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

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.

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”.

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, TheNew 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.

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.