In the Colorado U.S. Attorney’s Office, we have a wide range of law enforcement priorities, from fighting violent crime and drug trafficking, to battling the prescription opioid epidemic and protecting civil rights. But right at the top of that list is combating a threat to not only the citizens of Colorado, but to our nation as a whole: a concerted effort by the People’s Republic of China (PRC) to surreptitiously target and steal our national defense technology, corporate intellectual property, university research, and even agricultural innovation.
To many, it may sound like fiction — PRC spies infiltrating companies and universities across America, stealing military technology and trade secrets, and pushing American companies out of business. In reality, it is surprising that such a ubiquitous threat is not better understood and accepted by our corporate, academic, and political leaders.
How serious is this threat? It is now one of the very top priorities for the FBI, which is standing up counterintelligence task forces across the country to respond. And as home to hundreds of defense contractors, major research universities, and many advanced technology companies, Colorado is a prime target of the PRC’s well-resourced foreign intelligence assault. Having sat through classified briefings on the topic, I can tell you that we must do more to help our business community and institutions understand this threat and protect against it.
Surprisingly, the PRC is fairly open about its goal of achieving economic dominance by any means necessary. In 2015, the PRC announced its Made in China 2025 initiative. Under this program, China hopes to dominate the global economy in ten key industries, including aerospace, bio-medicine, robotics, artificial intelligence and agricultural machinery (notably, all primary industry clusters here in Colorado). But instead of innovating to develop these technologies, the PRC has implemented a “rob, replicate, and replace” strategy. It robs U.S. companies and universities of their intellectual property and trade secrets, replicates the technology, and then replaces these producers in advancing its own military and industrial ambition.
Recent examples of this strategy abound. Last year, the Department of Justice charged Chinese telecommunication giant Huawei with a long-running conspiracy to steal trade secrets from various U.S. technology companies. The sophisticated scheme allegedly included bonus payments to employees that were able to obtain confidential information from competitors. The misappropriated intellectual property included non-public internet router source code, antenna technology, robotics technology, and more.
Through the alleged conspiracy, Huawei was able to cut its research and development costs and gain a significant advantage over competitors. When confronted with the allegations by the FBI, company representatives gave misstatements and attempted to obstruct the investigation. These charges followed charges brought against the company in 2019 for allegedly selling U.S. technology to Iran in violation of sanctions.
This past summer, we also saw the U.S. Government close China’s consulate in Houston, accusing the PRC government of using that facility as a base for its espionage operations. Plumes of smoke from burning documents were seen rising as consulate employees hastily destroyed materials before evacuating. Around the same time, the Department of Justice arrested several Chinese nationals working as university researchers on charges related to hiding their affiliation with the People’s Liberation Army (the PRC’s military). Following those arrests, more than a thousand other Chinese researchers, who likely had similar PLA affiliations, quickly fled the United States for China.
And last July, the Department of Justice charged two Chinese nationals in Washington state with hacking into hundreds of companies and governmental entities, including those involved in early-stage Covid-19 vaccine research.
American universities and research facilities are also being heavily targeted through another of the PRC’s initiatives, its Thousand Talents program, which openly recruits Western scientists to set up labs in China and conduct research there in exchange for grants and generous salaries. A prominent example of this is the case of Charles Lieber, former head of Harvard University’s chemistry department and the alleged recipient of millions of dollars in grants from the National Institutes of Health and the Department of Defense to conduct nano-science research. According to the indictment, Lieber allegedly failed to report that China’s Wuhan University was giving him a salary of up to $50,000 a month, living expenses that topped $150,000, and $1.5 million to build a facility and conduct his research in China part-time. Not only did Lieber fail to report the agreement as required, but he allegedly lied to federal investigators when asked about it and fraudulently concealed the income obtained from his sponsors in China.
Rest assured that here in Colorado, my office, the FBI, Homeland Security Investigations, and other federal partners are doing everything we can to combat this growing threat. However, the reality is that we cannot do it alone. Corporate officers, general counsels, academic leaders, and others with access to sought after intellectual property or technology must help.
This effort starts with investing in robust cyber security, implementing heightened protocols to protect research and trade secrets, and training employees to recognize insider threats, regardless of their origin. And corporations and universities must not be afraid to report suspected intrusions and loss of intellectual property. Any institution – public or private – that believes it has been targeted, is concerned about an employee, or has suffered a loss, should contact my office or the Denver FBI office immediately.
Where appropriate, we will vigorously investigate and prosecute those who seek to steal the fruits of America’s ingenuity or to compromise our national security. And ultimately, we will deny the PRC government the benefit of these crimes.
Jason R. Dunn is the U.S. Attorney for the District of Colorado and a member of the Attorney General’s advisory subcommittee on Cybercrime and Intellectual Property.