NOT GUILTY AS CHARGED
Several cases have unraveled lately against Chinese-born scientists accused of sharing industrial secrets. Critics smell a witch hunt. Originally published in Science in 2015.
Just after dawn on 21 May, physicist Xiaoxing Xi awoke to find a dozen or so armed federal agents swarming his home in the Philadelphia, Pennsylvania, suburbs. When he rushed to open the door, they drew their guns and announced that they had a warrant for his arrest. His wife and daughters—one in middle school and the other in college—watched in horror as agents handcuffed Xi, who was still not fully dressed, and escorted him away.
Then interim chair of the physics department at Temple University in Philadelphia, Xi is a naturalized U.S. citizen who has lived and worked in the United States since 1989. He is among the world’s leading experts on superconducting thin films, which carry electricity without resistance at very low temperatures. At the time of his arrest, he was in what he calls a “very productive” phase of his career, overseeing nine research projects, including work for Temple’s Energy Frontier Research Center, which is funded by the Department of Energy. But now he stood charged with trying to transfer designs for a proprietary technology to China—a device called a pocket heater, produced by Superconductor Technologies Inc. (STI) of Austin, that makes thin films of the superconductor magnesium diboride—and faced 80 years in prison and a $1 million fine.
Xi was released after putting up his home as bail, but his passport was confiscated and his domestic travel restricted to eastern Pennsylvania. For days, his family avoided the windows in their home as television stations broadcast live from their front yard. Over the months that followed, they drained their bank accounts to pay legal fees.
Citing a nondisclosure agreement Xi had signed in 2006 in order to conduct research with a pocket heater, the U.S. attorney’s office in Philadelphia, Pennsylvania, had charged him with four counts of wire fraud, for four emails sent to contacts in China about establishing labs and a collaboration involving a thin film deposition device. But on 11 September, before a trial date had been set, the U.S. attorney’s office abruptly dropped the charges, noting that “additional information came to the attention of the government.” A spokesperson for the office declined to comment further on the case.
At issue, Xi’s lawyer and scientists familiar with the case assert: a glaring misinterpretation of the science involved. The devices Xi had discussed with Chinese colleagues were not the pocket heater, they say, and the exchanges posed no threat to U.S. interests. “The whole case against Xiaoxing Xi was just completely misconceived,” asserts David Larbalestier, a physicist at Florida State University, Tallahassee, who submitted an affidavit for the defense.
The Obama administration names economic espionage and trade secrets theft as among the primary threats facing the United States. Together with cybercrime, economic espionage is now the Federal Bureau of Investigation’s (FBI’s) No. 3 priority, after terrorism and counterintelligence. According to testimony by Randall Coleman, assistant director of the FBI counterintelligence division, the number of cases overseen by the bureau’s dedicated unit grew by 60% from 2009 to 2013.
Many of those cases involve China. In July, the FBI launched an ambitious public awareness campaign around the issue, releasing a dramatic film depicting a Chinese company attempting to steal trade secrets from a U.S. competitor. In September, economic espionage and cyber espionage were forefront at the meeting between President Obama and Chinese President Xi Jinping, with the two leaders vowing in a landmark agreement not to target each other’s companies.
Yet a growing number of scientists have been targeted improperly as Department of Justice (DOJ) attorneys have stepped up prosecutions, advocates say. In the past year alone, charges have been dropped against five Chinese-born scientists accused of crimes related to trade secrets theft or economic spying. A sixth defendant, a New York University (NYU) medical imaging researcher accused of passing confidential information about NYU research into magnetic resonance imaging technology to a company in China, pleaded guilty to a single misdemeanor last March. In several instances, critics say, the U.S. government has charged scientists without understanding the science at the heart of its allegations.
Xi’s case is emblematic. Court documents state that “the government seized extensive electronic evidence and searched multiple hard drives” in the process of investigating him. But the prosecutors apparently did not consult technical experts before issuing the indictment, says Nelson Dong, a former DOJ official and an attorney with Dorsey & Whitney in Seattle, Washington, who was not involved in Xi’s case. “That suggests to me that people really did rush to judgment,” Dong says. “They saw red, so to speak.”
The prosecutions have spooked many Chinese-American scientists, who fear that any collaboration with Chinese nationals will invite suspicion. Invoking the botched investigation of Los Alamos National Laboratory physicist Wen Ho Lee more than a decade ago, advocacy groups are lobbying the U.S. government for explanations. Last May, following the sudden dismissal of charges against National Weather Service (NWS) hydrologist Xiafen (Sherry) Chen, who was accused of passing information about the nation’s dams to a Chinese official, 22 members of Congress signed a letter to U.S. Attorney General Loretta Lynch requesting an investigation into whether federal employees are being racially targeted. The office responded in a letter that “no policy exists of using race or any other civil rights classification” to single out federal employees for arrest or scrutiny. The attorney general’s office did not reply to interview requests.
The targeting of innocent scientists is “a constitutional and civil rights problem,” said Representative Ted Lieu (D–CA), one of the letter’s signatories, in a statement on 14 September. Xi’s crime, according to one legal blog: “Emailing while Chinese-American.”
THE THEFT OF SCIENTIFIC SECRETS is nearly as old as science itself. Centuries ago, for example, a young United States depended greatly on know-how spirited out of the United Kingdom, showering accolades on those who swiped designs for U.K. textile machinery. Imperial China was a frequent victim as well, with Western powers stealing its methods of porcelain and tea production. But some argue that the past few decades have marked the dawn of a new era, with everything from sensitive military technology to lucrative agricultural secrets now prized spoils.
“As the world becomes more advanced, technology just becomes worth more,” says Peter Toren, a former federal prosecutor and a litigator with Weisbrod Matteis & Copley in Washington, D.C., who specializes in trade secrets cases. “Developing countries and companies in developing countries can save hundreds of millions of dollars in research costs by stealing new technology.”
Developing countries are hardly the only perpetrators. In a secret report leaked by Edward Snowden, the U.S. National Security Agency outlined possible scenarios for cyber operations against foreign research centers, with the aim to capture knowledge that “would be useful to U.S. industry.” And as late as the 1990s, Toren says, France and Israel were among the world’s most prominent industrial spies.
But the U.S. government now sees China as the major foreign threat. Close to half of the indictments brought under the Economic Espionage Act since its passage in 1996 have involved China, Toren says.
In some cases, U.S. prosecutors have assembled reams of evidence. In 2010, Boeing engineer Dongfan Chung—a naturalized U.S. citizen who was born in China and grew up in Taiwan—was sentenced to 16 years in prison for stealing trade secrets connected to the U.S. Space Shuttle program and Delta IV rocket on behalf of mainland China. When agents raided Chung’s home, they found more than 250,000 sensitive documents from defense contractors, some of them hidden in crawl spaces under the house. The FBI alleged that documents in the stash showed Chung was acting at the direction of China’s Civil Aviation Administration.
Another successful prosecution came last year, when entrepreneur Walter Lian-Heen Liew was sentenced to 15 years in prison for conspiring to steal trade secrets related to titanium dioxide production from DuPont and sell them to state-owned companies in China. (Former DuPont engineer Robert Maegerle was also convicted in the case.)
But a startling number of cases have unraveled. Last December, the U.S. government dropped charges against two former Eli Lilly and Company scientists in Indiana. The U.S. attorney’s office in Indianapolis had alleged that Guoqing Cao and Shuyu Li, both naturalized U.S. citizens and senior biologists at Eli Lilly, passed research on tailored therapies for cancer and drugs to treat diabetes, obesity, and other metabolic disorders to Jiangsu Hengrui Medicine, a company in Lianyungang, China.
The case invited heated rhetoric, with a government prosecutor labeling the defendants traitors in an early bail hearing and the defense in its filings invoking the 1954 anticommunist Senate hearings convened by then-Senator Joseph McCarthy. From October 2013 to November 2014, the two scientists were variously jailed, locked down in a halfway house, and kept in round-the-clock home detention.
Yet case documents submitted by Cao’s attorneys claim that the trade secrets he allegedly stole had all appeared in published papers years earlier, and that the information did not include drug molecules, formulae, or data owned by Eli Lilly. In December 2014, several weeks after a judge agreed to release the researchers, the U.S. attorney’s office dropped the charges entirely, citing only its “on-going evaluation and assessment of this case.” A spokesperson for the U.S. attorney’s office in Indianapolis declined to comment further.
Then, last March, the U.S. government dropped charges against Chen, the NWS hydrologist. Peter Zeidenberg, a partner at Arent Fox in Washington, D.C., who represents both Chen and Xi, says that she merely sent a Chinese official—a former classmate whom she contacted as a favor to her nephew—links to publicly available websites, including www.noaa.gov. The official was tasked with planning repairs for China’s reservoirs and had asked Chen how such repairs were funded in the United States. Chen then referred the official to a division head at the Army Corps of Engineers with whom she had worked on projects in the past, Zeidenberg says. “Why would she be giving her contact in China the phone number of her boss and say, ‘Call her if you have any further questions?’ It was absurd,” he says. The National Oceanic and Atmospheric Administration declined to comment on the case, citing an ongoing internal review.
XI, NOW 57, was born in Beijing and came of age during the Cultural Revolution. As a teenager, he was sent to the countryside, where he spent several years working in the fields and shoveling pig manure. After the Cultural Revolution ended in 1976, Xi won admission to Peking University in Beijing. He went on to earn a Ph.D. before leaving for the United States in 1989. In 1995 he joined the faculty at Pennsylvania State University, University Park, where his wife, physicist Qi Li, still teaches.
Before the agents pounded on his door and turned his life upside down, Xi oversaw a team of 10 graduate students, one undergraduate, three postdocs, and two non–tenure-track faculty at Temple and received more than a million dollars a year in research funding. The group had just obtained what Xi calls “breakthrough results” on two topics that they planned to submit to Science and Nature. Xi “is among the best thin-film physicists around,” says physicist Paul Chu of the University of Houston in Texas, who submitted an affidavit in his defense. After the indictment, Temple placed Xi on administrative leave. Xi says university counsel also advised him not to appear on campus. Temple spokesperson Ray Betzner could not immediately confirm whether this was true.
According to affidavits submitted in the case, the allegations center on Xi’s collaboration with two institutes in China, the Shanghai Institute of Applied Physics and Peking University. The indictment alleged that Xi “repeatedly reproduced, sold, transferred, distributed, and otherwise shared” the STI pocket heater with these institutions and then pursued “lucrative and prestigious appointments” in exchange for his assistance. Zeidenberg says Xi never profited financially from the interactions highlighted by the U.S. government.
Rather than the pocket heater, say super-conductivity researchers who reviewed emails and other case documents, Xi discussed two distinct magnesium diboride heaters—one of which he invented himself and the other based on his invention—that are fundamentally different from the STI device. The labs he offered to help establish, meanwhile, would have focused on an entirely different line of research—oxide thin films—and thus would not have involved research with the pocket heater or another magnesium diboride heater.
The investigation’s premise is off base, Larbalestier told Science: “The whole idea that there are huge pots of money that anybody is making out of magnesium diboride is just wrong.” The compound, he says, is still in development as a superconducting material, and commercialization is “a decade or 2 decades away.” And as John Rowell of Arizona State University, Tempe, wrote in an affidavit, the STI pocket heater, itself a modification of an existing technology invented in Germany in 1993, “is in no sense a revolutionary device.”
Others say the case was based on a misreading of the scientific partnerships and teaching exchanges that have flowered since China began aggressively investing in research in the 1990s. Xi’s offer to help Chinese colleagues build a world-class lab is a common gesture in international collaborations on superconductivity, which is highly developed in China, Chu says. “Ninety percent of scientists involved in this kind of international exchange” could fit the description of Xi’s activities in China, he says.
“I am mystified as to why the case was brought,” Larbalestier says.
CRITICS of the Justice Department’s prosecutions say the government risks repeating the mistakes made in the case against Wen Ho Lee, who was charged with stealing secrets connected to the U.S. nuclear arsenal in 1999. Lee spent 9 months in solitary confinement as the case against him deteriorated. Though he ultimately pleaded guilty to one felony count of mishandling secrets, the U.S. government was never able to prove that he had conducted espionage. James Parker, the judge in the case, apologized to Lee for the “demeaning, unnecessarily punitive conditions” in which he was detained and denounced cabinet officials for having “embarrassed our entire nation and each of us who is a citizen of it.”
“Yes, America has a legitimate concern about cyber hacking and trade secrets theft,” says Brian Sun, a trial lawyer with Jones Day in Los Angeles, California, who represented Lee in a successful civil suit against the U.S. government. “But … do your homework. Get the science right before you put these people through the wringer.”
Although the charges were dismissed, Xi says that coming in the U.S. government’s cross hairs damaged his career. Before his tribulations began, he had been asked to co-author a chapter for a prestigious handbook on superconductors. After the news broke, he says, several co-authors threatened to pull out if he was kept on the project. Although his team continued its research, with other scientists assuming the principal investigator roles he had held, the lab lost critical time on projects funded by grants due for renewal. Eventually, Xi says, his department arranged for him to talk to senior colleagues via teleconferencing, but because he was forbidden to talk to potential witnesses, he did not communicate with his students. Adrift at home for 4 months, he devoted much of his time to his case.
The string of cases has Chinese-American scientists scrambling to understand how they might avoid being targeted. The Committee of 100, a group of influential Chinese-Americans whose membership includes former NASA astronaut Leroy Chiao and David Ho, scientific director of the Aaron Diamond AIDS Research Center in New York City, has held seminars across the country for scientists outlining the laws governing trade secrets theft and export controls on critical technologies and explaining how to avoid inviting suspicion. Scientists involved in collaborations with China or Chinese colleagues “need to assume that their communications are being scrutinized” and “be clear and precise about what they’re communicating,” Zeidenberg cautions. “There’s an assumption that any collaboration is suspect and potentially problematic.”
“We need a set of well-defined rules,” says Albert Chang, a physicist at Duke University in Durham, North Carolina, and the president of the International Organization of Chinese Physicists and Astronomers. “The indictments have instilled a great deal of uncertainty and anxiety in our community. People are wondering, ‘Is this going to happen to me?’” The Committee of 100 and others are pressing the U.S. government for more clarity.
Xi is now back in the lab. On 20 October, Michael Klein, dean of Temple’s College of Science and Technology, sent a memo to the physics department welcoming him back as interim chair. But he worries about obtaining research funding, regaining colleagues’ trust, and attracting collaborators: “My reputation obviously has been damaged by this,” he says. “If this happened to somebody else, I would think that they probably did do some little thing wrong, at least.” The ordeal has made him apprehensive about even the most basic of interactions. “I was charged for things that were just normal collaborations,” he says. “If all these normal activities could be seen as criminal activities, then the environment is quite frightening.”