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Chinese-born American physicist Xiaoxing Xi during a press conference in Washington, in September 2015. Picture: AFP

Spying charges against Chinese-American scientists spark fears of a witch hunt

A number of those accused have had their cases dropped abruptly, but the damage to their reputations and careers has already been done

Just after dawn on May 21, 2015, physicist Xiaoxing Xi awoke to find a dozen or so armed federal agents swarming his home in the suburbs of Philadelphia, Pennsylvania, in the United States. When he rushed to open the door, the agents drew their guns and announced that they had a warrant for his arrest. They had brought along a battering ram.

The night before, Xi’s wife had returned from a confer­ence overseas. The couple had stayed awake chatting with their daughters, planning a family outing to a popular Korean barbecue restaurant to eat fried chicken. Now his daughters – one in middle school, the other in college – watched in horror as agents handcuffed Xi, who was still not fully dressed, and escorted him away.

Then interim chairman of the physics depart­ment at Philadelphia’s Temple University, Xi is a naturalised US citizen who has lived and worked in the country 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 University’s Energy Frontier Research Center, which is funded by the US Department of Energy.

But now he stood charged with trying to transfer to China designs for a proprietary technology – specifically for a device called a pocket heater, produced by Superconductor Technologies Inc (STI) of Austin, Texas, which makes thin films of the superconductor magnesium diboride.

Xi faced 80 years in prison and a US$1 million fine.

He 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 garden. Over the months that followed, they drained their bank accounts to pay legal fees.

Citing a non-disclosure agreement that Xi had signed in 2006, to conduct research with a pocket heater, the US attorney’s office in Philadelphia 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 September 11, 2015, before a trial date had been set, the US attorney’s office abruptly dropped the charges, noting that “additional information came to the attention of the government”.

I was charged for things that were just normal collab­orations. If all these normal activities could be seen as criminal activities, then the environment is quite frightening
Xiaoxing Xi, physicist

At issue, Xi’s lawyer and scientists familiar with the case assert, was 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 American interests.

“The whole case against Xiaoxing Xi was just completely misconceived,” says David Larbalestier, a physicist at Florida State University, Tallahassee, who submitted an affidavit for his defence.

Together with cybercrime, economic espionage and the theft of trade secrets are now priorities for the Federal Bureau of Investigation (FBI). The bureau’s dedicated economic espionage unit was established in 2009. Since then the number of cases it handles – most of them involving China – has grown by an average of 18 per cent year on year. The FBI has simultaneously pursued an ambitious public awareness campaign around the issue, centred on a dramatic film depicting a Chinese company attempting to steal trade secrets from a US competitor.

In February, FBI director Christopher Wray asserted at a Senate Intelligence Committee hearing that spying by Chinese professors, scientists and students in the US constituted a “whole-of-society threat”, adding, “It’s not just in major cities; it’s in small ones as well; it’s across basically every discipline.”

US President Donald Trump, who rarely agrees with the FBI, has also highlighted intellectual property (IP) theft by China as a top concern. Last year, he directed US Trade Representative Robert Lighthizer to initiate an investigation into Chinese trade practices, including IP theft. Results of that investigation, announced in a critical, 81-page report on March 22, contri­buted to mounting trade tensions between the US and China.

Trump cited the IP violations outlined in the report as justification for US$50 billion worth of proposed tariffs on Chinese goods. China, in turn, hit back with its retaliatory tariffs on US goods. The two sides have been in trade talks in Beijing in recent days. Earlier this week, The New York Times reported that the White House was discussing measures to block Chinese citizens from undertaking sensitive research in US universities over fears they may be acquiring intellec­tual secrets, and that these might include restrictions on certain types of visa.

Yes, America has a legitimate concern about cyber hacking and trade secrets theft. But […] do your homework. Get the science right before you put these people through the wringer
Brian Sun, trial lawyer

A growing number of scientists have been targeted improperly as US Department of Justice (DOJ) lawyers have stepped up prosecutions, advocates say. Since 2014, charges have been dropped against at least five Chinese-born scientists accused of crimes related to secrets, theft or economic spying. A sixth defendant, a New York University medical-imaging researcher, accused of passing confiden­tial information about magnetic resonance imaging (MRI) technology to a company in China, pleaded guilty to a single misdemeanour. In several instances, critics say, the US government has charged scientists without under­standing the science at the heart of its allegations.

Xi’s case, which was overseen by FBI Special Agent Andrew Haugen, is emblematic. Court documents state that “the government seized extensive electronic evidence and searched multiple hard drives” in the process of inves­ti­gating Xi. But prosecutors apparently did not consult technical experts before issuing the indictment, says Nelson Dong, a former DOJ official and a lawyer, who was not involved in Xi’s case. “That suggests to me that people really did rush to judgment,” he adds. “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.

Xi with Xiafen “Sherry” Chen during a press conference in Washington, in 2015. Picture: AFP

In 2015, following the sudden dismissal of charges against National Weather Service (NWS) hydrologist Xiafen “Sherry” Chen, who had been accused of passing informa­tion about US dams to a Chinese official, 22 members of Congress signed a letter requesting an investigation into whether federal employees were 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.

But Wray’s comments in February have brought the issue back into the spotlight. On March 1, a coalition of civil society groups sent Wray a joint letter expressing their concern over his testimony and requesting a meeting to discuss the issue. After the September 11 attacks, the letter noted, FBI and law enforcement groups “reached out to Arab American and Muslim American communities to ensure everyone came together in unity”. Now, at another moment of heightened tension, the groups have urged authorities to reach out to Asian Americans.

In a recent statement, Representative Ted Lieu, a California Democrat, said Wray’s comments “feed into the false and harmful narrative that somehow Chinese-Americans are more suspicious”.

Xi’s crime was, according to one legal blog, “emailing while Chinese-American”.

The theft of scientific secrets is as old as science itself. Centuries ago, for example, a young US depended greatly on know-how spirited out of Britain, showering accolades on those who stole designs for 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 who specialises 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.”

FBI director Christopher Wray. Picture: AFP

Developing countries are hardly the only perpetrators. In a secret report leaked by Edward Snowden in 2014, the US National Security Agency outlined possible scenarios for cyber operations against foreign research centres, with the aim of capturing knowledge that “would be useful to US industry”. And as late as the 1990s, France and Israel were among the world’s most prominent industrial spies.

But the US government now sees China as the major foreign threat. Many of the indictments brought under the Economic Espionage Act since its passage, in 1996, have involved China.

In some cases, US prosecutors have assembled reams of evidence. In 2010, Boeing engineer Dongfan Chung – a naturalised American citizen who was born in mainland China and grew up in Taiwan – was sentenced to 15 years in prison for stealing trade secrets connected to the US Space Shuttle programme and Delta IV rocket on behalf of China. When agents raided Chung’s home, they found more than 250,000 sensitive documents from defence 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 in 2014, when entrepreneur Walter Lian-Heen Liew was sentenced to 15 years for conspiring to steal 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.)

Former federal prosecutor and a litigator, Peter Toren.
But a startling number of cases have unravelled. In 2014, the US government dropped charges against two former Eli Lilly scientists in Indiana. The attorney’s office in Indianapolis had alleged that Guoqing Cao and Shuyu Li, both naturalised US 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 Chinese company Jiangsu Hengrui Medicine.

The case invited heated rhetoric, with a government prosecutor labelling the defendants traitors in an early bail hearing and the defence in its filings invoking the 1954 anti-communist 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 lawyers 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, formulas or data owned by Eli Lilly. In December 2014, several weeks after a judge agreed to release the researchers, the US attorney’s office dropped the charges entirely, citing its “ongoing evaluation and assessment of this case”.

Then, in March 2015, the US government dropped charges against Chen, the NWS hydrologist. Peter Zeidenberg, a partner at law company Arent Fox in Washington, who represents both Chen and Xi, says she merely sent a Chinese official (a former classmate whom she had contacted as a favour to her nephew) links to publicly available websites, including that of the National Oceanic and Atmospheric Administration (NOAA).

The official was tasked with planning repairs for China’s reservoirs and had asked Chen how such repairs were funded in the US. Chen referred the official to a division head at the US 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 saying, ‘Call her if you have any further questions’? It was absurd,” he argues.

Chen was subsequently fired. She sued, alleging employ­ment discrimination. On April 27, a judge ruled in her favour, ordering that Chen be reinstated with back pay.

We need a set of well-defined rules. The indictments have instilled a great deal of uncertainty and anxiety in our community. People are wondering, ‘Is this going to happen to me?’
Albert Chang, physicist

Last June, prosecutors brought a case against another NOAA employee: leading climate scientist Chunzai Wang. Charged with eight felony counts, Wang was accused of accepting money from Chinese organisations in violation of US government policy. Ultimately, Wang pleaded guilty to only one count of illegally supplementing his govern­ment salary with money received from the Changjiang Scholars Program, which is overseen by China’s Ministry of Education. The other charges against him were dismissed. In February, Judge Cecilia Altonaga sentenced him to a single night in jail.

As a result of his conviction, Wang, who is a US citizen, lost the right to vote, to hold office and to possess firearms. In delivering her judgment, Altonaga said that while the scientist made mistakes, it was unfortunate that the issue had not been resolved through other means, implying that his crime was minor enough not to require a federal court hearing. “My only regret […] is that I have to adjudicate Mr Wang,” she said.

US Trade Representative Robert Lighthizer. Picture: Bloomberg

Xi, now 60, 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 shovelling pig manure. After the Cultural Revolution ended, in 1976, Xi won admission to Peking University. He went on to earn a PhD before leaving for the US in 1989.

In 1995, he joined the faculty at Pennsylvania State University, University Park campus, 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 16 students and researchers at Temple University and received more than US$1 million a year in research funding. The group had just obtained what Xi calls “breakthrough results” in two areas that they planned to submit to respected journals 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 defence. After the indictment, Temple placed Xi on administrative leave.

According to affidavits submitted in the case, the allega­tions centre on Xi’s collaboration with 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 US government.

As the world becomes more advanced, tech­nology just becomes worth more. Developing countries and companies in developing countries can save hundreds of millions of dollars in research costs by stealing new technology
Peter Toren, former federal prosecutor and litigator

Rather than the pocket heater, say superconductivity researchers who reviewed emails and other case docu­ments, Xi discussed two distinct magnesium diboride heaters – one that 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, according to Larbalestier. “The whole idea that there are huge pots of money that anybody is making out of magnesium diboride is just wrong,” he says. The compound, Larbalestier adds, is still in development as a superconducting material, and commercialisation is “a decade or two decades away”.

And as John Rowell, a research professor at 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 per cent of scientists involved in this kind of international exchange”, he adds, could fit the description of Xi’s activities in China.

“I am mystified as to why the case was brought,” Larbalestier says.

Nuclear scientist Wen Ho Lee following his release from nine months of solitary confinement, in September 2000, in New Mexico. Picture: AFP

Critics of the US 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 US nuclear arsenal in 1999. The Taiwanese-born physicist spent nine months in solitary confine­ment as the case against him deteriorated. Though he engaged in suspicious behaviour while at the Los Alamos National Laboratory, and ulti­mately pleaded guilty to one felony count of mishandling secrets, the government was never able to prove that he had conducted espionage.

James Parker, the judge in the case, apologised 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 law firm Jones Day in Los Angeles, California, who represented Lee in a successful civil suit against the 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 finding himself in the 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 four 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 members include former Nasa astronaut Leroy Chiao and David Ho, scientific director of the Aaron Diamond Aids Research Center in New York – has held seminars across the country for scientists out­lining laws governing theft of trade secrets and export controls on critical technologies and explaining how to avoid inviting suspicion.
My reputation obviously has been damaged by this. If this happened to somebody else, I would think that they probably did do some little thing wrong, at least
Xiaoxing Xi

Scientists involved in collaborations with China or Chinese colleagues “need to assume that their communi­cations are being scrutinised” 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 North Carolina, and the president of the International Organisation 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 government for more clarity.

Last year, Xi fielded a complaint against Haugen, the FBI agent who handled his case. He alleged that Haugen, along with officials at the FBI, National Security Agency and DOJ, violated his constitutional rights by having “intentionally, knowingly, and recklessly provided federal prosecutors with false scientific opinions” about his collaborations with labs in China. The behaviour was “extreme and outrageous” and led to press reports falsely portraying him as a spy, the suit continues, adding that in the raid on his house, Xi was treated like “an armed, dangerous terrorist”.

“One of Professor Xi’s greatest concerns,” says Jonathan Feinberg, one of the lawyers representing Xi in the com­plaint, “is making the point that academic collaborations are not for a sinister and unlawful purpose.”

Xi now tours the US to speak about his case. He has resumed his work at Temple University, 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,” Xi says. “If all these normal activities could be seen as criminal activities, then the environment is quite frightening.”

An earlier version of this story appeared in Science Magazine