In February of 2018, FBI Director Christopher Wray spoke to the Senate Select Committee on Intelligence about the risks posed by foreign nations, and particularly China. When asked by Senator Rubio about the “counterintelligence risk posed to U.S. national security from Chinese students,” Director Wray pointed to a “level of naivete” by the academic sector about the risks—which he explained as China’s “use of nontraditional collectors, especially in the academic setting, whether it’s professors, scientists, students, we see in almost every field office that the FBI has around the country.” Director Wray added that China is “exploiting the very open research and development environment that we have, which we all revere, but they’re taking advantage of it.” The “China threat,” stated Director Wray is “going to take a whole of society response by us.”
Following Director Wray’s comments, agencies such as the National Institutes of Health (NIH) and the National Science Foundation (NSF) have echoed similar concerns, issuing statements and new guidance regarding the obligations of NIH and NSF-sponsored grantees to disclose potential foreign influence in federally-funded research. See e.g., https://www.feldesmantucker.com/client-alert-foreign-influences-on-research-integrity-guidance-issued-by-the-national-institutes-of-health/.
This year has seen continued efforts by these agencies, and others, to crack down on failures to disclose potential foreign influence in federally-funded research.
At the same time, those of foreign origin conducting research in the United States have expressed concern about potential overreach resulting from “political rhetoric and policies that single out students and scholars of Chinese descent working in the United States as threats to U.S. national interests.”
This issue has no easy answers, as universities and government agencies wrestle with the delicate balance of rooting out theft of federal funds, as well as diversion of intellectual property to other countries, with protecting the core values and rights that are the bedrock of our nation. The incredibly important role that foreign-born scientists and researchers play in advancing science and technology in this country must also be closely guarded.
The Department of Justice (DOJ) plays a vital role in maintaining this balance. Through its civil enforcement tools such as the False Claims Act, and its criminal enforcement power, the DOJ can seek to rectify illegal theft of federal funds and improper foreign influence in federally-funded projects. The DOJ’s use of these tools in academia is not new, as it has brought a number of cases seeking to address alleged theft of federal grant funds by researchers, professors, and scientists working at universities in the United States.
Criminal charges, however, have typically been accompanied by: 1) theft by the researcher of federal funds for his or her personal use; and/or 2) theft or attempted theft of intellectual property.
For example, the DOJ brought criminal charges and a civil False Claims Act case against a professor in psychiatry who served as the principal investigator for research funded by the National Institute of Mental Health, alleging that the professor used federal research funds for personal travel to visit friends, to pay for personal lodging, bar tabs, and to travel to Chicago to see a ballet. The DOJ also brought criminal charges against a professor who received NSF funding for a highway project and allegedly diverted federal funds for his personal use.
Likewise, the DOJ has brought charges against foreign nationals for the theft or attempted theft of intellectual property. It charged two Chinese rice researchers with attempted theft of rice seeds containing proteins that could be used for medicines and pharmaceutical products, and it charged two professors who conducted federally-funded research at a university in Southern California as part of an alleged scheme to steal U.S. technology for the benefit of the People’s Republic of China.
Last week, the DOJ filed its first criminal case coming on the heels of the foreign influence concerns discussed above.
The United States Attorney’s Office for the District of Kansas brought criminal charges against an associate professor and researcher who worked at the University of Kansas in its Center for Environmentally Beneficial Catalysis, which performs federally-funded research to develop green technologies to help the chemical industry prevent waste and conserve the earth’s natural resources.
The professor, Dr. Franklin Tao, had been employed by the University of Kansas since 2014, conducting research under programs funded by the Department of Energy (DOE) and the NSF. The DOJ charged Dr. Tao with one count of wire fraud, 18 U.S.C. § 1343, and three counts of program fraud, 18 U.S.C. § 666(a)(1)(A).
The DOJ alleged that, on or about May 1, 2018, Dr. Tao signed a five-year employment contract with a talent program sponsored by the Chinese government which required Dr. Tao to be a “full time” employee at Fuzhou University, a school in China. The DOJ alleged that Dr. Tao did not disclose this employment to the University of Kansas and that he completed an online certification in the fall of 2018 stating that he understood the school’s conflicts of interest policy and agreed to secure approval (which he presumably didn’t obtain) prior to engaging in any external activities which took time away from his faculty teaching and research responsibilities at the University of Kansas. If found guilty, Dr. Tao faces up to 20 years in federal prison for wire fraud and up to 10 years in federal prison for each count of program fraud, as well as significant fines.
Since both wire fraud and program fraud require the government to establish that the defendant unlawfully took, or attempted to take, money or property, the obvious question is, what did Dr. Tao allegedly steal? Unlike the other cases discussed above, the answer found in his indictment is less than satisfying. Dr. Tao is alleged to have stolen $37,566 in salary that was paid to him by the University of Kansas using grant money received from the DOE and the NSF.
The indictment is devoid of any assertion that Dr. Tao: 1) failed to conduct the federally-funded research for which he was retained; 2) improperly diverted federal funds for his personal use; or 3) attempted to unlawfully provide any funds or property, intellectual property or otherwise, back to the Republic of China.
Perhaps there’s more to this story that we will come to learn. Perhaps not. But either way, cases like this should be watched closely to ensure that the legitimate concern about exploitation of academic research by foreign countries, including China, does not overshadow the fundamental principles of inclusion and equal justice that we hold dear.
Derek Adams, a former Trial Attorney with the Department of Justice, Civil Fraud Section, is a partner in the firm’s Litigation and Government Investigations practice group. Derek has extensive experience with False Claims Act and FIRREA matters, and can be reached at firstname.lastname@example.org or (202) 466-8960 if you have any questions.