Espionage involving China

“Although there is evidence of potential violation of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case.”

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When the Justice Department dropped charges against a Temple University physics professor in 2015, it was an embarrassing acknowledgment that F.B.I. agents and prosecutors had misunderstood the complicated technology that they accused him of illegally sending to China.

The professor, Xi Xiaoxing, now says it was not an innocent mistake. In a federal lawsuit he filed on Wednesday, he accused the lead F.B.I. agent of falsifying the key piece of evidence and ignoring repeated warnings that he was investigating an innocent man.

The lawsuit is a sharp rejoinder to the government’s crackdown on Chinese spies, which has been undermined by a series of high-profile missteps, including Dr. Xi’s case. The Justice Department reorganized its staff in recent years to focus on preventing the theft of American trade secrets and other acts of espionage by China and other nations.

“They are paid with taxpayer money to catch spies. And they catch people like me, who have done nothing wrong,” Dr. Xi said in an interview. “I wish they’d catch more spies.”
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The F.B.I. investigated Dr. Xi as a potential spy, using orders obtained from a federal surveillance court, his lawyers said. Just after dawn one day in May 2015, agents stormed Dr. Xi’s house in the Philadelphia suburbs and arrested him.

Prosecutors ultimately presented no evidence of espionage. Instead, they accused Dr. Xi of the lesser crime of giving Chinese researchers the blueprints for a sensitive piece of laboratory equipment known as a pocket heater. The heater, which is useful in superconductor research, was covered by a nondisclosure agreement Dr. Xi had signed.

The case collapsed months later, when leading physicists testified that the blueprints at the heart of the case were not for a pocket heater after all. They instead showed a device that Dr. Xi had invented and said he shared with Chinese researchers as part of normal academic collaboration.

The Justice Department dropped the charges and has returned all the evidence it seized, his lawyers said. The underlying evidence that made agents suspicious and justified has never been made public.

Dr. Xi’s lawsuit asserts that the F.B.I. agent, Andrew Haugen, knew what the blueprints showed from the beginning. Lawyers for Dr. Xi said that an inventor of the pocket heater told Mr. Haugen that he had misread the blueprints.

“It’s like comparing a microwave to a toaster,” said David Rudovsky, one of Dr. Xi’s lawyers. “They’re completely different technologies but, well, they both warm food. It was on that level that the government got the science wrong.”

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A spokesman for the F.B.I. declined to comment on the lawsuit. Federal agents are immune from most lawsuits related to their jobs, and Mr. Haugen can argue that the lawsuit should be dismissed on that ground. Dr. Xi is suing for violations of his constitutional rights. The Supreme Court has said people can sue individual government employees like police officers and F.B.I. agents for such alleged violations.

Dr. Xi came to the United States in 1989 and is a naturalized American citizen. He has always maintained his innocence and said he knew the agents had conflated the evidence as soon as he heard it. “The very first word I said was ‘absurd,’” he recalled.

Dr. Xi said his arrest cast unwarranted suspicion over him and his work. He was suspended from his job, lost his title as the department’s interim chairman and was prohibited from entering campus or speaking with students. He said his arrest was part of a law enforcement mind-set that views Chinese-Americans as uniquely suspicious.

Prosecutors view Chinese espionage as a major threat, both to government secrets and valuable corporate information. Experts say the government in Beijing has an official policy encouraging the theft of trade secrets. Prosecutors have charged Chinese workers in the United States with stealing Boeing aircraft information, specialty seeds and even the pigment used to whiten Oreo cookie cream.

But the Justice Department has made several mistakes. In December 2014, prosecutors dropped charges against two former Eli Lilly scientists who had been accused of giving proprietary information to a Chinese drugmaker. Three months later, prosecutors dropped a case against a Chinese-American hydrologist who had been charged with secretly downloading information about dams.

Each case raised the specter of Chinese espionage without explicitly charging the suspects as spies. Because prosecutors cited routine crimes such as wire fraud, national security experts at Justice Department headquarters did not oversee the cases. Last year, the department issued new rules giving Washington greater control over such cases.

Dr. Xi returned to teaching after the case was dismissed, but he said he and his family remained in constant fear. “We always are afraid that, everything we’re doing, the F.B.I. is listening and some of the things we say or do may be twisted,” he said. “That fear is in the back of our mind all the time.”

His lawsuit does not specify how much he is seeking in damages. He said he hoped it would force the government to be more careful in future investigations. “My case has made so many scientists scared,” he said. “It has made so many Chinese-Americans and Asian-Americans scared. That’s why we are doing this. We need some accountability.”

And he said he would like an apology — for storming his house with guns drawn, handcuffing him in front of his children and casting suspicion over his life. “But I do understand,” he said, “they will probably never apologize.”

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Beijing's spy networks in the United States include up to 25,000 Chinese intelligence officers and more than 15,000 recruited agents who have stepped up offensive spying activities since 2012, according to a Chinese dissident with close ties to Beijing's military and intelligence establishment.

Guo Wengui, a billionaire businessman who broke with the regime several months ago, said in an interview that he has close ties to the Ministry of State Security (MSS), the civilian intelligence service, and the military spy service of the People's Liberation Army (PLA).

"I know the Chinese spy system very, very well," Guo said, speaking through an interpreter, in his first American interview. "I have information about very minute details about how it operates."

Guo said he learned about Chinese spy activities from Ma Jian, a former MSS vice minister, and Ji Shengde, former PLA military intelligence chief.

Ma was director of MSS's No. 8 Bureau, in charge of counterintelligence against foreign targets — including diplomats, businessmen, and reporters — until he was swept up in a Beijing power struggle in December 2015. He was expelled from the Communist Party and imprisoned in January.

Guo said Ma was imprisoned because he had uncovered details of corruption by China's highest-ranking anti-corruption official, Wang Qishan.

Ma said in a video made public by the Chinese government several weeks ago that he worked with Guo in assisting Chinese national security.

Regarding, Ji, the military spy chief, Guo said he had close ties to him and turned down requests from Ji to work as a smuggler for 2PLA, as the military spy agency was known.

Ji was implicated in the 1990s scandal involving Chinese funding of Bill Clinton's presidential re-election campaign. In China, he was given a suspended death sentence by a military court in 2000 on charges of bribery and illegal fundraising.

Ji lives in China and his wife currently resides in Los Angeles, and Guo said he paid money to Ji for 25 years as part of China's use of businesses to support intelligence activities.

"I know Ma Jian had been working state security system for over 30 years," he said. "And he was responsible for sending out spies as well as for counter espionage, also vis a vis the U.S. So, Ma Jian knows everything about the United States."

Guo is a Chinese real estate investor who fled China in 2015. He currently resides in New York City and since January has become a target of a major Chinese government campaign to silence him.

In May, two senior Chinese security officials traveled to the United States as part of a bid to pressure Guo into keeping silent, and not disclosing secrets about corruption among senior Chinese officials, as well as details of the intelligence activities.

The two officials, Sun Lijun, vice minister of the Public Security Ministry, and an aide, Liu Yanpang, also tried to convince Trump administration officials to forcibly repatriate Guo back to China amid claims of corruption.

Liu was arrested by the FBI for violating visa rules and his cell phone and laptop computer were confiscated before the Chinese official was allowed to leave the United States.

The Chinese officials, during meetings in Washington and New York and by phone, threatened Guo, his family, and business associates and said that if he remained silent, the government would release assets of Guo's that are frozen in China worth an estimated $17 billion.

Over the past several months Guo, who also uses the name Miles Kwok, began posting lengthy videos on Twitter and YouTube disclosing what he knows about Chinese corruption and intelligence activities.

One of the more explosive disclosures during an interview involve Wang, current head of the Chinese government's anti-corruption campaign and a member of the Chinese Communist Party Politburo Standing Committee, the collective dictatorship that rules China.

According to Guo, Wang secretly invested in California real estate since the late 1980s and has turned $30 million in purchases of 111 properties into an estimated $2 to $3 billion today.

Guo says he plans to detail Wang’s U.S. investments in a video to be published next week. The residences include homes and apartments in Washington and Bethesda in the east, and in California in Los Angeles, San Jose, Cupertino, Sunnyvale, Palo Alto, San Carlos, and San Francisco. The video also shows a series of mansions owned by Wang family members in Saratoga, Calif. In total the residences cost $12 million and are worth some $30 million today.

Wang, according to Guo, is the official who took over as the top leader overseeing China's financial sector from Chinese Premier Zhu Rongji, who stepped down in 2003.

One neighborhood in California of 14 houses owned by Wang or his relatives has been fitted with special underground silos that are used to store jewelry and documents, Guo said.

"If the FBI could go in there and get those documents, then they can negotiate with the Chinese government," he said.

Guo said he plans to disclose additional details of alleged corruption by four other Chinese leaders, including Meng Jianzhu, a member of the Politburo but not the Standing Committee, and He Guoqiang, a retired official who was in charge of police and the courts.

"In the future I will report on another two current sitting members of the Politburo Standing Committee, as well as two previous members of the Standing Committee," he said.

Regarding a

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in the journal Foreign Affairs that the businessman represents a leadership faction in Beijing, Guo denied the report. He said he began speaking out as part of long-planned effort to bring democratic reform to China.

"What I want to do is change the whole system. That's what I want," he said.

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Guo said Chinese police killed his brother and in 1989, when China called out troops to put down unarmed pro-democracy protesters in Beijing's Tiananmen Square, he was jailed for 22 months.

"I've prepared all that time until now," he said. "I want to change the Chinese government. Absolutely, the Chinese government is the mafia."

Guo said that Chinese intelligence operations in the United States sharply increased after the 2012 Communist Party Congress that brought current leader Xi Jinping to power.

"Before 2012, cumulatively China had around 10,000 to 20,000 agents working in the United States," he said. "These agents had been sent to work in the United States over a 50 year period of time, and they were working in a defensive mode."

According to the businessman, defensive intelligence was mainly focused on learning about the United States. The operations then shifted in 2012 to "offensive" spying, he said.

"By offensive [operations], I mean to be ready to destroy the U.S. in ways they can," Guo said.

China's budget for intelligence gathering before 2012 was around $600 million annually.

Around 2012, a decision was made by Chinese leaders to dispatch another 5,000 spies to the United States. "Some of them were sent as students, some as businessmen, and some as immigrants, but all together, 5,000," Guo said.

"In addition to that, they developed between 15,000 to 18,000 other spies, and these are not directly sent but these are developed within the United States."

The recruited agents are not limited to Asians and Chinese-Americans but include all ethnic groups, including Hispanics, Blacks, and Caucasians.

"And now the budget is between $3 billion to $4 billion annually, and this is information up to one month ago," he said.

Guo said American counterintelligence agencies face several problems, mainly a lack of knowledge about Chinese intelligence agencies.

"You don't know which organizations in China are responsible for sending these spies, how they are managed, and to what purpose," he said. "And the U.S. adopts a very legalistic perspective to look at the question of spying. Yet, for China their methods are not what the United States understands."

"These spies, when they come to the United States, they could sleep around, they could put poison in your glass of wine to kill you; completely unscrupulous," he said.

FBI spokesman Matthew Bertron declined to comment. A Chinese Embassy spokesman did not respond to emails seeking comment.

Chinese intelligence officers sent to the United States are controlled by the MSS by keeping all their family members and relatives hostage.

China's intelligence targets included several strategic areas of the United States.

"The first is to obtain military weapons-related technology. This is priority No. 1," Guo said.

Second, Chinese intelligence is engaged in "buying" senior U.S. officials personally, and a third objective is buying family members of American political or business elites "with a view to getting intelligence and to make big business deals in China's favor," he said.

A fourth priority is penetrating the American internet system and critical infrastructure by implanting malicious software.

"And they have successfully penetrated all the major defense weapons suppliers of the U.S. government," Guo said, adding that "the scale of their operations is mind boggling."

Guo said Ma, the MSS vice minister, told him that a major shift by the Chinese was expanding the scope of agent recruitment from Asians to mainstream ethnic groups.

"This is where the biggest danger lies," he said. "It's clear the situation is getting more and more dangerous now. The United States has the best weapons in its arsenal, such as laser weapons, etc. Yet, the Chinese spy system has penetrated into the bloodstream of American defense establishment with their viruses and everything else."

"The United States is bleeding and is unaware that sooner or later the United States will run out of blood," Guo said.

Also, the United States is overly reliant on technical spying while China has an asymmetrical advantage in using its tens of thousands of human spies.

China also is working to subvert the United States by working together with rogue regimes, such as those in North Korea and Iran.

"So in a fight between rogues and a gentleman, the rogues will always win," he said, "because the gentlemen fight a civilized war. The rogues do not fight a civilized war."

Guo said he first visited the United States in 1983 when he was 13 and made numerous visits since then.

"I love my nation. I love my country, but I hate the Communist Party," he said.

Guo has not defected to the United States and holds several foreign passports. His information could provide a windfall of data for the U.S. government policymakers and intelligence analysts.

For example, on North Korea, Guo said he frequently visited North Korea and has known every member of the ruling Kim Jong Un family.

"All the trade conducted between North Korea and China has been conducted by the relatives of the ruling families," he said, noting that the U.S. insistence in relying on the Chinese government to deal with North Korea is "madness."

In Hong Kong, the MSS dispatched an additional 3,000 intelligence officers to the former British colony after the May 2013 incident involving former NSA contractor Edward Snowden, who fled to Hong Kong after stealing some 1.7 million secret agency documents.

The MSS agents were dispatched by Ma Jian after the spy service learned the U.S. Consulate in Hong Kong was hosting some 2,600 American agents.

"The office they work for is the Hong Kong Security Department," Guo said, noting that before that time "it was more hit and miss approach" to spying.

"They upped that until now they have 10,000 agents operating in Hong Kong alone."

Guo said Americans need to understand that China is not ruled by a normal government.

"You should look at it as a mafia-like organization," he said.

Second, to understand China, Americans need to study the relatives of the ruling elite in China.

"Once you get to know the interests of these powerful individuals and also the family members, then you get to understand how the regime operates," he said.

Guo hopes the United States will wake up to the threat posed by China's communist system and its plans to subvert the U.S.-led international order.

"If this relationship is not managed well, I think the whole of humanity will confront major problems," he said. "The current approach adopted by the American ruling elite is tantamount to suicide."

Guo warned of the dangers of a world dominated by the current anti-democratic Chinese system.

"If we do not have the United States exercising some kind of control over the world system, the world will turn into a place where men eat men," he said.

Michelle Van Cleave, former national counterintelligence executive during the George W. Bush administration, said China has been preparing for a major escalation of espionage and influence operations against the Untied States.

"Remember their cyber theft of some 22 million personnel files from the Office of Personnel Management?" she said. "The Chinese now have a detailed roster of most if not all American contractors and government employees who have access to classified information, plus a roster of their friends, colleagues, or coworkers who may be useful conduits or potential assets in their own right."

Van Cleave said the OPM data likely will be used by Chinese intelligence to coerce, blackmail, or recruit new sources for an already extensive espionage infrastructure.

"Cyber and human espionage go hand in hand—and the Chinese excel at both," she said. "We urgently need a better understanding of what they are doing and how they are doing it—and a strategy to stop them—because China’s intelligence operations in the U.S. are poised to get much worse."

Former FBI counterspy I.C. Smith said the large number of MSS officers could be a reasonable estimate if the figure includes Chinese who work informally for the service such as students, permanent resident aliens, visitors, and others.

"China is no friend of ours and is never going to be a responsible member of the world community as long as the CCP is in power," Smith said.

"It's a reprehensible, morally and criminally corrupt police state run by a powerful elite whose every waking hour is to figure out how to capitalize on their positions and remain in power," he said.

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SinoSoldier said:

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N00813 said:

Now now don't be hasty.

Before the USA blows a billion more USD on rooting out what may turn out to be invented spies, they'd better make sure that Mr Guo, their intelligence source, is actually reliable -- that he isn't saying this to cover his ass from his Interpol arrest warrant -- and discreet, instead of blabbing it all over the news and tipping off (in the most obvious way) their adversary.

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Hendrik_2000 said:

Reading thru it sound like some one has axe to grind against CCP It is rambling of accusation with no coherent statement or logic
Nah it goes straight to waste basket. Good luck following this guy

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SinoSoldier said:

The only unconfirmed parts of Mr. Guo's claims are the numbers and figures themselves; Chinese espionage is well-known and has invoked hefty measures from the FBI in the past. Given how he has handled this so far, he should have no problem providing credible evidence once the US government guarantees protection from Chinese agents/officials.

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