Why Trump’s anti-spy ‘China Initiative’ is unraveling

WASHINGTON —  After conducting days of surveillance, performing DNA tests on a hard drive that was fished out of a dumpster, and searching through personal emails, FBI officials became convinced that visiting UCLA researcher Guan Lei belonged to the Chinese military and might be stealing American industrial secrets.

They couldn’t nail down evidence of espionage but secured an indictment against Guan for allegedly lying about having secret ties to the People’s Liberation Army. He was charged with visa fraud, making false statements and destroying evidence.

For more than eight months, the 30-year-old computer science graduate student sat in a cell at Metropolitan Detention Center in downtown Los Angeles awaiting trial.

But in a sudden turnaround in late July, U.S. authorities summarily dismissed all charges. The Justice Department gave no explanation, issuing a brief statement that it had reevaluated the case, along with several others, and determined that “it is now in the interest of justice” to drop the matter.

Guan’s was one of five similar prosecutions against Chinese researchers — all but one in California — that were dropped over a two-day period in July. Earlier in the month, Justice officials dismissed charges against a Chinese American researcher in Cleveland accused of failing to disclose his affiliation with a Chinese university from which he had received funding.

And this month, a federal judge acquitted Anming Hu, a Chinese Canadian engineering professor in Tennessee, of charges stemming from allegations that he hid his joint academic appointment in China in obtaining research funding from NASA.

All seven failed prosecutions were part of the so-called China Initiative, a sweeping program launched in November 2018 under the Trump administration to counter theft of trade secrets, hacking and economic espionage.

Michael German, a former FBI agent who serves as a fellow for the Brennan Center for Justice’s Liberty & National Security Program, said the recent dismissals revealed how weak many of the cases were.

“Obviously, the FBI and Justice Department are under pressure to produce indictments against people with a so-called ‘nexus to China’ to match the political rhetoric sensationalizing the espionage threat from the Chinese government,” he said. “Even FBI analysts appear to have felt the investigators’ effort to connect these defendants to the Chinese military was overwrought.”

So what went wrong?

The problem was, and remains, serious. China’s history of stealing manufacturing secrets and other valuable information that U.S. companies spent millions of dollars to develop has been a significant spur to the virtual cold war that has developed between Washington and Beijing. It has put increasing pressure on government officials to do more to stanch the flow.

Although much remains unknown about the Trump-era campaign, it appears that a major problem was its decision to focus on Chinese nationals and Chinese Americans working in major U.S. research universities.

Not only did that approach fail to turn up persuasive evidence of spying — most of the charges involved making false statements to government authorities, or tax and visa fraud — but the emphasis on going after a small number of individuals for academic fraud seemed too small-scale to make a dent in a massive problem — the equivalent of trying to win the war on drugs by rounding up a handful of street dealers.

“What I see from the outside is that the bureau [FBI] and the Department of Justice have almost routinely pursued cases for something other than economic espionage, so they’re not contributing that much to the wealth of information of what China is trying to do. Nor are they pursuing cases with the biggest bite,” said Mark Allen Cohen, a former senior intellectual property attaché at the U.S. Embassy in Beijing and now senior fellow at the Berkeley Center for Law and Technology.

Moreover, the FBI’s tactics struck many Asian Americans as heavy-handed and discriminatory. The campaign came at a time when Asian Americans across the country were under attack with hate crimes.

Defending the program, FBI Director Christopher A. Wray warned that Beijing, in its effort to overtake the U.S. economy, had resorted to industrial espionage using “non-traditional collectors” such as researchers and graduate students.

He told a China Initiative conference last year that the FBI had about 1,000 investigations involving China’s attempt to steal U.S.-based technology. In April, the director testified before Congress that the bureau had about 2,000 open cases of economic espionage that “tie back to the Chinese government,” representing a 1,300% increase over the last few years.

But in the nearly three years since the program’s launch, the China Initiative has brought just 12 prosecutions of people at academic institutions and has won convictions of four individuals, according to Justice Department statistics provided to the Los Angeles Times.

In none of those four cases did the government provide evidence of economic espionage or theft of trade secrets or intellectual property.

Apart from the university cases, Justice officials have obtained four convictions or guilty pleas out of 16 prosecutions involving economic espionage and trade-secret theft matters since November 2018.

Various U.S. lawmakers, academics and rights groups have called for an end to the initiative. They say the program has cast unfair suspicion on people of Chinese and Asian descent and contributed to racial profiling on campuses, chilled international research collaboration and, in the case of Hu and a number of others, ruined careers and personal lives.

“I think that they are just set on their desire to find spies,” said Rep. Judy Chu (D-Monterey Park), who as chair of the Congressional Asian Pacific American Caucus has raised concerns to President Biden.

Justice officials have said the U.S. government needs to be aggressive in countering the serious economic threat posed by China.

In a statement attributed to spokesman Wyn Hornbuckle, the department said it was taking seriously the problem of rising hate crimes targeting Asians in America and was working with communities to improve its efforts.

Biden has said nothing specifically about the China Initiative.

In a letter to U.S. Atty. Gen. Merrick Garland in July, Rep. Ted Lieu (D-Torrance) and 90 other members of Congress asked for an investigation into the wrongful targeting of people of Asian descent, and for an update on departmentwide implicit bias training that was mandated in 2016.

“I wonder if the China Initiative is simply another manifestation of discrimination we’ve seen against Asian Americans” in U.S. history, he said, recalling the Chinese Exclusion Act of 1882, the internment of Japanese Americans during World War II and other incidents. Others say the initiative has echoes of the scrutiny on Muslim Americans after 9/11.

Daniel Olmos, a Silicon Valley trial attorney who worked on the first economic espionage case of a Chinese American to go to jury trial, said that he had seen a dramatic increase in the number of Chinese-born professors and research fellows who had been targeted and that he himself had counseled as many as 10 of them. In almost all of those cases, he said, the individuals have been fired or pressured to leave.

“I just think it’s a shakedown, and the endgame appears to be to get them fired,” Olmos said of the China Initiative’s efforts at universities.

The Justice Department’s move to dismiss charges against Guan and four others came after internal reports by FBI analysts noted that Chinese citizens could be affiliated with the People’s Liberation Army’s civilian service and that, in itself, “remains an unreliable indicator of nefarious obfuscation of one’s military affiliations, and even less of an indicator of technology transfer activity.”

In Guan’s case, FBI agents built their case after learning that he had received a scholarship linked to the People’s Liberation Army and uncovered photos of his university advisor in China in full military uniform.

In a late-night interview, agents repeatedly pressed Guan when he said he wore a green uniform for about a month of military training for students at his school, the National University of Defense Technology, according to an FBI interview transcript.

At UCLA, Guan worked in a lab supervised by then-math professor Wotao Yin, who told the FBI that Guan did not work on any U.S. government-funded projects and that there wasn’t any research worth taking.

“Guan wrote code, always from public data sets. … Guan’s code was the most advanced, if anything people would steal Guan’s code and not the code made by others,” Yin said, according to FBI interview notes.

Guan, who insisted he had no ties to the Chinese military, was at once surprised and relieved when he was freed. But before returning home, he filed with the court a response to the government’s dismissal motion.

“It’s truly a terrible experience for me,” he said.

Times staff writer Del Quentin Wilber in Washington contributed to this report.