On Senate Floor, Portman Discusses Recent Criminal Charges Against China’s Thousand Talents Program Members & Upcoming Legislation to Prevent IP Theft by China
WASHINGTON, DC – Today on the Senate floor, U.S. Senator Rob Portman (R-OH) discussed a number of recent criminal charges brought by the Department of Justice (DOJ) in wire fraud and tax evasion cases tied to academics participating in China’s government-run Thousand Talents Program. He outlined how the details of these cases follow the findings of the Permanent Subcommittee on Investigations’ (PSI) eight-month investigation last year into Thousand Talents and other so-called “talent programs” run by the Chinese Communist Party. The investigation by the Subcommittee, which Portman chairs, culminated last November in a stunning bipartisan report that documented how American taxpayers have been unwittingly funding the rise of China’s economy and military over the last two decades while federal agencies have done little to stop it.
In response to the report, the FBI and the Department of Justice have announced criminal charges and the arrests of several academics affiliated with American universities and research institutions for crimes related to their participation in China’s talent recruitment programs while accepting American taxpayer-funded grant funding.
Portman discussed how the legislation he will be introducing soon builds on PSI’s recommendations to promote an open and transparent research enterprise in the United States and crack down on the theft of American taxpayer-funded research and IP, while also empowering the DOJ and the Federal Bureau of Investigations to directly punish those who seek to steal America’s research to benefit our rivals.
A transcript of his remarks can found below and a video can be found here.
“Mr. President, last week I came on the floor of the Senate to talk about how the tragic spread of the coronavirus around the world underscored the need for us to focus on the persistent challenge of China not playing by the rules. Now, in the case of coronavirus that was about China not telling the World Health Organization, not telling other countries, not telling their own people what was happening in terms of the coronavirus, not taking steps to stop international travel early on. That wasn’t playing by the WHO rules, the World Health Organization rules, and the result has been devastation. It has been the spread of the virus and so much of that devastation we’ve seen around the globe, in my view could have been avoided had they played by the rules. Unfortunately not playing by the rules applies to China in many other areas too.
“We’ve talked about trade a lot on this floor of the Senate to be sure that there’s a level playing field between China and the United States and making sure they play by the international trading rules. But here’s another one where China and the Chinese Communist Party has not played by the rules and that’s with regard to obtaining our intellectual property, our innovation, our research. Over at the Permanent Subcommittee on Investigations, which I chair, we found this not playing by the rules to be the case when we conducted a bipartisan year-long investigation into how China has used so-called talent recruitment programs, most notably its Thousand Talents Plan to steal U.S. taxpayer-funded research to fuel the rise of both the Chinese military and the Chinese economy over the past 20 years. It’s been going on for two decades. You might ask, 'how has this happened?' How could this be possible? Well, this is how it happens.
“Every year federal grant-making agencies like the National Institutes of Health, the Department of Energy and their National Labs, the National Science Foundation, and others, give out more than $150 billion in U.S. taxpayer funds for research. That’s quite a bit of money. For the most part, this system works well. American taxpayers send the money to these federal-grant making agencies here in Washington who then give it out to the best researchers and best research labs in the country. It’s resulted in important breakthroughs in science, technology, and health care, in energy, in military equipment, and more. The NSF helped fund the creation of the internet. The NIH has funded research into very successful and innovative treatments for cancer and other diseases. So there’s a lot of good stuff coming out of these research dollars. It’s made America really the leader in the world on innovation and new ideas, and for the most part, this federal research funding has enjoyed broad bipartisan support here in the Congress. But guess what? It’s also attracted the interest from researchers around the world who want the chance to take part in this cutting-edge research and that’s good too, as long as they play by the rules.
“What we’ve learned, and through our report we prove, is that this system is very vulnerable to theft by other countries, and that’s exactly what's happened in the case of China. China’s made it no secret that its goal is to surpass the United States as the world leader in scientific research and they’ve seen an opportunity to get ahead by exploiting this system of taxpayer-funded grants and the open and collaborative research enterprise that we have in this country. So they’ve taken advantage of that. Specifically, the Chinese government has systematically targeted the most promising U.S. researchers. So they find out somebody is doing some research on something interesting to them, they systematically target that person. They’ve been paying these grant recipients to take their research -- remember research paid for by U.S. taxpayer dollars -- and apply what they learned here in labs over in China at Chinese universities affiliated with the Chinese Communist Party.
“The research they’re taking over to China isn’t going just towards academic purposes. That wouldn’t be right either, because our taxpayer dollars are going in to fund this research. They are then leap-frogging us by getting that research. But it’s not just for academic purposes. Often the research ends up going directly into things like advancing China’s military, which has made great strides in the last two decades, advancing its technological growth, its economy, its manufacturing processes and so on.
“A State Department witness at one of our Senate hearings on our report said this, ‘The Chinese Communist Party has declared the Chinese university system to be on the front line of military-civilian fusion efforts for technology acquisition.’ So there’s a clear link here between the research going to these Chinese university labs and that same research being used to allow China to effectively leapfrog us in terms of their military improvements and their economic growth. Part of the reasons it’s gone on so long, frankly, is because we’ve been asleep at the switch. We haven’t been focused on this. We do have an open, collaborative research system in this country, and we haven’t been effective at cracking down on this intellectual property theft. That’s starting to change and I’m appreciative of that. It started to change, frankly, in the wake of our Subcommittee investigation, the Permanent Subcommittee on Investigations hearings also helped, our report also helped, where during one of our hearings the FBI actually acknowledged what has been happening. This is what the FBI said, ‘With our present day knowledge of the threat from Chinese talent plans, we wish we had taken more rapid and comprehensive action in the past. And the time to make up for that is now.’ Well, I appreciate the candor. I appreciate the fact that the FBI was willing to say 'now that we’ve learned all of this, we should have enacted this a long time ago and we’re going to do it now and make up for lost time.' And they have been much more aggressive.
“Since our hearing and detailed report last November, we’ve seen a number of high-profile arrests of academics in this country who have consistently hidden their participation in China’s Thousand Talents Program and taken have research over to China. You may remember hearing about this issue earlier this year when a Harvard professor named Dr. Charles Leiber, who was chair of Harvard University's chemistry department was accused of secretly taking money from China and sharing his U.S. taxpayer-funded research with the Chinese government. It was really a shocking example of this. But he’s not the only case. In March we received news of another arrest of a professor who used to work at West Virginia University who participated in Thousand Talents. In this case the Justice Department found that he had convinced his employer, a U.S. public university, to give him paid parental leave funded by American taxpayers while he went to China to work at a university there to continue his work on specializing molecular reactions used in coal conversion technologies. This is from West Virginia University.
“These two cases would be bad enough on their own, but just since the start of this month we’ve actually had three more cases announced by the Department of Justice and FBI in relation to this Thousand Talents Program. I commend the DOJ and the FBI for their work to continue to crackdown on this program and to go after these problems. But they need better tools to do it. About two weeks ago, a former Emory University professor pled guilty to falsifying his tax returns to conceal his work for the Chinese government. The professor worked simultaneously and secretly for six years for both Emory University and overseas for Chinese universities affiliated with the Communist Party of China, conducting similar research projects at both institutions. Despite this clear conflict of interest, he failed to report any of his at least $500,000 in foreign income on his federal tax returns.
“That very same day a professor at University of Arkansas was arrested on charges of wire fraud for allegedly failing to disclose his ties to the Chinese government, despite being required to do so as a grant recipient of money from NASA. NASA. And just this past week we found out that this problem had reached my home state of Ohio when the Department of Justice announced the arrest of a researcher previously affiliated with the world-renowned Cleveland Clinic. This researcher had received more than $3.6 million in taxpayer-funded grants from the National Institutes of Health. Again, taxpayer dollars. To secure that grant, he is accused of lying to hide the fact that he was given a deanship at the university in Wuhan, China. He’s also accused of lying about his Chinese government funded research directly overlapping with his NIH funded research. According to the criminal complaint, he received $3 million in funding from China to run a shadow lab in Wuhan to replicate his Cleveland Clinic research, along with free travel and free lodging funded by the Chinese government. It says he even admitted that he hand-carried samples to China of biological material, from Cleveland, Ohio, to Wuhan. Those samples are still stored, by the way, in China. It also states that he did not disclose that one of his Chinese grants required that he be in Wuhan for ten months of the year at the same time he was employed full time at the Cleveland Clinic, again working on NIH-funded research.
“I commend the Cleveland Clinic for working with the FBI and the U.S. Attorney’s Office to ensure that we were able to stop this from happening. As a Thousand Talents member, the criminal complaint also alleged that this individual recruited around 40 to 50 other U.S.-based researchers for his Chinese university by hosting events at Harvard and other schools in the United States. This is a big deal, and it needs to stop.
“I commend the Assistant Attorney General for National Security, John Denvers, for his work on this and other cases, but also U.S. Attorney Justin Herdman of the Northern District of Ohio, FBI Special Agent in charge, Eric Smith, and all the members of their team for their work on this Cleveland Clinic case.
“Again, these cases are all positive steps in the right direction, but the problem, as you might notice, is that none of these criminals charges and arrests were actually based on participating in the Thousand Talents Program, or even hiding that from the U.S. government research institutions or universities. The criminal charges and arrests were all for other crimes like perjury, wire fraud, tax evasion. That’s because, amazingly, failing to disclose on a grant application to receive U.S. taxpayer funds that you are receiving compensation, clear conflict of interest, from a foreign government and giving them your research is not currently a crime. That needs to change.
“One example, the Emory University professor, according to the law, only committed tax fraud while the Arkansas professor only committed wire fraud. The fact that these are technically only financial crimes show that we’re still just nibbling around the edges of this problem. It’s time for us to get at the underlying flaw in our research enterprise of talent programs enticing researchers here in the U.S. to steal for other countries. We’re going to need targeted legislation that will take direct action against this practice and that’s exactly what we have done. Along with a group of colleagues, including Democrat Tom Carper, the Ranking Member of the Permanent Subcommittee on Investigations, we are introducing the Safeguarding American Innovation Act, which is going to build on the recommendations made in our PSI report and address some of these root causes of the ongoing IP theft that’s currently going on.
“First and foremost, our bill is going to help the Department of Justice go after Thousand Talents participants by allowing DOJ to hold federal grant recipients accountable for failing to disclose their foreign ties on federal grant applications. This isn’t just about more arrests either. We should all agree that transparency and honesty on grant applications are critical to the integrity of U.S. research and these provisions will help promote those principles.
“Our bill also makes other changes as well based on the recommendations in our report. It requires the Office of Management and Budget, OMB, to streamline and coordinate grant-making between these federal agencies so there’s needed accountability and transparency when it comes to tracking the billions of dollars of taxpayer funds and grant money that’s being distributed. We’ve worked closely with NSF, NIH, the Department of Energy and others on this legislation and they agree this is important.
“It also allows the State Department to deny visas to foreign researchers who are seeking to access sensitive U.S. research when there is a threat to our economic or our national security. This may surprise you, but they can’t do that now. Career foreign service officers, employees at the State Department, have begged us for that authority.
“Our bill also requires research institutions to have safeguards in place to prohibit unauthorized access to sensitive research because we’ve found that to be a serious problem. And our bill ensures transparency by requiring universities to report any foreign gift of $50,000 or more and empowering the Department of Education to fine universities that repeatedly fail to disclose these gifts.
“Right now, our number one priority is and should be solving the coronavirus crisis. And I get that. And, by the way, the FBI sent a notice around last week to universities, research institutions, saying, 'watch out because there are actually Chinese hackers trying to get your research on coronavirus.' This just happened last week. But I got to tell you, in the context of this crisis, we’ve also got to reevaluate how we do business with China. We’ve got to look at this with fresh eyes and realize that in many areas, China has not been playing by the same set of rules as the rest of the world. We talked about that earlier with regard to trade, with regard to reporting on the coronavirus. I think in a fair and straightforward manner we’ve got to lead in insisting that there be a level playing field, whether it’s the WHO, or whether it’s transparency with the coronavirus or trade policy or how research is acquired.
“My hope is that our PSI report and now the legislation we are introducing lets us reset the way we conduct our research. Our goal should be to continue to reward those who come to our shores and discover new breakthroughs in science and technology. We want that. We’re very proud of the fact that we’re the most innovative country in the world and we’re known for our research enterprise. We want to continue that. But we want to do it in a smart way. We want to be sure that we are keeping China and other nation-state competitors from stealing that research for its own purposes. I know we can achieve that balance. We believe our legislation does that. I look forward to getting support from both sides of the aisle because this is a problem we should all be concerned about.”