requested anonymity to speak frankly about the partnership, said this part of the agreement had “to be watered down” for his school to participate. 

The Chinese officials did not object, he said, and seemed almost to expect the pushback. 

“Some of these nuances take time to learn,” he told Mother Jones. 

“Somebody may, without realizing it, sign the template thinking that’s the way to go forward.”

When George Washington University was first considering whether to form a Confucius Institute, faculty members were put off by a provision in Hanban’s generic agreement that its partners respect the “One China” principle which maintains that Taiwan is part of the People’s Republic of China. 

The US formally adopted this policy in 1979, but the provision still concerned administrators who interpreted it as a backdoor way to stifle academic discourse about Taiwan. 

The university ultimately agreed to a contract, years later, when the provision was no longer required.
A common criticism lodged against Hanban is the secrecy of its contracts. 

“At most Institutes, the terms of agreement are hidden,” a report from the conservative National Association of Scholars found in 2017. 

The key to keeping institutes free of undue influence, several administrators and experts reiterated, involves vetting the contracts more rigorously. 

No matter how innocuous a single institute may be, now that President Trump’s foreign policy has appeared to settle on an adversarial approach to Beijing, it is likely that they will become increasingly isolated. 

Sen. Marco Rubio, one of the most persistent critics of China in Congress, expressed a growing Washington consensus when he asked during a Senate hearing this year whether China had become “the most significant counterintelligence threat this nation has faced, perhaps in its history but certainly in the last quarter century.”

Chinese Fifth Column

China is infiltrating US colleges to recruit spies, indoctrinate students

By Eric Shawn 

Born to spy: Chinese students in America

U.S. Intelligence agencies continue to warn of Beijing’s spying activities in the U.S. – including commercial espionage and the stealing of intellectual property.
“The Chinese counter-intelligence threat is more deep, more diverse, more vexing, more challenging, more comprehensive and more concerning than any counterintelligence threat that I can think of," FBI Director Christopher Wray testified at a Senate Intelligence Committee hearing last week.
And now, lawmakers are also focused on new allegations of China's attempts to influence American academia and public opinion.
A report from the director of National Intelligence is blunt: "China's intelligence services exploit the openness of American society, especially academia and the scientific community..."
"It is widespread and it is dangerous and this is legislation designed to stop that," Texas Republican Sen. Ted Cruz told Fox News about a bill he has re-introduced, The Stop Higher Education Espionage and Theft Act.
Its goal is to deter the infiltration by China of our country's universities, colleges and research institutions.
"Too many universities, I think, are gullible, are not realizing the magnitude of this threat," Cruz warned. 

"This is a concerted, organized, systematic threat to undermine our universities and undermine our economy and we need to be serious to combat it."
Several current and former Chinese students have been convicted in U.S. courts for espionage.

Chinese spy Ji Chaoqun -- who came to the U.S. on a student visa, attended Illinois Institute of Technology and enlisted in the U.S. Army Reserve -- was assigned to provide Chinese intelligence officials with information from background checks on eight American citizens -- some of whom were U.S. defense contractors

Just recently, Ji Chaoqun, who had studied electrical engineering at the Illinois Institute of Technology, was arrested and accused of working for Chinese intelligence to recruit spies here in the U.S. 

He is now awaiting trial. 

But it is not just spying that Sen. Cruz is concerned about. 

He is also raising the alarm about a Chinese-backed academic program, The Confucius Institute, that currently operates on about 100 U.S. campuses.
The Institute, financed by Beijing and designed to provide education about the country's culture, is actually indoctrinating American students with regime propaganda. 

The National Association of Scholars published a 184-page study called "Outsourced To China, Confucius Institutes and Soft Power in American Higher Education." 

 It says the Institute suppresses academic freedom, lacks transparency, and is part of China's use of soft power intended to present China in a 'positive' light in order to develop a generation of American students with selective knowledge of a major country.
"I passed into law legislation targeting, in particular, the Confucius Institutes, institutes being funded by the communist government of China," Cruz said. 

"The FBI has raised concerns very specifically about the Confucius Institutes."

At a Senate hearing last year, FBI Director Wray acknowledged that worry.
"We do share concerns about the Confucius Institutes. We have been watching that development for a while. It is just one of the tools that they take advantage of," he said.
The National Association of Scholars is calling on Congress and state legislatures to open investigations to determine "whether Confucius Institutes increase the risks of a foreign government spying or collecting sensitive information."
"The key risk is that the American public and the students hear a one-sided view of what's going on in China," said Rachelle Peterson, policy director of the National Association of Scholars, who authored the study. 

She said the Institutes should all be shut down.
"At these Confucius Institutes, the teachers are hand selected and paid by the Chinese government, the textbooks are being sent over and paid for by the Chinese government, and funding is being provided by the Chinese government," she notes.
"The only way to protect from these type of incursions from the Chinese government is to close down the Institute. There really is no safe way to operate a Confucius Institute that protects academic freedom."
Cruz said its past time to send Beijing an even stronger message than just closing the Institute's doors.
"The Chinese communist government is a dictatorship, it is cruel and repressive. It tortures and murders its citizens, and dictatorships hate sunlight, they hate truth. We are sitting here in my Senate office, over my shoulder here," he said, pointing a large painting of President Ronald Reagan addressing the crowd in Berlin during his famous "Tear down this wall" speech in 1987. 

"This a painting of Ronald Reagan standing before the Brandenburg gate, and up above written in German are the words 'tear down this wall' in the style and graffiti on the Berlin wall. I think those are the most important words said by any leader in modern times."
The senator likens that call for freedom for the millions of people living behind the Iron Curtain, to one that he says is needed to tell Beijing today.
"That's what the Chinese government fears. They fear sunlight, so they spend money trying to stifle academic freedom in our universities and universities shouldn't be willing to sell their academic freedom, they shouldn't be willing to allow the communist government to have control over discussion."
Neither the Chinese Embassy in Washington, D.C. nor Hanban, a public Chinese institution affiliated with the Chinese Ministry of Education, responded to requests from Fox News to comment about the allegations. 

But the Confucius Institute U.S. Center defended itself, by issuing a statement that said, in part:

"They are programs... dedicated to the teaching of Mandarin, cultivating Chinese cultural awareness, and facilitating global education... The programs do not teach history, politics, or current affairs... The courses are managed and supervised by U.S. universities which also decide the content, instructors, and textbooks."

But despite that defense, Rachelle Peterson has reservations.

"The American people need to know that what they are hearing about China may not be true. It may be influenced by the Chinese government's P.R. campaign, and even from the halls of academia, which are supposed to be trustworthy and respected, it may even be happening there."
She said at least 15 universities have shut down or are in the process of kicking the Confucius Institutes off their campuses, and more are expected to follow.
Senator Cruz says the University of Texas at Austin turned down Chinese funding.
“Thankfully U.T. made the right decision and said, ‘you know what, we are not going to take the Chinese money,’” he says.
“There is no doubt, in the long term, China is the single greatest geo-political competitor and threat to the United States,” Cruz warns. 

“The tools they are using are espionage and theft, and too many of our university officials are naïve to that threat, and just see free money, without the perils that are attached.”

Huawei Sting Offers Rare Glimpse of the U.S. Targeting the Chinese Rogue Company

Diamond glass could make your phone’s screen nearly unbreakable—and the FBI enlisted its inventor after Huawei tried to steal his secrets. 

By Erik Schatzker

A prototype of Akhan Semiconductor’s Miraj Diamond Glass.

The sample looked like an ordinary piece of glass, 4 inches square and transparent on both sides. 

It’d been packed like the precious specimen its inventor, Adam Khan, believed it to be—placed on wax paper, nestled in a tray lined with silicon gel, enclosed in a plastic case, surrounded by air bags, sealed in a cardboard box—and then sent for testing to a laboratory in San Diego owned by Huawei Technologies Co. 

But when the sample came back last August, months late and badly damaged, Khan knew something was terribly wrong. 

Was the Chinese company trying to steal his technology?
The glass was a prototype for what Khan’s company, Akhan Semiconductor Inc., describes as a nearly indestructible smartphone screen. 

Khan’s innovation was figuring out how to coat one side of the glass with a microthin layer of artificial diamond. 

He hoped to license this technology to phone manufacturers, which could use it to develop an entirely new, superdurable generation of electronics. 

Akhan says Miraj Diamond Glass, as the product is known, is 6 times stronger and 10 times more scratch-resistant than Gorilla Glass, the industry standard that generates about $3 billion in annual sales for Corning Inc. 

“Lighter, thinner, faster, stronger,” says Khan, in full sales mode. 

Miraj, he promises, will lead to a “fundamental next level in design.”

Miraj Diamond Glass at Akhan’s headquarters in Gurnee

Like all inventors, Khan was paranoid about knockoffs. 

Even so, he was caught by surprise when Huawei, a potential customer, began to behave suspiciously after receiving the meticulously packed sample. 

Khan was more surprised when the U.S. Federal Bureau of Investigation drafted him and Akhan’s chief operations officer, Carl Shurboff, as participants in its investigation of Huawei. 

The FBI asked them to travel to Las Vegas and conduct a meeting with Huawei representatives at last month’s Consumer Electronics Show. 

Shurboff was outfitted with surveillance devices and recorded the conversation while a Bloomberg Businessweek reporter watched from safe distance.
This investigation, which hasn’t previously been made public, is separate from the recently announced grand jury indictments against Huawei. 

On Jan. 28, federal prosecutors in Brooklyn charged the company and its chief financial officer, Meng Wanzhou, with multiple counts of fraud and conspiracy. 

In a separate case, prosecutors in Seattle charged Huawei with theft of trade secrets, conspiracy, and obstruction of justice, claiming that one of its employees stole a part from a robot, known as Tappy, at a T-Mobile US Inc. facility in Bellevue, Wash. 

“These charges lay bare Huawei’s blatant disregard for the laws of our country and standard global business practices,” Christopher Wray, the FBI director, said in a press release accompanying the Jan. 28 indictments. 

“Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.” 

Featured in Bloomberg Businessweek, Feb. 11, 2019.

If the new investigation bears fruit, it could, along with the indictments, bolster the Trump administration’s effort to block Huawei from selling equipment for fifth-generation, or 5G, wireless networks in the U.S. and allied nations. 

Huawei poses a national security threat because it could build undetectable backdoors into 5G hardware and software, allowing the Chinese government to spy on American communications and wage cyberwarfare. 

On the same day Wray’s statement was released, the government searched the Huawei lab in San Diego where Akhan’s glass had been sent. 

The FBI raid was a secret, but not to Khan and Shurboff, who’d been receiving regular briefings of the investigation’s progress through Akhan’s lawyer, Renato Mariotti, a well-known former prosecutor who’s now a partner at Thompson Coburn LLP. 

By then, they’d succeeded in getting Huawei representatives to admit, on tape, to breaking the contract with Akhan and, evidently, to violating U.S. export-control laws. 

Huawei did not respond to repeated requests for comment. 

This story is based on documents—including emails and text messages exchanged among Huawei, Akhan, and the FBI—as well as reporting from the sting operation in Las Vegas and interviews with Khan and Shurboff. 

Businessweek shared a detailed account of the investigation with the U.S. Attorney’s Office for the Eastern District of New York, which declined to comment. 

The FBI also declined to comment.
Khan’s work on diamond glass goes back to his college days, when he began learning about so-called nanodiamonds as a 19-year-old electrical engineering and physics student at the University of Illinois at Chicago. 

After graduation, he ran experiments at the Stanford Nanofabrication Facility and teamed up with researchers at the U.S. Department of Energy’s Argonne National Laboratory, eventually developing and patenting a way to deposit a thin coating of tiny diamonds on materials such as glass. 

He also licensed diamond-related patents for Akhan from the Argonne lab in 2014. 

By the following year, Khan was confident enough to start promoting his new technology. 

He joined the conference circuit, began giving interviews to trade publications, and hired Shurboff, who’d spent 25 years in various roles at Motorola Inc. 

It was time, Khan believed, to go to market.

Akhan founder and CEO Khan.

In the smartphone world, extra-strong display glass is a competitive advantage, like a fast processor or a really good camera. 

It’s been that way ever since Steve Jobs picked Corning to supply a screen for the first iPhone more than a decade ago. 

Reviewers marveled that the device could be shoved into a pocket full of keys and coins and its then-giant display would come out unscathed. 

To take on Corning, Akhan needed to convince the world’s big smartphone manufacturers—including Apple, Samsung, and Huawei—that its diamond-coated glass was even tougher than Gorilla Glass. 

In 2016, Shurboff began sending out samples from Akhan’s production facility in Gurnee, Ill., a Chicago suburb. 

He shipped the first one to Samsung; another early sample went to Huawei.
Even then, before Trump’s trade war and the indictments, the Huawei name carried plenty of baggage. 

In 2002, Cisco Systems Inc. accused Huawei of stealing source code for its routers. 

Motorola said in a 2010 lawsuit that Huawei had successfully turned some of its Chinese-born employees into informants. 

And in 2012 the U.S. House Intelligence Committee labeled Huawei a national security threat and urged the government and American businesses not to buy its products. 

The Cisco and Motorola lawsuits ended with settlements.
Since 2012, under pressure from the government, the major U.S. telecommunications companies have essentially blacklisted Huawei, refusing to carry its smartphones or use its equipment in their networks. 

But most of the world kept on buying from Huawei, choosing to ignore the allegations that the company has consistently denied. 

At the same time, U.S. tech companies have remained free to sell parts to Huawei. 

Qualcomm Inc. is one of Huawei’s big suppliers. 

So are Micron Technology Inc. and Intel Corp.
So there was nothing out of the ordinary when an email from Huawei came to Akhan on Aug. 8, 2016. 

The sender was Angel Han, a Huawei engineer in San Diego. 

In email exchanges and calls that followed, Han conveyed a sense of urgency. 

In one email on Nov. 7, 2016, Han said Huawei was “actively looking for new technologies for our innovative product in this fast pace [sic] consumer electronics industry,” according to a copy reviewed by Businessweek. 

“Vendor’s capability to move fast and deliver is also crucial for us.” 

Reached on a mobile phone number that appeared on text messages exchanged with Akhan, a woman who identified herself as Angel Han denied knowing anyone at Akhan; then, when she was presented with specific details about interactions with Akhan, she said, “I can’t recall.” 

Then she hung up.

Akhan COO Shurboff.

By February 2017, the two companies had a deal. 

Akhan would ship two samples of Miraj to Huawei in San Diego. 

According to a letter of intent, signed by both parties, Huawei promised to return any samples within 60 days and also to limit any tests it might perform to methods that wouldn’t cause damage. (The latter provision is standard in the industry and is designed to make it hard to reverse-engineer any intellectual property.) 

Shurboff noted in documents he sent to Han that Huawei had to comply with U.S. export laws, including provisions of the International Traffic in Arms Regulations, or ITAR, which govern the export of materials with defense applications. 

Diamond coatings are on the list because of their potential for use in laser weapons.
Khan and Shurboff decided early on that Akhan would license the first generation of its Miraj glass to a single handset maker, hoping the promise of exclusivity would give their startup some leverage. Huawei, Khan says, indicated it was eager to stay in the race, and on March 26, 2018, Akhan shipped an improved sample to Han. 

“We were very optimistic,” Khan says. 

“Having one of the top three smartphone manufacturers back you, at least on paper, is very attractive.”
The first sign of trouble came two months later, in May, when Huawei missed the deadline to return the sample. 

Shurboff says his emails to Han requesting its immediate return were ignored. 

The following month, Han wrote that Huawei had been performing “standard” tests on the sample and included a photo showing a big scratch on its surface. 

Finally, a package from Huawei showed up at Gurnee on Aug. 2.
Shurboff remembers opening it. 

It looked just like the package Akhan had sent months earlier. 

Inside the cardboard box was the usual protective packaging—air bags, plastic case, gel insert, and wax paper. 

But he could tell something was wrong when he picked up the case. 

It rattled. 

The unscratchable Miraj sample wasn’t just scratched; it was broken in two, and three shards of diamond glass were missing.
Shurboff says he knew there was no way the sample could have been damaged in shipping—all the pieces would still be there in the case. 

Instead, he believed that Huawei had tried to cut through the sample to gauge the thickness of its diamond film and to figure out how Akhan had engineered it. 

“My heart sank,” he says. 

“I thought, ‘Great, this multibillion-dollar company is coming after our technology. What are we going to do now?’”

The packaging for Akhan’s Miraj Diamond Glass.

Shurboff’s first call was to Khan. 

Then he went to the FBI, which had been cultivating relationships with even the smallest American tech companies as part of a crackdown on Chinese theft of intellectual property. 

Eight months earlier, in January 2018, a male FBI special agent in Chicago had paid a visit to Akhan in Gurnee. 

According to Shurboff, the agent told him that the bureau was hoping to educate local startups on cybercrime and security vulnerabilities and to encourage them to come forward with suspicious activity. 

The FBI specifically was trying to gather intelligence on Chinese efforts to obtain U.S. technology, the agent told Shurboff.
The conversation stuck in Shurboff’s mind. 

That August, two weeks after receiving the broken glass from Huawei, he drove down to the FBI’s Chicago field office, which was holding a seminar for area executives on corporate espionage. Shurboff watched as a female special agent discussed the case in which Huawei stole trade secrets from T-Mobile in 2012. 

During a break, Shurboff approached the agent and told her what had happened to Akhan. 

He mentioned that diamond coating was an ITAR-regulated material with defense applications and raised the possibility that the sample had been in the wrong hands. 

In addition to its work on smartphone glass, Akhan had been adapting its diamond technology for semiconductors and the military.

Shurboff

To many, Shurboff’s story might have sounded far-fetched. 

Not to the FBI. 

“They took a very keen interest immediately and wanted to know more,” he says. 

Things moved quickly. 

The Akhan executives found themselves on regular conference calls with officials from the FBI and the U.S. Department of Justice. 

Taking the lead on several of these calls was David Kessler, the assistant U.S. attorney in Brooklyn who, it turned out later, would prosecute Huawei’s CFO.
The two FBI agents picked up the broken sample in Gurnee and delivered it to the FBI’s research center in Quantico, Va. 

When Khan and Shurboff joined the group on a subsequent call, an FBI expert in forensic gemology briefed them on his findings. 

They recall the gemologist saying he’d analyzed the diamond glass sample and concluded that Huawei had blasted it with a 100-kilowatt laser, powerful enough to be used as a weapon.
Throughout the fall of 2018, the FBI agents asked Khan and Shurboff for emails, copies of non-disclosure agreements, letters of intent, shipping records, even the box Huawei used to return the sample that summer. 

The FBI had another request, too: Would they re-establish contact with Angel Han, the Huawei engineer?
On Dec. 10, while the FBI listened in, Shurboff and Khan say they spoke to Han by phone, quizzing her about the broken sample of diamond glass. 

What happened during the tests? 

Why were shards missing? 

Han told them she didn’t know, because the sample had been in China and was shipped directly to Akhan from there. 

This was a criminal violation of ITAR rules, but Han didn’t seem to realize or care. 

And instead of backing off, Han said Huawei wanted to continue talks about becoming Akhan’s first customer and proposed a face-to-face meeting a few weeks later at the Consumer Electronics Show in Las Vegas. 

She even offered to bring along a senior Huawei official from Shenzhen. 

Khan and Shurboff were flabbergasted. 

It was hard to tell who was playing whom.
The Akhan executives arrived in Las Vegas on Tuesday, Jan. 8, and checked in at the Mandalay Bay Resort & Casino. 

They’d arranged to meet Han and her colleague the following afternoon at 3 p.m. 

If all went according to plan, that would be the sting. 

The female FBI agent from Chicago, who’d flown in to oversee the operation, explained to Khan and Shurboff in text messages how it would work: The bureau was securing a room at the Las Vegas Convention Center, where the CES conference was taking place. 

It would be bugged, so the FBI could listen in from another location in the building. 

Shurboff brought signage to make it look like Akhan had rented the space.
At about noon on Jan. 9, the agent met with the Akhan executives and gave Shurboff three different covert recording devices to wear and carry as a backup plan. 

Shurboff texted Han: “We have a nice quiet conference room right off the Grand Hall if you like to meet there.” 

He noted it wasn’t far from the Huawei booth at CES. 

But at 2 p.m., Han responded by text, saying that she was at the Venetian Casino and couldn’t leave for at least another hour. 

That was a problem, because the FBI had the room for a limited time. 

Shurboff told Han to stay at the Venetian. 

He and Khan would meet her there.
They arrived just before 3 p.m. and texted Han a picture of their location, on the second floor of the Venetian by the escalator, right in front of Sin City Brewing. 

Khan was casually dressed in a dark peacoat, black button-up shirt, gray pants, and sneakers. Shurboff’s attire was more businesslike: a light blue dress shirt, gray sports jacket, black trousers, and brand-new leather shoes. 

Han showed up at 3:20 p.m. with a woman who introduced herself as Jennifer Lo, a senior supply manager with Huawei in Santa Clara, Calif. (The Shenzhen-based Huawei executive hadn’t come, they explained, because the company wasn’t allowing its senior Chinese executives to travel to the U.S.) 

The four of them chatted briefly, walked toward the food court at the Venetian, and took seats around a table at a Prime Burger. 

The Businessweek reporter watched from about 100 feet away, in front of a gelato stand. 

Khan and Shurboff had expected to conduct the sting in the safety and quiet of the FBI’s room at CES. 

Now, total rookies in the intelligence game, they had to remain calm while recording the conversation with Huawei in a noisy, crowded restaurant.
The hope had been that Lo, whom Khan guessed was in her early 40s, would have more to say about the destruction of Akhan’s sample and why Huawei was so interested in diamond film technology. Khan recalls her asking questions about the manufacturing capacity at Akhan’s pilot facility in Gurnee. 

She acknowledged that the sample glass had been to China but disputed that this had been an ITAR violation. 

Huawei had checked, and it was OK, she said. 

There was some tension, and at one point, Lo startled Khan and Shurboff by wondering aloud if the U.S. government was monitoring their meeting. 

As for the damaged sample, Lo, like Han, claimed ignorance. 

She was there to make sure Huawei still had a shot at being the first company to put diamond glass on a smartphone. 

If Akhan walked away, she said she might lose her job. (Reached on the mobile phone number on her Huawei business card, Lo confirmed her identity and said she was at CES to “meet with some suppliers.” When asked about the destruction of the sample and the shipment to China she said, “I’m not involved and cannot comment on this.”)
Over the next few days, Khan received an unsettling piece of news. 

During the Prime Burger meeting, Shurboff had coincidentally run into representatives from another big potential customer for Miraj glass. 

Feeling uneasy in his role as an FBI asset, he’d curtly brushed them off to return to the discussion with Huawei. 

Now the other customer seemed concerned that Akhan was trying to start a bidding war. 

Khan was determined not to lose a promising lead. 

Previously, he’d asked Businessweek to withhold the details of the sting operation until the government moved to indict Huawei or arrest someone. 

But, eager to explain the encounter at the Prime Burger and clear up any confusion, he’d changed his mind and decided to go public with Akhan’s story, as well as issue a statement about its cooperation with the FBI. 

“Akhan takes seriously any unlawful use of its technology,” an embargoed copy of the statement reads. 

The company, “will continue to cooperate with law enforcement and work towards an expedient resolution to this matter.”
The FBI raided Huawei’s San Diego facility on the morning of Jan. 28. 

That evening, the two special agents and Assistant U.S. Attorney Kessler briefed Khan and Shurboff by phone. 

The agents described the scope of the search warrant in vague terms and instructed Khan and Shurboff to have no further contact with Huawei.
Khan and Shurboff don’t know how the story will end. 

It’s possible that the government will conclude there aren’t grounds for an indictment against Huawei. 

Prosecutors also could decide that what happened to Akhan isn’t serious enough to seek charges. 

If that’s so, it raises a question about the broader U.S. crackdown on Huawei: Is it based on hard evidence of wrongdoing or driven by a desperation to catch the Chinese company doing something—anything—bad?
On the other hand, if the government does conclude that Akhan was attacked, that a Chinese multinational really did target a tiny Chicago company with no revenue and no customers (as of yet), it would show just how far and wide Huawei is willing to go to steal American trade secrets. 

“I think they’re identifying technologies that are key to their road map and going after them no matter what the size or scale or status of the business,” Khan says. 

“I wouldn’t say they’re discriminating.”