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Universities Face Federal Crackdown on Academics With China Ties

Nov. 27, 2020, 9:01 AM

U.S. authorities are prosecuting a growing number of American professors with academic ties to China. The surge in enforcement activity is aimed at combating intellectual property theft, economic espionage, and rising Chinese influence among U.S. institutions of higher education that officials allege pose a serious national security threat to the U.S.

In May, the Department of Justice charged Dr. Simon Ang, a longtime electrical engineering professor and researcher at the University of Arkansas with wire fraud. Ang allegedly enjoyed “close ties with the Chinese government and Chinese companies, and failed to disclose those ties when required to do so in order to receive grant money from NASA,” according to a criminal complaint filed against him.

The DOJ characterized this as a “hallmark of China’s targeting of research and academic collaborations within the United States in order to obtain U.S. technology illegally.”

In a separate indictment, federal authorities brought false claims and wire fraud charges against Dr. Qing Wang, a former Cleveland Clinic Foundation researcher, in connection with more than $3.6 million in grant funding that Wang and his research group received from the National Institutes of Health. According to the criminal complaint, Wang allegedly failed to disclose he held positions at a Chinese research university and received funds for his work.

This past summer, DOJ announced multiple indictments against Dr. Charles Lieber, the former chair of Harvard University’s chemistry and chemical biology department for allegedly making false statements to federal authorities and committing tax fraud. A prominent researcher whose pioneering work in nanotechnology fueled speculation that he would win the Nobel Prize, Lieber was arrested by the FBI in January.

Federal authorities allege that the Harvard professor lied about participating in a Chinese talent recruitment program and about entering into an employment contract with a Chinese university that paid him $50,000 per month in salary, more than $150,000 in living expenses, and upwards of $1.5 million to establish a research lab at Wuhan University of Technology.

Questions Around China’s ‘Thousand Talents’ Program

All three academics participated in China’s controversial “Thousand Talents” program, established by Beijing in 2008 to recruit the world’s leading figures in research and innovation to provide their expertise back to China’s own rapidly growing knowledge economy. One of more than 200,000 programs like it, it has attracted international talent across a wide spectrum of science and technology disciplines and has successfully recruited more than 7,000 researchers and scientists, including several Nobel laureates.

Western participants like Ang, Wang, and Lieber, are drawn to the ample resources “Thousand Talents” is able to provide its members, often in sharp contrast to universities back home. Proponents of the exchange assert that it fosters cross-border academic collaboration so crucial to conducting robust and innovative scientific research.

But U.S. officials assert that Beijing’s flagship talent recruitment program was designed for another, more nefarious purpose: to misappropriate sensitive and proprietary American research and facilitate its transfer from the U.S. back to China.

From their perspective, programs such as “Thousand Talents” are vehicles for a foreign government to exercise its influence over the U.S. innovation economy and perpetrate trade secret theft and other forms of economic espionage.

The American Response

A report released last year by a high-profile Senate investigations committee concluded that recruitment programs like “Thousand Talents” are actively encouraging U.S. academics to transfer U.S. taxpayer-funded intellectual property to China, have contributed to China’s rise as a global power over the last 20 years, and constitute a serious national security threat to the U.S.

The view has garnered traction across the U.S. government. The Department of Energy, for example, has prohibited its employees from participating in any foreign talent recruitment programs. Agencies such as the Department of Defense and NIH have instituted similar restrictions.

Federal law similarly prohibits NASA from entering into collaboration or coordination with China or any Chinese-owned companies. Enforcement authorities recently unsealed several charges against a Texas A&M professor, Zhengdong Cheng, for failing to disclose extensive ties to China, including the circumstances surrounding a NASA research grant.

The DOJ expressly cited Lieber’s prosecution as consistent with its “China Initiative,” which “reflects the strategic priority of countering Chinese national security threats.” In addition to “identifying and prosecuting those engaged in trade secret theft, hacking and economic espionage, the initiative will increase efforts to protect our critical infrastructure against external threats including foreign direct investment, supply chain threats and the foreign agents seeking to influence the American public and policymakers without proper registration.”

It is important to note that none of the prosecutions have implicated the universities themselves. But as Steptoe & Johnson LLP recently observed, cases like Cheng’s “illustrate the need for U.S. institutions of higher education to understand these risks” and “implement appropriate compliance programs.”

Clear Policies Needed

Part of the challenge is that foreign talent recruitment programs often raise complex questions in connection with disclosure obligations, conflicts-of-interest issues, and foreign agent registration requirements that create a landmine of potential legal liability for participants.

Guidance can be limited and rules inconsistent. But as attorneys from Paul Hastings noted, “the frequency and intensity of the U.S. government focus [on talent recruitment programs] is unprecedented and likely only to increase.”

Given this, it is important that institutions of higher-learning enumerate clear disclosure policies and procedures for researchers governing sources of foreign collaboration and funding.

Universities should develop internal expertise or retain outside counsel to adequately understand and comply with various regulatory requirements surrounding foreign funding sources in this arena. Frequent training and refresher courses are critical toward ensuring effective ongoing compliance.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Ronak D. Desai is an international investigations, enforcement defense, and compliance attorney at Paul Hastings LLP. He is deeply experienced in conducting FCPA, white collar, and other cross-border investigations in high-risk jurisdictions, particularly in Asia. He previously served as investigative counsel to the U.S. Congress. He also serves as a legal and policy expert at the Lakshmi Mittal South Asia Institute at Harvard University.

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