Senate Bill Targets Chinese Economic Espionage

New measure would give U.S. prosecutors power to indict hackers working abroad.
BY ELIAS GROLL

Sen. Dianne Feinstein (D-Calif.) walks with Sens. Kamala Harris (D-Calif.) and Mark Warner (D-Va.) to a Senate Select Committee on Intelligence closed-door meeting at the U.S. Capitol in Washington on April 27, 2017. 

A new Senate bill would expand the ability of American prosecutors to go after hackers abroad who attempt to steal trade secrets from U.S. firms, in the latest effort in Washington to crack down on Chinese economic espionage.
Under current law, the U.S. Justice Department is limited in its ability to bring charges of economic espionage against offenders abroad, and may only do so if the suspects are American citizens or permanent residents—or if an act to further the theft was committed in the United States.
A bill authored by Sen. Kamala Harris, a California Democrat, and set to be introduced Wednesday would loosen those requirements by amending the Economic Espionage Act. 

Harris’s bill would allow American prosecutors to bring charges of economic espionage against individuals operating abroad if the act of theft has a “substantial economic effect” in the United States.
That reform would expand the jurisdiction of American prosecutors to bring economic espionage charges against hackers and operatives who operate with scant respect for national borders.
“It is absolutely vital that our approach to combating economic espionage is grounded in a modern-day understanding of the tactics employed by foreign actors and that our laws provide a strong deterrent to committing these acts in the first place,” Harris said in a statement to Foreign Policy.
The bill would also increase the damages companies are able to seek from individuals or groups that break into their computer systems to carry out economic espionage. 

And it would extend the statute of limitations for such crimes and allow victims to bring civil suit against operatives working abroad.
Peter Harrell, a former State Department official and a fellow at the Center for a New American Security think tank, described the measure as a “useful step” in responding to Chinese economic espionage against the United States.
Deterring such espionage usually falls to the government, “but the U.S. also needs to make it easier for individual American companies that are victims of Chinese economic espionage to fight back,” Harrell said. 

“The threat of expanded damages could make the act more of a deterrent to Chinese hacking.”
American prosecutors have brought a series of indictments in recent months against Chinese operatives and intelligence officials alleged to have stolen U.S. intellectual property. 

But in those cases, authorities have typically relied on anti-hacking laws—as opposed to economic espionage statutes—to bring charges.
The bill comes amid escalating tensions between the United States and China over a wide-ranging campaign by Beijing’s operatives to steal U.S. trade secrets.
Speaking at an event in New York on Tuesday, Rob Joyce, a senior National Security Agency official, said Chinese hacking operations have grown more audacious in recent years. 

Xi Jinping's empty promises

In 2015, Barack Obama and Chinese dictator Xi Jinping pledged to halt hacking operations in support of economic espionage, but Beijing reneged on that agreement during the first two years of Donald Trump’s presidency.

U.S. prosecutors are expected to unveil a wide-ranging indictment this week targeting a well-known Chinese hacking group said to have targeted U.S. firms. 

American officials are also expected to levy sanctions against Chinese operatives involved in the scheme.
Multiple media outlets reported this week that Chinese intelligence was responsible for a breach of hotel giant Marriott International that affected some 500 million guests.
While American officials describe China as the most prolific user of economic espionage, other U.S. adversaries, including Russia and Iran, are thought to employ the tactic as well. 

“China is a player, but it’s not the only player in the game,” said a Senate aide familiar with the matter.
The bill could also have political benefits for Harris as Democratic politicians begin to position themselves for the 2020 presidential election. 

A former California attorney general, Harris is likely to seek her party’s nomination but would enter the race with relatively little foreign-policy experience.
By positioning herself as a champion of U.S. companies contending with Chinese economic espionage, Harris joins Sen. Elizabeth Warren, a Massachusetts Democrat, in signaling a hawkish approach toward Beijing. 

Warren, in a speech last month, argued that China is “using its economic might to bludgeon its way onto the world stage and offering a model in which economic gains legitimize oppression.”

Senate blocks ZTE deal in rebuke of Trump deal

The move comes less than a week after Trump entered into an agreement with telecom giant. 
By Leigh Ann Caldwell

In a major rebuke to Donald Trump, the Senate has adopted a measure that would block the administration's deal with Chinese telecom giant ZTE, pitting the president against Congress on what many senators say is an issue of national security.
The Senate's move comes less than a week after the administration struck an agreement with ZTE that would have kept the telecom company engaged in the U.S. market.

The president’s deal with ZTE would have forced the company to pay a $1 billion penalty, reorganize its company and allow U.S. compliance officers in exchange for being able to sell its products inside the U.S.
But the bipartisan senate amendment, which has been added to the must-pass National Defense Authorization Act, would essentially kill that agreement by retroactively reinstating financial penalties and continuing the prohibition on ZTE's ability to sell to the U.S. government.
Sen. Tom Cotton, R-Ark., who is one of the co-sponsors of the measure, said that the amendment would likely put ZTE out of business.
“ZTE said they couldn’t remain in business, or at least not remain anything other than a cell phone hand-held business, if the denial order from March was in effect. And this would essential put the denial order back into effect,” Cotton told reporters.
The telecom company is a mechanism for espionage by, in part, selling phones in the U.S. that can be tracked and enabled to steal intellectual property.
The U.S. slapped sanctions on ZTE in 2016, prohibiting the company from doing business in the U.S. for seven years, when it violated U.S. sanctions against Iran and North Korea. 
The Commerce Department placed additional sanctions on the company after it failed to follow through with its reorganization plan and lied to the U.S. government about it.
A bipartisan group of senators praised the amendment, saying it protects the U.S.’s national security.
“The fact that a bipartisan group of senators came together this quickly is a testament to how bad the Trump administration's ZTE deal is and how we will not shy away from holding the president's feet to the fire when it comes to keeping his promise to be tough on China,” Senate Democratic Leader Chuck Schumer said in a statement.
The amendment was added just as Commerce Secretary Wilbur Ross was on Capitol Hill briefing senators about a component of the president’s ZTE deal.
Sen. John Cornyn, R-Texas, left the meeting saying he was supportive of the Senate’s effort.
The NDAA still has to pass the Senate and the House of Representatives must still agree to the defense bill with the measure included before it can advance.
Trump would then face a choice: Veto a critical defense bill to save the ZTE deal or allow the administration's deal to collapse.
Sen. Cotton said the president won’t veto the bill “because the bill pertains many other critical priorities.”

Chinese fifth column: Sam Dastyari told to resign from Senate positions after China revelation

Bill Shorten confirms senator will step down over ‘mischaracterisation’ of comments he made supporting Beijing’s stance on the South China Sea
By Katharine Murphy 

Chinese fifth column in Australia

Australia’s Labor leader, Bill Shorten, has instructed his strife-prone senator Sam Dastyari to resign from his Senate positions in an attempt to minimise the political fallout from the senator’s dealings with Chinese figures.

Shorten released a statement early on Thursday confirming that Dastyari would step down from his Senate roles, which include a deputy whip and committee positions, because he had demonstrated a lack of judgment.
“It is not a decision I took lightly,” Shorten said. 

“I told Senator Dastyari that his mischaracterisation of how he came to make comments contradicting Labor policy made his position untenable.
“I also told him that while I accept his word that he never had, nor disclosed, any classified information, his handling of these matters showed a lack of judgment.”
Thursday’s development is a second strike for Dastyari. 

Shorten took the same action more than a year ago.
Dastyari resigned from frontbench positions last September when it was revealed that he had supported China’s aggressive posture in the South China Sea during a press conference flanked by Huang Xiangmo – a Sydney-based Chinese businessman who had, controversially, picked up one of his legal bills.
Over the past 24 hours, it has been revealed that Dastyari met privately with Huang and tipped him off that his phone was tapped by security agencies.
A recording subsequently emerged of the press conference in which Dastyari quite clearly contradicted Labor’s official position on the dispute in the South China Sea.
“The Chinese integrity of its borders is a matter for China, and the role that Australia should be playing as a friend is to know that we think several thousand years of history, thousands of years of history, when it is and isn’t our place to be involved,” Dastyari said in the recording.
While Dastyari had previously attempted to characterise his remarks as “silly” and “naive”, the remarks at the press conference were clearly expressed, and at odds with the official Labor policy position, which backed the Australian government’s stance supporting an international ruling against China in the permanent court of arbitration in The Hague.
In standing Dastyari down, Shorten said he was confident the accident-prone senator would “learn from this experience”.
Turnbull government ministers weren’t so confident. 

The defence minister, Marise Payne, pointed out that Dastyari had been through precisely this cycle before.
The prime minister, Malcolm Turnbull, declared that Dastyari’s position was untenable, and said he must resign from the Senate. 

“Sam Dastyari should get out of the Senate, full stop. That’s his duty”.
The attorney general, George Brandis, inferred on Wednesday that Dastyari was engaged in counter-surveillance activity, but on Thursday he said he wasn’t implying the behaviour was treasonous.
“I’m not saying it’s treason. What I’m saying is that Dastyari’s position on the basis of what we know is completely untenable,” the attorney general said.

Sam Dastyari : traitor or/and Beijing's running dog?

“We know Sam Dastyari took deliberate steps to undermine or subvert what he believed might be an intelligence investigation. We find this out 24 hours ago.”
Brandis said Dastyari had called a press conference “confined it to Chinese-language media … for the deliberate purpose of undermining the Labor party’s policy in relation to China”.
He pointed out that the senator’s comments at the press conference were a clear contradiction of Labor’s policy, articulated at the time by the shadow defence minister, Stephen Conroy.
While Dastyari said Australia’s stance on China’s territorial interests in the South China Sea should be hands off, Conroy said Labor should send a message against aggression by conducting freedom of navigation exercises in the South China Sea.
“What is a politician, by the way, doing holding a press conference at the behest of his major donor, who is almost literally pulling the strings,” Brandis said Thursday.

“And then we also know that on several occasions subsequently he lied about what he had said about the press conference. Rather that a few mumbled words, we now know these were deliberate, scripted, concerted remarks and their … purpose was to send a message through the Chinese media that were a Labor government to have been elected, its foreign policy in relation to China would be at variance from what had been announced by the Labor shadow minister, Senator Conroy.”
Later, in the Senate, Brandis said many senators had been felled in the rolling citizenship debacle over recent months “for a technical reason, unbeknownst to them, they were deemed to owe allegiance or acknowledgement to a foreign sovereign”.
“And meanwhile, sitting in the Senate in a senior position in the Labor party, there sat Senator Dastyari, who evidently ... by his conduct, was actually under a foreign influence – actually under a foreign influence, but he kept quiet, he stayed mum, he maintained his position, until his position was exposed by the media in the last 24 hours or so and now he has been forced to resign. Again.”
A clearly emotional Dastyari told the Senate on Thursday morning he was a proud Australian and he found “the inferences that I’m anything but a patriotic Australian deeply hurtful”.

His Chinese Master's Voice

The senator said he had never been given any advice by a security agency, and if he had been given advice, he would “follow it to the letter”.
“I want to be absolutely clear, I could not be a prouder Australian,” he said. 

“My family was lucky enough to leave a war-torn Iran to start a new life in this amazing land. I find the inferences that I’m anything but a patriotic Australian deeply hurtful.”
He acknowledged he had done the wrong thing by holding a press conference and departing from Labor’s position on the South China Sea. 

“The price I paid for that was high but appropriate.”
Dastyari said he had been “shocked” by the press conference audio because “it did not match my recollection of events”.
He said his intention was to go on working for the people of New South Wales.