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Criminal initiative targeting scholars who allegedly hid Chinese funding and affiliations comes under growing scrutiny – Inside Higher Ed


On Jan. 14, with less than a week to go in the Trump administration, federal agents arrested a prominent mechanical engineering professor at the Massachusetts Institute of Technology, Gang Chen.

Chen, prosecutors alleged, failed to disclose on a federal grant application various financial ties and affiliations with Chinese entities, including his participation in Chinese government talent programs and his service as an expert scientific consultant to the Chinese government — omissions, or in federal prosecutors’ view, deliberate concealments that amounted to a scheme to defraud the federal government out of competitive grant funding that might not have been awarded to Chen had his ties to China been fully disclosed.

“The allegations of the complaint imply that this was not just about greed, but about loyalty to China,” former U.S. Attorney for Massachusetts Andrew Lelling said during a press conference announcing the charges — wire fraud, punishable by up to 20 years in jail and a $250,000 fine, as well as charges of failing to file a foreign bank account report (five years, $250,000) and making a false statement in a tax return (five years, $250,000).

Chen’s colleagues — and MIT, which is paying for his legal defense — have pushed back, poking holes in the government’s allegations. Chen’s lawyers have filed a motion with the court seeking sanctions of Lelling, arguing he and his office made statements that “are wildly misleading to both the general public and to future jurors” (the government has opposed the motion, describing it as meritless).

The $19 million in foreign funding from China’s Southern University of Science and Technology (SUSTech) that Chen and his research group are alleged in to have received? MIT says that’s not money that went to Chen individually. Rather, it’s money that went to an MIT-supported departmental collaboration for which Chen serves as the inaugural faculty director. (The mention of the $19 million in SUSTech money, included in the criminal complaint, is absent from the subsequent indictment, which merely accuses Chen of failing to disclose his position on SUSTech’s advisory board.)

An email cited in the criminal complaint as evidence of Chen’s “efforts to promote the [People’s Republic of China’s] scientific and economic development and advance its strategic goals”? Chen’s lawyers argue in court documents that the contents of the email constituted “notes from a lecture he attended rather than his own thoughts.”

And Chen’s alleged appointments acting as a “review expert” for the National Natural Science Foundation of China, advising the China Scholarship Council and recommending students for a Chinese government award? That’s just routine academic work, about 170 MIT faculty wrote in a letter supporting Chen.

“The official complaint is filled with allegations and innuendo based on what are, in fact, some of the most routine and even innocuous elements of our professional lives,” the letter from MIT faculty states. “Standard practices such as writing recommendations for our students so that they might receive fellowships or other prestigious and well-deserved career advancements, are portrayed as some sort of collusion with outside forces in an effort to help them steal American technology. Our routine participation in the evaluation of research proposals seems to be viewed in a similar manner. The fact that we do not report all of these activities in our own research proposals is used as a basis for allegations of intentional wrongdoing, when in fact information about these practices is a well-known and is a routine requirement of our job. In many respects, the complaint against Gang Chen is a complaint against all of us, an affront to any citizen who values science and the scientific enterprise.”

To be sure, the indictment also alleges nondisclosure of an affiliation that would be far more atypical for an academic — Chen’s alleged appointment as a consultant and adviser to the “Outstanding Talent Plan” at a Chinese public school, “for which he would [be] paid at least approximately $355,715 for his services” — as well as allegations about failing to file a report of a foreign bank account to the Internal Revenue Service.

But the case against Chen, a naturalized American citizen originally from China, a professor celebrated by colleagues and alumni of his lab for his warmth and humanity, noted for his long-standing practice of hosting Thanksgiving dinner for students, has touched a nerve in academe. The prosecution of Chen and what his supporters see as the seeming criminalization of even unremarkable academic ties to Chinese entities has only fueled growing concerns in academia about what many see as a targeting of Chinese and Chinese American scholars and students by the Department of Justice under the auspices of the DOJ’s approximately two-year-old “China Initiative.”

The China Initiative: Focus on Fraud or Prosecutorial Overreach?

Chen, who declined an interview request through an attorney, is one of more than a dozen university-based researchers and scholars criminally charged for allegedly concealing ties to China on federal grant applications, tax forms or visa applications since November 2018, when the Department of Justice launched the China Initiative, a mandate to prioritize cases related to economic espionage and trade secret theft and counter malign foreign influence on the part of the Chinese state. In launching the initiative, the Trump administration elevated the issue within the DOJ and sent a strong signal to federal prosecutors across the country of the issue’s importance.

The DOJ also wanted to send a strong signal to academe. “The primary goal of the China initiative is to sensitize private industry and academic institutions to this problem,” Lelling, who departed his position as U.S. attorney for Massachusetts at the end of February, said during an event on the China Initiative organized last year by the Center for Strategic and International Studies, a Washington think tank.

“Maybe next time an academic does not lie about his connections to a Chinese program,” Lelling said. “Or maybe next time an academic at an institution thinks twice or thinks a little bit harder about their collaboration with a Chinese institution and what the motivations of the Chinese institution might be.”

The initiative is not specific to academe, but it’s been a key area of focus. DOJ noted in its year in review of the China Initiative last year that the department quickly “identified academia as one of our most vulnerable sectors, because its traditions of openness, and the importance of international exchanges to the free flow of ideas, leave it vulnerable to PRC exploitation.”

The DOJ has been especially concerned about nondisclosure of participation in Chinese government-sponsored talent programs, which, DOJ argues in its year in review, “encourage the transfer of technical expertise from the United States, and elsewhere in the world, to benefit the PRC’s economic and military development.”

“Talent recruits generally sign contracts with the PRC sponsor-entity that obligate them to produce scientific outputs; to publish the results of their work in the name of the PRC beneficiary; to allow the PRC beneficiary to assert intellectual property rights over their outputs; and to recruit other researchers into the programs, among other obligations,” the agency states. “In exchange, the talent recruits may receive lucrative compensation packages, prestigious titles, and custom-built laboratories.”

“In the last administration, based on what we were hearing from the FBI and the grant-making agencies, we developed a better understanding of how the talent programs and related initiatives have a tendency to undermine research integrity if they’re not disclosed and there isn’t an opportunity to make judgments about whether a conflict of interest or conflict of commitment exists,” Adam Hickey, deputy assistant attorney general for DOJ’s national security division, said in an interview.

“Different talent programs have different contractual obligations and features, but some of the common aspects are: an obligation to produce research attributed to Chinese research universities; to recruit other researchers to the program; not to disclose your membership in the program; and some form of compensation, such as personal income, research funding or the promise of employment in China in the future,” Hickey said. “That’s an economic incentive that may or may not conflict with the federally funded work that you’re doing in the U.S. Whether it’s an actual conflict or not is something that the funding agencies and the U.S. research institutions here will have to suss out, but they can’t do that unless they know about it.”

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Apart from Chen, the most high-profile scientist charged for alleged undisclosed Chinese ties would almost certainly be Charles Lieber, a former chemistry chair at Harvard University who has been accused of hiding his affiliation with China’s Thousand Talents Plan and the Wuhan University of Technology from Harvard and federal grant agencies. Federal prosecutors allege his contract with WUT entitled Lieber to a salary of up to $50,000 a month, about $150,000 in living expenses and more than $1.5 million to establish a research lab at WUT. Lieber, who has also been charged with two counts each of making false statements, filing false tax returns and failing to report a foreign bank account, has pleaded not guilty to all charges.

The federal government announced its indictment last month of Lin Yang, a former professor at the University of Florida, who is accused of hiding from the National Institutes of Health his participation in a Chinese government talent program and his role establishing a Chinese company that prosecutors allege was meant to profit from U.S. government-funded research. Court records do not list an attorney for Yang, who according to the Justice Department is believed to be in China.

Feng (Franklin) Tao, a professor at the University of Kansas whose research focuses on renewable energy, faces fraud-related charges for allegedly concealing his participation in a Chinese government talent plan and his employment at a Chinese research university from Kansas and from the Department of Energy and National Science Foundation, which funded his research. A motion to dismiss the case filed last August — denied by the judge in November — characterized the case against Tao as “a breathtaking example of prosecutorial overreach,” arguing the government “has contrived a 10-count Indictment — including seven counts of wire fraud — on the basis of these two allegedly false Conflict of Interest forms that it contends Dr. Tao submitted to his employer.”

Also under the auspices of the China Initiative, professors at the University of Arkansas, Fayetteville; the University of Tennessee, Knoxville; and Texas A&M University have all been charged with allegedly concealing ties to Chinese universities or companies from the National Aeronautics and Space Administration, which is restricted by law from funding bilateral collaborations with China or Chinese-owned companies.

In addition, at least five visiting students or scholars have been arrested on visa fraud charges for allegedly lying about ties to the Chinese military on their visa applications (four of the cases are discussed here). Another student who was conducting research at the University of California, Los Angeles, is charged with lying about alleged military ties on his visa, making false statements and destroying evidence relating to an FBI investigation.

Three cases have resulted in guilty pleas. A former physics professor at West Virginia University, James Patrick Lewis, pleaded guilty to one count of federal program fraud in connection to what prosecutors allege was a scheme to secure parental leave from WVU under fraudulent pretenses in order to work in China through its “Global Experts 1000 Talents Plan.” Justice Department officials alleged that Lewis spent all but three weeks of the fall 2018 semester in China while claiming parental leave and collecting his full WVU salary, even though his newborn baby remained in the U.S.

A rheumatology professor who has taught at Ohio State and Pennsylvania State Universities, Song Guo Zheng, pleaded guilty in November to lying on National Institutes of Health applications. Prosecutors say he sought to hide his participation in Chinese talent programs and his collaboration with a Chinese university.

Xiao-Jiang Li, a former Emory University neuroscience professor, was initially accused of spending significant amounts of his time conducting research in China while maintaining full-time employment at Emory, where his salary was paid in part by NIH grants. A charge related to alleged theft of grant funds was dismissed, and he pleaded guilty last spring to filing a false tax return. He was sentenced to one year of probation and required to pay restitution to the Internal Revenue Service in the amount of about $35,000.

Peter R. Zeidenberg, Li’s attorney, said tax discrepancies of that magnitude are almost never prosecuted criminally. “That’s a very small amount of tax loss,” Zeidenberg said. “Most times people would just have to pay it and pay interest and penalties.”

Zeidenberg, who is also representing the Kansas researcher, Tao, said he’d like to see the DOJ refocus the China Initiative “on cases that involve the improper transfer of intellectual property or technology to China, which when the China Initiative was announced was supposed to be the focus.”

“Instead, the initiative has been going after professors even though there are no allegations of any improper technology or intellectual property transfer. They simply haven’t fully disclosed relationships — which are perfectly legal — which they may have had in China. Not only are these individuals losing their jobs, but they’re facing the impossibility of incarceration,” he said.

“My belief and speculation is that when they started doing these cases and investigating these cases, they didn’t find the kind of misconduct that they were hoping to find,” Zeidenberg added. “But they had a directive to bring cases involving Chinese American scientists, so they are left with bringing these cases, which look suspicious on the front end because there are undisclosed relationships. But when they dig in deeper, there is no improper transfer. Rather than move on, they’re taking these cases and they’re prosecuting them.”

Hickey, the deputy assistant attorney general for DOJ’s national security division, argues on the other hand that fraud is fraud.

“The other common denominator of all of those cases is dishonesty: we’ve alleged more than just an oversight or a paperwork error,” Hickey said. “What we’ve alleged is that the defendants made an intentional or willful choice to deceive, for the purpose of getting federal research dollars. That’s fraud. Intentionally lying to the government is a crime. I’ve never heard a really good explanation for why we should have a carve-out from that general legal principle for academics and professors.”

Hickey expects the DOJ to continue prosecuting such cases under the Biden administration. DOJ currently has interim leadership as the Senate considers the nomination for President Biden’s pick for attorney general, Merrick Garland.

“We didn’t just start enforcing the law in the last administration, and I don’t expect us to stop enforcing the law in this administration,” Hickey said. “I will defer to the incoming political leadership to describe how they are focusing resources and how to message what we’re doing, but to the fundamental question of, ‘Are we going to continue to prosecute fraud cases?’ — I expect the answer to be yes.”

James Mulvenon, co-author of the book Chinese Industrial Espionage: Technology Acquisition and Military Modernization (Routledge, 2013), said he objects to the fact “that with all of the defenders in these cases, there’s very little if any attention paid to the fact that these people were ultimately responsible for reading the forms and filling them out correctly, The pattern would suggest they deliberately did not identify the Chinese money they were receiving. That tells me they were doing something wrong.”

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“A lot of the complaints I hear are, you never used to enforce the rules so why are you enforcing them now,” Mulvenon said. “I don’t have a lot of patience for that. I don’t know what your ethical guideline is, but mine is how do you act when the police aren’t watching? If you accept a full-time job in China while you have a full-time job in the United States, I know it’s physically impossible to do both. Universities need to do a better job policing themselves, and they didn’t, and that’s why the federal government is stepping in.”

Racial Profiling Concerns

Increasingly, scientific and civil rights groups have raised concerns about the China Initiative.

In early January, a coalition of civil rights groups, Chinese scientific organizations and individuals signed on to a letter urging then President-elect Biden to end the initiative.

“It is appropriate for the Justice Department to take measures to address the harms caused by agents of the People’s Republic of China (PRC) who have engaged in economic espionage and trade secrets thefts,” says the letter, which was organized by Asian Americans Advancing Justice, the Brennan Center for Justice and the APA Justice Task Force. “However, naming only China in a DOJ initiative ignores threats of economic espionage by other nations. The label ‘China Initiative’ itself is as unacceptable as ‘China Virus.’”

The letter also argues that in many cases Chinese scientists are being prosecuted for federal crimes “based on administrative errors or minor offenses such as failing to fully disclose conflict of interest information to their universities or research institutions and other activities that are not normally treated as crimes except under the pretext of combating economic espionage.”

Not all the professors who have been prosecuted under the umbrella of the China Initiative are ethnically Chinese. But many are, fueling concerns among Chinese and Chinese American scientists about racial profiling.

“Our primary concern is that Asian American and in particular, in this case, Chinese American professors and academics and researchers are being singled out for alleged ties to the Chinese government when many of these instances appear to have involved fairly innocent mistakes,” said John C. Yang, president and executive director of Asian Americans Advancing Justice, one of the groups that sent the letter. “This kind or profiling does not help the pursuit of science and it ultimately does not help the national security of the United States.”

“Under the Trump administration’s China Initiative, we saw more and more Chinese and Chinese Americans becoming fearful that they would be the victims of racial profiling as tensions between the U.S. and China continued to rise,” U.S. representative Judy Chu, a Democrat from California and chair of the Congressional Asian Pacific American Caucus, said during a recent webinar on the China Initiative hosted by the APA Justice Task Force. “These cases have had a chilling effect on our community. I’ve heard from so many individuals who are afraid of pursuing a career in science or academia because they fear being falsely accused of spying and worry that they may be racially profiled simply because they are Chinese.”

Chu cited several examples of Chinese or Chinese American scholars who have been charged with federal crimes only for the charges to later be dropped, including the case of a visiting Chinese researcher at the University of Virginia who’d been charged with stealing proprietary software code. As The Wall Street Journal reported, the charges were dropped last fall after investigators determined that “some portion” of the relevant proprietary information allegedly found on the scientist’s computer was located “in a shared space” he had authorized access to.

Another researcher who was charged by the DOJ only to see those charges dismissed is Xiaoxing Xi, the Laura H. Carnell Professor of Physics at Temple University. Xi was arrested on wire fraud charges in 2015 — three years before the start of the China Initiative — and accused of sharing proprietary blueprints for a device known as a pocket heater, which has applications in semiconductor-related research, with scientists in China. As The New York Times reported, the charges against Xi were dismissed months later after independent scientists attested that the blueprints at the center of the government’s case were not of a pocket heater at all, but instead related to another, unrestricted technology.

Xi, who is suing an FBI agent involved in his case, said his life was turned upside down by the wrongful charges. “Although the charges were dropped, the false prosecution wrecked my life and that of my family,” Xi said during a recent talk hosted by University of Southern California’s U.S.-China Institute. “One day, I was a respected researcher and department chair. Overnight I was painted as a Chinese spy all over the news and the internet and faced the possibility of up to 80 years in prison and $1 million fine. I could not appear on campus, could not talk to my students. I was no longer the principal investigator of my research grant.” He worried about his career, his reputation, his mounting legal fees and his personal safety.

Today Xi’s research agenda is much smaller, in part because he is fearful of inadvertently failing to disclose something on a federal grant application. “I’m trying to apply for funding in collaborative projects, to team up with my colleagues, so that I will not be the person who signed those forms,” he said. “I would rather be in a team as a co-principal investigator, but of course that limits what I can do in my research.”

Xi said in an interview these policies are bad for Chinese scientists and bad for the U.S.

“These are policies which make it untenable for Chinese scientists to have a life and a career in this country,” Xi said. “These policies are just assuming that all these people are bad people, and they are spying for China.”

Xi suggests that allegations regarding nondisclosure of foreign ties can be addressed noncriminally by universities and granting agencies. He cites a 2019 report on fundamental research security commissioned by the National Science Foundation, known as the JASON report, that concluded that “many of the problems of foreign influence that have been identified are ones that can be addressed within the framework of research integrity.”

“JASON finds that failing to disclose any aspect of a foreign engagement, either a foreign scholar coming to the United States or a U.S. researcher conducting funded research in a foreign country, compromises the integrity of the U.S. research enterprise,” the report says. “A failure to make the proper disclosure must then be treated as a violation of research integrity and should be investigated and adjudicated in the same way as, for example, falsification of data or plagiarism (i.e., research misconduct). In most U.S. research institutions, punishments for research misconduct can include demotion, loss of privileges, or dismissal. Granting agencies, such as NSF, can bar an individual from receiving further grant support, typically for a defined period.”

The JASON report leaves open the door for prosecution in cases of intentional deceit. “It is important to note that some forms of failure to make proper disclosure can also involve legal punishments, for example, willfully supplying incorrect information as part of a disclosure.”

The Chinese Government Threat and ‘China-Ness’

DOJ officials have defended the special focus on China. FBI director Christopher Wray has argued that “no country poses a broader, more severe intelligence-collection threat than China.”

“The Chinese Communist Party’s theft of sensitive information and technology isn’t a rumor or a baseless accusation. It’s very real, and it’s part of a coordinated campaign by the Chinese government, which the China Initiative is helping to disrupt,” Wray said in the DOJ’s year in review. “The FBI opens a new China-related counterintelligence case nearly every 10 hours, and we’ll continue our aggressive efforts to counter China’s criminal activity.”

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“The point of framing it around China is to educate the academic community and the public about the Chinese government’s unique programs,” said Hickey, the deputy assistant attorney general for DOJ’s national security division. “They are unique in their scope and scale, but also in the way they serve the government’s industrial policy. It is important for us to continue to stress that this is about Chinese government programs, however, not about the ethnicity of particular individuals in the United States. We have to be very clear and very specific about that, so there isn’t a misunderstanding about what is relevant to prosecutorial decisions or to universities in screening for inappropriate behaviors.”

“The problem is, yes, there are other countries who are systematically involved in technological acquisition from the United States, but the vast majority of cases of technology that we care about are in fact being acquired and exfiltrated by people who have connections to the People’s Republic of China,” said Mulvenon, the co-editor of the 2013 Routledge book on Chinese industrial espionage. “The other possibility is it’s not racism. It’s the huge demand signal from Beijing that incentivizes people to obtain these technologies.”

“Everyone’s focused on DOJ,” Mulvenon said, “but there doesn’t seem to be a lot of focus on Beijing’s agency in all of this.”

Anna B. Puglisi, senior fellow at Georgetown University’s Center for Security and Emerging Technology, and a co-editor for the Chinese industrial espionage book along with Mulvenon, said it’s unfortunate the issue has become so polarizing.

“There’s no place for hostility or xenophobia or ethnic profiling. Unfortunately, I think, in the last administration, legitimate criticisms of Chinese government talent policies and programs got lumped in with general immigration policies and xenophobic rhetoric,” said Puglisi, an expert on China’s foreign talent recruitment strategies and its efforts to acquire foreign technology and technical know-how. “That said, we can’t ignore the fact that the Chinese government does have explicit efforts to exploit its diaspora and as a result the U.S. innovation base.”

“The academic community is really pushing back and saying there’s no there there,” said Puglisi. “I think the documentation of these policies and programs really tell a different story. It gets back to are you seeing China as a neutral actor or do we take the policies and programs at face value that talk about exploiting collaborations to fill those strategic goals?”

Maggie Lewis, a professor at Seton Hall Law School, argues in a forthcoming article in the Journal of Criminal Law and Criminology that the Department of Justice is not making up the threat. But she argues it is framing the threat in a problematic way. She argues in a draft manuscript “that using ‘China’ as the glue connecting cases prosecuted under the Initiative’s umbrella creates an overinclusive conception of the threat and attaches a criminal taint to entities that possess ‘China-ness,’ based on PRC nationality, PRC national origin, Chinese ethnicity, or other expressions of connections with ‘China.'”

Lewis said in an interview that DOJ’s approach should “be country-neutral. The more we can frame this in a country-neutral manner and try to figure out the behaviors we’re concerned about, that’s a better path than saying this is about China specifically. There might still be more cases involving China — I don’t think we need to have a proportional representation, ‘where’s the Bolivia case?’ — but I do think it makes a difference to say, ‘we’re starting out with concerns about nondisclosure in federal grants, about shadow labs in other countries,’ and follow wherever that behavior leads rather than say, ‘China is the threat. Make sure you pay special attention to what’s happening in China.’”

A steady stream of opinion articles about the China Initiative has come out in the weeks since Chen’s arrest. Rory Truex, an assistant professor of politics and international affairs at Princeton University, raised concerns about the impact of the China Initiative on U.S. science in a recent article in The Atlantic.

“Even if the China Initiative is being implemented in a nondiscriminatory way and is effective in rooting out a few bad scientists with illicit intentions, the Biden administration should not ignore the downside,” Truex wrote. “How many good scientists are going to be deterred from coming to the U.S.? In a typical year, tens of thousands of Chinese scientists come to the United States, enriching the universities and research communities they join. Across STEM fields, an estimated 41,000 master’s and 36,000 doctoral students in American universities are Chinese citizens. This represents 16 percent of all U.S. graduate students in those disciplines. The overwhelming majority — about 85 to 90 percent — seek to assimilate and gain U.S. citizenship. When they stay, they create companies, jobs, and new technologies that benefit the United States.”

In a new article in the Lawfare blog, Elsa Kania, an adjunct senior fellow with the Technology and National Security Program at the Center for a New American Security, and Joe McReynolds, the Chinese Security Studies Fellow at the Jamestown Foundation and co-founder of the China Cyber and Intelligence Studies Institute, note that the Chinese government “relies heavily on modes of knowledge transfer that don’t align with traditional definitions of espionage, such as targeted start-up acquisitions and talent recruitment. Such activities are often challenging to prosecute but nevertheless can damage the U.S. national interest.”

Nevertheless, they argue the Biden administration should review and fundamentally rebuild the China Initiative. They write that “a string of questionable cases has undercut the government’s broader effort to counter espionage by the People’s Republic of China (PRC) by alienating the very communities that the Department of Justice must collaborate with to effectively identify malign actors.”

Among other reforms, Kania and McReynolds support the introduction of a one-time program, reportedly under consideration by the Justice Department, that would grant amnesty for researchers for nondisclosure of past affiliations. Kania and McReynolds argue that “disclosure requirements for foreign funding have often been poorly communicated to the academic community, and until recently enforcement was nearly nonexistent, leaving many academics in violation of the relevant laws even when they have had nothing to hide.”

“The Department of Justice’s choice to leverage this widespread noncompliance for its prosecutorial advantage is to some extent understandable,” they write. “An aggressive approach to enforcement can secure open-and-shut convictions on lesser charges against individuals who law enforcement believes to be guilty of greater offenses, analogous to Al Capone’s famous conviction for tax evasion. However, this tactic provokes equally understandable fears from many quarters of the scientific community, particularly from those who might find themselves at the mercy of prosecutorial discretion.”

Leslie Wong, the former president of San Francisco State University, said during the recent webinar organized by APA Justice that he’s been very surprised “that presidents and chancellors haven’t taken a stronger systematic approach by not only protecting their Chinese scientists and researchers, but by developing policies by which a number of systemic offices are involved to prevent the kinds of mistakes that are being pursued by federal agencies.”

“Part of the problem,” he said “was that prior to 2016, universities were rewarded for having partnered research relationships with international universities, and all of the sudden that was reversed, and so you had people on NIH, NSF grants, five-year, six-year renewable grants with a partner in China, saying, ‘What do I do now?’”



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