“You’re not going to do 125 cases in a year as a U.S. attorney’s office,” Demers said. “You’re going to do maybe one, which would be great. If you do two, that’s very impressive. If you do none, that’s understandable and you’ll get there next year.”
The cases can be complex and time-consuming, Demers said. But he doesn’t want U.S. attorneys to see that as a hindrance.
“These cases take time, they sometimes involve classified evidence, which can complicate both the investigation and later the prosecution and how you charge the case,” he said. “But we wanted to signal to the U.S. attorneys that we understood that, and nonetheless we wanted them to focus their resources on this and that we were going to approve these charges and we wanted them to move forward.”
Cases have materialized all around the country — and not just in high-tech power centers where intellectual property theft is a constant issue.
Last month in West Virginia, for instance, a former West Virginia University professor pleaded guilty to fraud. According to the charging document, he asked the university to give him time off so he could care for his newborn. But instead, he secretly used the time to work in China as part of its Thousand Talents Plan, an effort by the Beijing government to recruit and draw talented researchers to China that U.S. officials say is thinly disguised economic espionage.
William Powell, the U.S. attorney whose office is handling the West Virginia case, didn’t discuss it as the defendant is awaiting sentencing. But he said that at least half the time his office has spent on the China Initiative, as DOJ officials call the anti-espionage push, has been in outreach to industry and academia.
“We’re not attacking universities,” Powell said. “These things are often very sophisticated, without university knowledge or other industry knowledge. So we’re just trying to get through it together.”
That outreach can move in both directions. Andrew Lelling, the U.S. attorney for Massachusetts, said university officials have grown forthcoming with investigative tips as they’ve built relationships with law enforcement.
“You get leads sometimes from the universities themselves, if they have a good working relationship with us and with the FBI,” he said. “A big component of the China Initiative is outreach.”
He compared the department’s efforts with its outreach to Muslim-American communities after the Sep. 11 attacks.
“There’s two reasons you’re doing the outreach: One is so that people see that government actors really aren’t jackbooted thugs, and we actually do think about what we do and try to take a nuanced approach,” he said. “And also so that the entities you’re talking to maybe are a little more willing to pick up the phone next time and tell you if they’re aware of a problem.”
The China Initiative has spawned a cottage industry of lawyers specialized in defending its targets. The firm Dorsey & Whitney, for instance, has set up a task force specifically focused on China Initiative cases. Catherine Pan-Giordano, a key member of that task force, said the department’s increased outreach to academia is welcome. But she said it should have come sooner, and that the Initiative has targeted professors acting in good faith who just didn’t understand the rules for applying for government grants.
“If you’re a scientist, you are not probably that much into paperwork and you don’t really fully understand the rules,” she said. “You’re doing your best to disclose, but you didn’t get training from universities or federal agencies, you get very limited training, and you’re doing your best to comply.”
And George Varghese, who worked as a prosecutor in the Massachusetts U.S. attorney’s office until last year and is now a partner at WilmerHale, said the China Initiative has made some of his clients in academia rethink their overall approach to working with foreign partners.
Varghese has more detailed insight than most; before leaving the DOJ, he worked on the case against Charles Lieber, a prominent Harvard professor arrested and charged in January with lying to U.S. government officials about Chinese funding for his research. Lieber claimed he had never been part of China’s Thousand Talents Plan and had no formal association with the Wuhan University of Technology, when actually — per the Justice Department charging document — he had signed a three-year contract to work with the Chinese university. The contract had the university pay the professor $50,000 per month, with more money for living expenses and to set up a research lab in China, according to the Justice Department.
Lieber’s arrest drew national attention. And it highlighted the Justice Department’s aggressive posture toward academics who don’t disclose foreign government funding when seeking grants from the U.S. government — or who lie about those funds. That case and others have caused something of a sea change in college administrators’ views on cooperation with foreign entities, per lawyers who work with them.
“Part of it is just dealing with, ‘What should our policy and procedures be about this?’” Varghese said. “‘Should we allow for foreign academic collaboration?’”
“It’s a real change for academic institutions, where there’s an open collaboration ethos,” he continued. “I think that’s been the biggest shift for them, this cultural change. Collaboration was always thought to be a good thing in academia.”
Senior department leaders said they welcome increased circumspection from academics. And they argue that the initiative has helped higher ed see the light on Chinese influence.
“I think it’s actually gone better than we initially expected,” said Richard Donoghue, U.S. attorney for the Eastern District of New York and a member of the Initiative’s steering committee. “I do think there are a lot of people in academia who were initially skeptical, but when they see the cases that have been brought and when we explain to them what the Chinese government is doing to try to manipulate these relations and steal intellectual property, I think it really opens their eyes.”
DOJ started the Initiative because of concerns about economic espionage, Demers said — in other words, concerns about Chinese government efforts to steal immensely valuable intellectual property from American companies.
“The initiative grew organically out of the regular intelligence briefings that then-Attorney General [Jeff] Sessions and I were having with the bureau,” said Demers, referring to the FBI. “In those briefings, which have intelligence from the bureau but obviously from the other intelligence community agencies as well, we were just, over time, remarking on how much was in there about Chinese theft of intellectual property and how that was obviously different in kind from the other intelligence we were reading every day, which was the more traditional intelligence about government-to-government espionage and planning and policy initiatives. So it really came from that, and the attorney general’s question to me was, what can we do about it?”
A year and a half ago, on Nov. 1, 2018, Sessions announced the project. Six days later, right after the midterm elections, Trump fired him. But the work continued without any apparent hiccups, and Attorney General William Barr has been a vocal proponent.
Since its inception, the project has targeted a host of Chinese government officials. In February, it charged four members of its military with hacking Equifax and stealing information about 145 million Americans. Barr announced the charges — highlighting the case’s importance to the DOJ brass.
“This was an organized and remarkably brazen criminal heist of sensitive information of nearly half of all Americans, as well as the hard work and intellectual property of an American company, by a unit of the Chinese military,” Barr said at the time.
Reached for comment on this story, a spokesperson for the Chinese Embassy in Washington pointed to a comment from the spokesperson for the country’s Ministry of Foreign Affairs, which called U.S. allegations of intellectual property theft „groundless accusations and malicious slanders.“
DOJ has brought numerous cases against a variety of targets as part of the Initiative, including researchers, professors, U.S. intelligence officials and Chinese nationals working in the U.S.
The department has said that 80 percent of all economic espionage cases allege activity that benefits China. Some of the dollar figures involved are eye-popping; in February, for instance, a scientist got a two-year prison sentence for stealing trade secrets from a U.S. petroleum company valued at $1 billion, per a DOJ release.
“They’ve made it clear: If they can’t develop it, they’re going to steal it,” Jay Town, U.S. attorney for the Northern District of Alabama and a member of the steering committee supervising the initiative, said of China.
U.S. attorneys said the novel coronavirus pandemic, which has constrained the efforts of workplaces around the country, hasn’t substantially hindered their efforts to develop cases.
“It really hasn’t slowed the progress of the investigations or prosecutions,” Donoghue said. “I think our people have adapted pretty well to this new working model. I don’t see it having a short- or a long-term impact on the China Initiative.”
But, Town said, the pandemic has limited his office’s outreach to industry and academia for the time being.
“You can’t get a bunch of people in a boardroom,” he said. “That’s all on hold. This stuff can’t be done by just sending emails back and forth or forwarding a PowerPoint.“
Source: politico.com
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