On Senate Floor, Portman Says U.S. Must Do More to Stop Theft of Taxpayer-Funded Research & Intellectual Property

New PSI Report Reveals Lack of Federal Response to China’s Talent Recruitment Programs

November 21, 2019 | Press Releases

WASHINGTON, DC Today on the Senate floor, U.S. Senator Rob Portman (R-OH) highlighted a new bipartisan report released by the Permanent Subcommittee on Investigations, which he chairs, that documents 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. Portman held a hearing on Tuesday to highlight these findings. At the hearing, the Federal Bureau of Investigations (FBI) admitted that the agency should have taken more rapid and comprehensive action in addressing China’s strategic plan to acquire knowledge and intellectual property from researchers, scientists, and the U.S. private sector through their talent recruitment programs.

A transcript of his remarks is below and a video can be found here.

“I’m here today to talk about a very troubling report that was issued this week by the Permanent Subcommittee on Investigations. This is a tough subject. It details in this report, for the very first time, how taxpayer dollars have been used, really over the past 20 years, to fund scientific research that has been misappropriated by one of our global competitors, China, to fuel their own economy and their military growth. What do I mean by that? What happened? Well, every year federal grant-making agencies like the National Institutes of Health (NIH) or the Department of Energy’s National Labs or the National Science Foundation, give out taxpayer dollars for research, actually about $150 billion a year. 

“This is a good thing for us as a country. It leads to new breakthroughs in science and technology, health care, weapons systems and so on. This money goes in research grants primarily to universities and other research institutions across the United States. This investment has been very helpful to making the United States the world leader in scientific innovation. And again it has resulted in some amazing breakthroughs.

“Our U.S. research is built on some principles here in this country. One is transparency. Another is collaboration. Integrity, peer review, a merit-based system. In fact, the open and collaborative nature of the research that’s done here in the United States is one of the reasons we attract some of the best and brightest scientists and researchers from all around the world. And that’s a good thing. But without proper protections, this research is vulnerable to theft by other countries, and that’s exactly what has happened.

“The Permanent Subcommittee on Investigations, which I chair, along with Ranking Member Tom Carper, conducted an eight-month investigation into how American taxpayer-funded research has been taken by China, effectively stolen, to assist their own economy and their own military. China has been very open about its goals to surpass the United States as the world leader in science and technology by the middle of this century. An important part of this effort are what they call their ‘talent recruitment programs’. Through talent recruitment programs, China has strategically and systematically acquired knowledge and intellectual property from researchers and scientists in the United States in both the public and private sector.

“In the course of our investigation, the FBI shared with us that China plans to spend more than $2 trillion between 2008 and 2020 towards improving its human capital which includes recruiting and developing researchers and scientists. The Thousand Talents Program, which was the focus of our investigation, is now in its 11th year of operation and is probably China’s most prominent talent recruitment program. However, there are about 200 or more other talent recruitment programs as well. Launched in 2008, China designed this Thousand Talents plan to recruit 2,000 high-quality overseas experts and to get their knowledge and their expertise and their research. By 2017, China had exceeded that initial goal by recruiting more than 7,000 of what they call, ‘high-end professionals,’ including many from American research institutions.

“Some of the U.S.-based researchers, of course, also receive taxpayer-funded federal grant money we talked about earlier to do the same research right here in the United States. In exchange for spending part of every year working in Chinese institutions, the Thousand Talents plan recruits are rewarded with generous salaries, research budgets sometimes even exceeding their pay at the American research institutions but where in practice they are working. These researchers often also get access to what’s called a Shadow Lab in science. In other words, they provide them not just with funding, but also say ‘we’ll provide you with lab space in China.’

“At our hearing yesterday the Department of Energy witness testified that China offered some of its researchers hundreds of thousands, even millions of dollars to join a talent recruitment program. For a researcher here, the Thousand Talents plan might seem like a good opportunity, but it’s certainly not a good opportunity for the United States, especially because embedded in the language of some of these contracts these researchers signs are very troubling provisions to prevent these recruits from disclosing their participation in the Thousand Talents plan even though disclosing foreign payments is required by U.S. regulations. Not only is this dishonest but it’s also a clear violation of the American regulations that require researchers that apply for these grants we’re talking about, this $150 billion of taxpayer money, it requires that researchers who apply for those, if they’re receiving any funding from a foreign source, to disclose it.

“In effect, what is happening with the Thousand Talents plan is that it is incentivizing these program members to lie on grant applications to U.S. grant funding agencies to avoid disclosing their funding from Chinese institutions. What’s worse, in many of these contracts researchers are often required to transfer to China the technological breakthroughs, the research that’s being developed in American labs with American grant money. There are lots of examples we found in our eight-month study. Let me talk about a couple quickly.

“In one we learned a Thousand Talents plan recruit at the Department of Energy National Labs used the intellectual property created during his work in a National Lab to file for a U.S. patent under the name of a Chinese company effectively stealing the federally-funded research and claiming it for China. Another Thousand Talents member illegally downloaded more than 30,000 files from a National Lab. This is connected with the Department of Energy funding, without authorization, right before returning to China. Once China has it, some of this research could be used to threaten the national security of the United States. As an example, the State Department witness testified at our hearing yesterday that, ‘The Chinese Communist Party has declared the Chinese university system to be on the front line of military, civilian fusion efforts for technological acquisition for weapons research and the expansion of key scientific and engineering talent to drive Chinese innovation.’ That’s pretty obvious. That’s what all of our witnesses in essence said.

“This is not a new problem. We found out through our investigation that the federal government should have known about this issue for almost two decades but has yet to do anything substantial to stop it. It’s unacceptable that we’ve allowed this to go on as long as we have. These talent programs are a win-win for China and a lose-lose for the United States. First, the Chinese government and their research entities are getting research that is paid for by us. Second, it’s not used for us. They use that research in China to improve their own economic and military status.

“So why has it taken so long for us to do anything about this problem? I think there are a couple of reasons. First, a lot in the U.S. research community didn’t fully understand the Thousand Talents plan and the threat it poses, even though this one program is more than a decade old at this point it wasn’t until last year that the FBI began organizing a unified federal response to the threat it’s been posing to our universities and research institutions. We’ve been slow to focus on this issue and, therefore, it’s continued. I appreciated the FBI’s candor at the hearing yesterday, by the way, when the FBI assistant director testified that he wished the FBI had, ‘Taken more rapid and comprehensive action in the past.’ I do too. Second, I think one reason this hasn’t been stopped is that the coordination between the grant-making agencies is almost as bad as the coordination with the federal law enforcement folks, meaning they aren’t talking to each other about problems they have had, about particular instances, about some of the research that’s been taken.

“As I’ve said, we’re talking about more than $150 billion of taxpayer money every year that goes to these agencies. But once these funds are in the agencies’ hands, we found no evidence of a unified and coordinated tracking and monitoring process to ensure the money did not go towards the Thousand Talents plan participants or other programs. The National Science Foundation, for instance, doesn’t seem to have anyone who handles grant oversight in this regard. These research entities need to share information on these issues. But other organizations are at fault too.

“We found that the State Department is on the front lines due to its responsibilities to vet visa applications for visiting students and scholars but it very rarely denies visas under that process. Quite frankly, the research community here in the United States bears some responsibility too. There’s been a collective failure by our universities and our research institutions to vet researchers for these conflicts of interest with other countries. Again, this is made worse by the fact that many of these researchers are receiving taxpayer funds to conduct their research here. So it’s going to take a comprehensive strategy across the federal government to better protect our research against this threat. Our report makes a number of recommendations that combined will go a long way toward strengthening the security of our research networks while providing the shared culture of transparency and fairness. It’s a balance, of course. We want to continue to be the top place in the world for research, and that means that we have to be able to share and have transparency and openness, but it also means that we need to do a much better job at protecting this information from being misused.

“We of course need to do better at getting the word out to universities, research institutions and the general public about this threat being posed by the Thousand Talents plan and other foreign talent recruitment plans. This means better coordination between law enforcement, the intelligence community, and grant-making agencies so the government is on the same page about this threat. We also need to change the research culture to preserve its openness and innovative spirit while making sure foreign researchers are properly vetted by the sponsoring organizations. NIH, NSF and other grant-making institutions need to standardize how they find conflicts of interests in grant applications, they don’t do that now. And members of the research community need to develop best practices for American researchers to follow so that they can determine if receiving funds from a foreign country would compromise our principles of research integrity and threaten our national security.

“Finally, we need to help the State Department do a better job in its visa vetting process for foreign researchers. We need to be able to do a better job of determining potential conflicts of interests before individuals, who may not have the best interests of the United States at heart, start working at our research institutions and using our taxpayer dollars. In the coming months I will introduce bipartisan legislation that will help address some of these challenges. I look forward to working with Senator Carper, the ranking member on this subcommittee and other colleagues to get those initiatives to the president’s desk.

“Let me conclude by saying we don’t want to exclude China from contributing to scientific innovation, not at all. Advancements in the fields of robotics, medicine, energy, weapons systems, and more are things that are very important, and many of these can benefit the entire globe. But we want to have fair and transparent processes in place as we conduct this research. And our taxpayers don’t want to be the ones to pick up the tab as China misappropriates our research to build up its own economy and a military designed to rival ours. My hope is that this report is the start of a productive dialogue with China and here in Congress on how we can better build a more secure research system that continues to reward those who come to our shores to discover new breakthroughs in science while keeping China and other nation-state competitors from taking that research for its own purposes.”