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[Photo credit: UCA] For the first time, a national audience of Chinese Americans heard responses directly from a high ranking FBI counterintelligence official, together with a panel of experts around concerns that they were being profiled by the FBI for economic espionage and related crimes. The plenary session, titled “Chinese Americans:  Entangled in the U.S.-China Conflict,” was organized and moderated by Aryani Ong, a former civil rights attorney and advocate, for the United Chinese Americans (UCA) at its second annual national convention on Arlington Virginia, on September 28, 2018.   Speakers were Charles McGonigal, then-Special Agent in Charge of the country’s largest FBI counterintelligence division in New York City, Peter Mattis, a former CIA counterintelligence analyst, Mark Zaid, a defense attorney specializing in national security, and Cathy Peng, CEO of ROCS Global, a “top talent” recruitment company.  Around 500 people attended the convention.

 

The panel was significant because concerns within the Chinese American community had been building for three years since the period between 2014 and 2015 when the media released news in rapid succession about the espionage-related cases involving  Xiaorong Wang,  Guoqing Cao and Shuyu “Dan” Li,  Sherry Chen, and Dr. Xiaoxing Xi.  Notably, the criminal charges in all the cases were dropped.  Compared to the nearly 192 espionage-related cases for which data is publicly available, these number of cases are small.  At the same time, the unanswered questions arising from the cases were troubling. Why did it appear that scientists with similar ethnic backgrounds were targeted?  They are naturalized U.S. citizens. Were they still perceived to be disloyal?  Do Chinese immigrants incur risks by maintaining connections to family, friends and colleagues in mainland China?

 

The Chinese American community heard the news of damages to the scientists’ careers and reputations, and the hundreds of thousands of dollars in legal fees that they had to raise to prove that they were innocent.  The government’s silence about the reasons underlying the charges fueled speculation.  Chinese Americans worried, “If this could happen to them, could it happen to me?”

 

The concerns reached Capitol Hill.  Rep. Judy Chu, Mike Honda, Ted Lieu and Grace Meng of the Congressional Asian Pacific American Caucus (CAPAC) started taking action in 2015.  Together with  community leaders across the country, they sent multiple letters, called for meetings and held press conferences requesting the U.S. Departments of Justice and Commerce and the FBI to release more information about the cases and related matters.  However, the government did not offer meaningful information.

 

 

An Overview: Economic Espionage

 

 

Aryani Ong gave an overview of the broader environment in which the FBI investigations are triggered.  She spoke about rising U.S.-China tensions, China’s share (50-80%) of worldwide intellectual property theft, and sensitive technologies that the U.S. government identified foreign intelligence being most interested in acquiring.   Aryani Ong highlighted the significance of the Economic Espionage Act of 1996 (EEA).  Under the new law, the U.S. government became empowered to bring federal criminal charges against persons who committed trade secret theft. Trade secret theft occurs when the person implicated knows that they are bringing harm to a third party or will benefit a foreign government.  Previously, trade secret theft involved state civil charges.  Also, she asked the FBI agent to communicate that it treats economic espionage as significantly as classic (or traditional) espionage.

 

Aryani Ong then laid the foundation to discuss ethnic profiling concerns.  She held up a white paper written by legal scholar Andrew Kim, and released by Committee of 100 in May 2017.   “Prosecuting Chinese ‘Spies’: An Empirical Analysis of the Economic Espionage Act” reported that the number of EEA cases involving Chinese nationals or Chinese Americans tripled from the period of 1996-2007 (17% of all defendants) to the period 2008-2015 (52% of all defendants).  Suggesting a rush to prosecution, the report pointed out that 1 in 5 persons with Chinese names and who were charged later were not found guilty.  Of those remaining who were found guilty, they received sentences that were twice as long (25 months) as the average sentence for persons with Western names (11 months).

 

Top FBI Counterintelligence Head: FBI Follows The Evidence, Denies Profiling

 

Charles McGonigal drew the main focus on the panel.  He emphatically denied that the FBI is engaged in profiling of Chinese Americans based on ethnicity or race.

 

“We treat every case equally that comes into the FBI. … Never once did I take an allegation, and look and say, Oh, this is from China.  [I do not think that] we have to [invest] resources…treat this differently…pad the statistics to make sure that … the American public know that we were doing something.  My colleagues at the FBI did not care if the allegations were the French, Germans, Japanese, [or from] China, Russia, Iran or North Korea,” he said.

 

Mark Zaid weighed in on the issue of profiling based on 25 years as an attorney bringing lawsuits against the federal government, including the FBI.

 

“I don’t see as a general rule in the U.S. government any type of directed bias [toward Chinese Americans],” Mark Zaid said. What the U.S. government does do is assign a national security threat level to a foreign country, he said.  The risk follows the country.  Therefore, Mark Zaid’s clients seeking a security clearance faces challenges if those clients have ties to a country deemed to be a national security risk to the U.S.  The client is then pinned with that same risk.

 

In Mark Zaid’s view, the lack of personal animus means that there is no discrimination.  (Author’s note: at the same time, civil rights law also recognizes discrimination if protected characteristics like race, ethnicity and national origin are factored into employment decision making and motivate an employer to treat an employee differently than other employees. Furthermore, civil rights law protects against national origin discrimination, or different treatment because a person comes from a different country.)

 

However, he does see how easily U.S. government agents can slip into biased views if they are not aware of different cultural norms.   Mark Zaid advised the U.S. government to educate themselves about cultural and religious minorities and do outreach to their communities.  He also advised communities to “go against what you would normally feel is the suspicion against law enforcement and instead cooperate more in terms of educating law enforcement.”

 

Is The FBI Investigating More Or Is China Spying More?

 

Charles McGonigal reported that the FBI starts an investigation when the victims – often companies – report that intellectual property (IP) has been stolen.  When asked why the targets are often ethnic Chinese, he said, “since 2000, we have seen a spike in the economic theft by the Chinese government.”

 

China is “by far the most aggressive in its attempts to acquire intellectual property,” Charles McGonigal said.  (The IP Commission Report (2013) corroborates that China is the source of 50% – 80% of all intellectual property (IP) theft in the world.)

 

Peter Mattis said that the reason “why there’s so many PRC related economic espionage cases and technology transfer and export control violations is simply because the state links are easier to see.”  To illustrate, he spoke about China’s former President Hu Jintao giving multiple speeches about food security.  In a separate occasion, Hu Jintao also named the leading company providing food security, or Beijing Dabeinong Technology Group (DBN).  The same company became involved in a well-known case where the FBI stopped officials from DBN’s subsidiary from leaving the U.S. with more than 44 bags of stolen corn seeds stashed in the pockets of all their clothes, suitcases and under car seats at the border.  The seeds were proprietary, representing 100 years of development and millions of dollars in research to create hybrid, genetically modified corn.  China is running out of farmable land, and relying on the U.S. for 94 percent of its corn.  On its own, China would not be able to meet domestic demand.  Dupont Pioneer and Monsanto, on the other hand, owned 45 percent of hybrid corn seed.  The stolen seeds came from these two U.S. companies and LG Seeds.  Think about “what these companies are doing – how they link into a Five-Year Plan, how they are link into the Thousand Talents Program, or the different high-tech organization programs,” Peter Mattis said.

 

Economic Espionage Outpaces Classic Espionage, Poses A Serious National Threat

 

In Charles McGonigal’s view, economic espionage (theft of intellectual property primarily held by private entities) is as important as traditional espionage (theft of classified information held by government agencies).  If U.S. intellectual property is not protected, he said, then U.S. companies contact Congress and the FBI.  The U.S. companies are accountable to shareholders, and cannot stay in business if they repeatedly lose IP.

 

On a national scale, if such theft were allowed to continue, Charles McGonigal said that the economy would suffer.  Americans would lose jobs, creating a national security risk.  (The FBI agent was not alone in his views.  In a key document called the National Security Strategy (December 2017), the U.S. government identified China as among the leading four countries posing a threat.  The others were Russia, Iran, North Korea.) Charles McGonigal also said that the FBI is aware that China plans to be the center of technology innovation by 2049 – a feat that he said China could not do alone.

 

FBI Director Christopher Wray Comments On The

“Whole-Of-Society” Threat

 

Earlier in spring 2018, FBI Director Christopher Wray testified before a congressional hearing when he warned that China poses a “whole-of-society” threat, and called a “whole-of-society” response by the U.S.   Chinese American community leaders quickly responded, and asked Director Wray for a meeting, and explain.  What did Wray mean?  Would ordinary Americans feel that it was their duty to cast suspicions on the vast majority of innocent Chinese Americans?

 

Shedding light on the matter, Peter Mattis said, “Director Wray was quoting from a speech that [China’s President] Xi Jinping gave last year … Xi said that ‘We must mobilize a whole-of-society [italics added] effort to pursue the great rejuvenation of the Chinese nation.’”   The speech refers to the president’s vision to double China’s per capita GDP and to multiply the size of its economy.  Giving further interpretation, he said, “[The Xi policy statement] means that it’s not just about espionage. … It’s about mobilizing diaspora communities. … It’s about control of external propaganda, shaping Chinese language media abroad. … incentiviz[ing] cooperation.”

 

In a similar vein, Charles McGonigal said his interpretation of FBI Director Christopher Wray’s comment was that “Chinese government will use any means possible to collect and to ascertain information.”  Charles McGonigal did not interpret the comment to mean that every Asian American was engaged in espionage.

 

FBI Errs, Grows As An Organization And Builds Cultural Competency

 

When asked about apparent shortcomings with the investigations and prosecutions of the Dr. Wen Ho Lee case (which the speaker took a limited role on an FBI task force) and Dr. Xiaoxing Xi case, Charles McGonigal declined to comment.  However, he acknowledged generally that the FBI makes mistakes. He said that the FBI continually reviews its past investigations to draw lessons learned.

To illustrate, Charles McGonigal said that at the time of 9/11, the FBI’s counterintelligence division was 1/10 the size that it is today.  The agency has grown, and simultaneously had to learn about religious and cultural minorities. To learn more about diverse communities, he made public appearances.  Previously, he would not have done so because he has a sensitive role in counterintelligence.  Now, Charles McGonigal strongly believes that the FBI and the community need to grow together.  He urged that they meet more often without further delay.

 

“Understand what the Chinese intelligence services are doing, how they are operating, and what they are asking individuals to do,” he urged.  “Feel comfortable in contacting the FBI and know that you are not going to be persecuted simply because of your ethnic background.”

 

Charles McGonigal confirmed that the FBI offers trainings to its employees on cultures and religions.  He also said that the 4% of the FBI’s workforce (agents included) is Asian American – a number that he said the FBI would like to increase since it falls short of the 6% of the total population that Asian Americans represent.  Charles McGonigal also urged Chinese Americans to apply for jobs at the FBI.  Finally, he said that previous FBI directors created and worked with an Asian American employees’ group to help the directors understand the concerns of the Asian American community and relay messages.

 

Are Chinese Americans Unwitting “Nontraditional Collectors”?

 

Aryani Ong recalled that during the Dr. Wen Ho Lee case in the late 1990’s, Dr. Paul Moore, a former FBI analyst, promoted the Thousand Grains of Sand theory. According to Moore, the Chinese government was recruiting masses of people, including ordinary Chinese Americans, to collect small pieces of information that it would later assemble into a whole, larger design.  The people giving the information may not even have been aware of their role.  Many in the Chinese American community reacted negatively to the theory because they believed that it unfairly placed them under a cloud of suspicion.

 

Peter Mattis said that the theory was flawed.  Citing history dating back to 1927, he said that China always has relied on professional, not “nontraditional collectors” (or amateur spies).  Further, “the focus was not on Chinese Americans,” he said, at least during the periods between the 1970s to 1990s.

 

When asked, Charles McGonigal said that the FBI is “not using [the theory] as a principal means by which the FBI conducts an investigation.”

 

National Security Is All About Mitigating Risk

 

Mark Zaid shared his perceptions of certain behaviors or actions that the U.S. agencies involved in national security consider in their risk assessments of federal employees or contractors, and/or recipients of federal funding.  (While the FBI and CIA are the commonly known agencies, a total of 17 agencies comprise the intelligence community.) Generally, these are people who handle classified information, thereby requiring them to obtain or maintain security clearances to do their jobs.  He said that none of the behaviors or actions he described are by themselves security threats to the U.S.  However, they support the connections that a foreign government can use to “leverage over you. … They [foreign government]  can threaten your family members or you when you visit there, that they can potentially take your bank accounts or real estate property.”

 

“Everything in the [national] security world is about mitigation [of risks], he said. To minimize those risks, Mark Zaid offered the following strategies:

 

• Minimize contacts with foreign nationals, including family and friends
• Reduce travel abroad
• Transfer overseas inheritance to siblings
• Refrain from discussing work or security clearance level with family overseas
• Demonstrate integration in American society

 

On the last point related to signs of integration, Mark Zaid spoke about a South Korean American client who hung a photo of former president Bush and American flags in his office.   Also, Mark Zaid mentioned data points such as the visual cues inside a person’s home.  “Is it like going to see a city or town in India: Do I smell Indian food?  Or do I see a normal American home?” he said.

 

“Not teaching your kids your native language, which is terrible, but again is something to again show to the U.S. government that you were not trying to engage in perpetuating your foreign ideology or loyalty,” he continued.   It’s a very dual edged sword, and I imagine most people who work in the national security community are conflicted by this.  But unfortunately, it’s the reality of where the system is at the moment.”

 

Mark Zaid remarks stirred controversy within the audience members, who later debated whether he was giving out his own advice or speaking to actual practices from the national security community.   “If we cannot be who we are, what is the point of living?  [We want to] celebrate our heritage and be very proud,” a commentator wrote during a WeChat discussion on the matter.

 

Days after the panel, Charles McGonigal’s FBI office also reached out to the moderator in response to these specific statements to make clear that the FBI does not abide by the same views.

 

“In the U.S. we welcome persons of all ethnic and cultural backgrounds. Our country was founded on this principle and benefits every day from diversity not only in languages but in customs as well. No one should be made to feel their heritage or native language would somehow undermine their value to this great country,” Charles McGonigal said.

 

While troubling, the risk mitigation tactics may provide a hint at the mindset of some corners within the national security community, who generally are shielded from the public.  Further, the need for cultural competency training and increased workforce diversity.

 

A bigger challenge, however, may stand in the way in getting the national security community to recognize that America’s “new normal” is the diverse cultures, languages and traditions of its population.

 

The U.S. government has been “walking on eggshells” since the infamous cases of Edward Snowden, Chelsea Manning and Aaron Alexis, according to Mark Zaid. The three individuals were federal employees and contractors who held security clearances.  Edward Snowden and Chelsea Manning leaked unprecedented numbers of classified information and Aaron Alexis carried out a mass shooting killing 12 people at a militaryheadquarters. The notoriety of these crimes also brought the U.S. government’s security clearance process under intense scrutiny.

 

In response, the U.S. government rolled out the “insider threat program” in 2017 for implementation across federal agencies.  The program’s goalis to deter, detect and mitigate “inside” risks posted by federal employees and contractors who have access and handle classified information held by U.S. agencies. At the same time, he said that the program has induced people to raise suspicion over innocent matters.

 

Consequently, any potential threat – even if it had a miniscule .0000001 chance  – is a threat.  The orientation  “means that the U.S. would rather have 99 innocent people lose their security clearance, than the one guilty person be able to disclose classified information,” Mark Zaid said.

 

How To Navigate A Career When You Are Recruited By Both The U.S. Or China?

 

Cathy Peng sees fierce competition for top talent among scientists, engineers and technical professionals by major U.S. and Chinese corporations such as Google, Facebook, Alibaba and Tencent.

 

“U.S. and China are so much integrated. … Very often we see talents get multiple offers from U.S. and China,” Cathy Peng said.

She commented that with opportunities comes with challenges.  Prior to the panel, Cathy Peng said that many Chinese Americans faced a glass ceiling, giving them four choices:

 

1. Stay with the current U.S. company
2. Join a Chinese company
3. Start their own company with either U.S or Chinese investments
4. Follow incentives provided to top talent by Chinese recruitment programs

 

The challenges that Cathy Peng infers deals with the middle place in which Chinese Americans are caught.  Both the U.S. and China are seeking economic dominance, based on the technology innovation.  Understandably, many Chinese Americans – particularly first-generation immigrants – want to freely parlay their language skills, connections and knowledge of China to hopscotch between the two countries depending on the best opportunities available.  But given the tense relations between the U.S. and China, Chinese Americans working in sensitive technologies run the risk of drawing suspicion by the U.S. government.

 

How will Chinese Americans navigate the future?  Cathy Peng called on the UCA audience to “educate our community and help each other and protect our rights.  We want to be treated as Americans.  We are very proud.  We have contributed so much to this country, and we have earned it,” she said.

 

How Does The FBI Evaluate Cases Involving Science and Technology?

 

Dr. Xiaoxing Xi became a cause célèbre after he was erroneously accused by federal prosecutors of sending proprietary information about a device to China.  While he was charged with wire fraud, the news media portrayed him as a spy.  The charges were dropped only after Dr. Xi provided expert testimonies to prove that investigators had mistaken the technology. Dr. Xi had sent unrestricted technology information on a different device that he had helped to invent.

 

Referring to the Dr. Xi case, Aryani Ong asked Charles McGonigal whether the FBI retained science experts. Charles McGonigal replied that the FBI goes back to the victim company who alleges the trade secret theft since the company, not the FBI, holds the expertise.

 

Sharing his thought process, Charles McGonigal said that he asks the following questions before starting an investigation:

 

• Is the information a trade secret?
• How long has the information been a trade secret?
• Who developed the trade secret?

 

Based on Charles McGonigal’s approach, he would not have progressed to an investigation of Dr. Xi if his office had handled the case.  However, he declined to comment directly on this specific case because a different FBI office handled the case.

 

“I don’t know all the facts in that investigation.  I was not part of this investigation. I don’t know where the deficiency came from … I am familiar what it was from a distance. …  [but] how they got to that point. Why didn’t they know earlier on? It would be inappropriate to comment,” he said.

 

Blacklisted?  The Thousand Talents Program

 

Aryani Ong reported that community leaders of Chinese American organizations had heard rumors that up to 18 doctors and researchers, many from MD Anderson Cancer Center in Houston, Texas, were under FBI investigation for past participation in China’s Thousand Talents Program.   Two months ago in August, the FBI had convened 100 top officials from the Texas Medical Center, an umbrella organization and concentrated medical complex of 60 medical institutions, including MD Anderson.   During the briefing, the FBI elicited the institutions’ partnership support to prevent IP theft.  What is unclear is whether the two incidences are connected.  The leaders held a forum the week before the UCA convention to open a dialogue with the FBI field office, but the invited speakers did not speak directly to the open cases.

 

Aryani Ong asked for a list of programs that Chinese Americans would know that they could safely participate.  In reply, Charles McGonigal said that he could not, inferring that the disclosure would show the FBI’s knowledge of the state links to the programs.

 

Peter Mattis – a U.S. expert on Chinese intelligence gathering – offered clearer guidance.  “Know who you are dealing with,” he said.  Peter Mattis revealed that tracing the state links is actually easy.  To start, he said, avoid the “Seven Brothers” technology universities,  e.g., Harbin Engineering University, which do classified research for the Chinese army.  He also advised being wary of the increasing number of civilian research programs and talent programs that are tied to the Military School of Leadership.

 

Be aware of the Chinese companies or programs that support the goals of China’s Five-Year plan, Peter Mattis said. Among the key advice given at the panel, he said “Chinese government policy and trade secret theft are directly connected.”

 

The panel ended with all speakers agreeing that the panel should be the beginning of conversations between the FBI and the Chinese American community, and not the end.  Audience members, still curious with questions, surrounded all the speakers outside the ballroom after the panel, and held lengthy discussions.