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Enforcement Edge
September 22, 2021

Engineering Professor Acquitted in Latest Setback to DOJ’s “China Initiative”

Enforcement Edge: Shining Light on Government Enforcement

A federal judge acquitted University of Tennessee, Knoxville (UTK) engineering professor Anming Hu of all charges last week in the latest blow to DOJ’s “China initiative.” Professor Hu was facing up to 20 years in prison on charges of wire fraud and making false statements on federal government paperwork in connection with several NASA research grants.

The recent government-wide China initiative aims to limit foreign influence in and access to US scientific research. The Commission on the Theft of American Intellectual Property estimates that the US loses between $225 billion and $600 billion every year to IP theft, with China as the “principal IP infringer.” Theft of trade secrets is a significant national security and economic threat and deserves a robust response. But the Hu case suggests that the DOJ initiative may be taking the wrong approach to the problem.

Researchers at US universities must comply with particularly stringent restrictions on affiliations with China to receive funding from NASA. Since 2011 the agency has been prohibited by statute from using federal funds “to develop, design, plan, promulgate, implement, or execute a bilateral policy, program, order, or contract of any kind to participate, collaborate, or coordinate bilaterally in any way with China or any Chinese-owned company” (most recently reenacted language, at H.R. 133 div. B, tit. 5, § 526(a) (2020)). NASA clarified in 2015 that “China or any Chinese-owned company” includes Chinese universities incorporated under Chinese law.

In Professor Hu’s case, DOJ alleged that Hu had violated NASA’s China restriction by failing to disclose his professorship at the Beijing University of Technology when he applied for and received funding from NASA for his research at UTK. DOJ also alleged that Professor Hu had falsely signed forms stating that he was in compliance with the restriction. NASA said that had they been aware of Hu’s affiliation with BJUT, they would have reviewed his application more closely and may not have granted him the funding.

After the high-profile case ended in a mistrial in June, DOJ stated it intended to try Hu again. But recently, Eastern District of Tennessee Judge Thomas Varlan granted Hu’s motion for an acquittal. The judge concluded that DOJ could not show Hu had actually harmed NASA or deprived it of anything of monetary value. Rather, NASA “receive[d] . . . the benefit of its bargain”: Hu fully performed his research responsibilities for NASA as described in the funding contract. The evidence also failed to show that Hu had intended to harm or deceive NASA; DOJ could not prove that Hu knew NASA’s funding restriction applied to Chinese universities since this clarification did not appear in either Hu’s contracts with NASA or UTK’s internal guidance documents. Because DOJ could not show Hu had the intent to defraud NASA, “no rational jury” could find him guilty of fraud. And because DOJ could not prove Hu knew his BJUT affiliation violated the NASA restriction, he could not be guilty of having made false statements.

DOJ’s China initiative and its prosecution of Professor Hu have drawn sharp criticism from hundreds of university researchers, education policy analysts, legislators, and law enforcement veterans. In particular, DOJ has fielded accusations of racial profiling because the majority of its foreign influence cases have targeted ethnically Chinese researchers. The nonprofit Asian Americans Advancing Justice and coauthor the Brennan Center for Justice have expressed “deep concern with the federal government’s racial, ethnic, and national origin profiling and discriminatory investigations and prosecutions of Asian Americans and Asian immigrants, harming the lives of not just individuals, their families, and communities, but eroding the health of our democracy.” A recent letter to Attorney General Garland from 90 congressional representatives likewise decried the “repeated, wrongful targeting of individuals of Asian descent for alleged espionage” and specifically cited “reports of alleged misconduct by the Federal Bureau of Investigation” in the case against Professor Hu. The “common thread” in each of DOJ’s China initiative cases, the legislators noted, is “a defendant with an Asian surname—and an innocent life that [is] turned upside down.”

Another critique of the China initiative observes that criminal prosecutions of individual Chinese researchers are an ill-suited means to address complex concerns of national security threats from China. According to some experts, these concerns are better addressed through coordination among intelligence, national-security, diplomatic, and economic stakeholders and cooperation with global allies.

At best, the China initiative has strayed from its initial focus on high-level threats from the Chinese government, with DOJ now repeatedly taking action against individual faculty members with personal ties to China based on little to no evidence of a national security threat. One juror from Hu’s trial, Wendy Chandler, stated in an interview that she was “pretty horrified by [DOJ’s] lack of evidence” against Hu; any omissions in his paperwork, she observed, amounted to no more than inadvertent “clerical errors.” Chandler has since written to Attorney General Garland to ask that he investigate DOJ’s prosecution of the UTK professor. A former federal prosecutor believes this pattern of overreaching has undermined the credibility of the entire initiative. Indeed, in July DOJ voluntarily dismissed six of its foreign-influence cases, including the high-profile investigation into Cleveland Clinic researcher Qing Wang.

A number of DOJ’s China initiative cases remain pending in various stages of investigation or prosecution. Professor Feng “Franklin” Tao’s trial is set for October 25, 2021, in Kansas; Professor Zhengdong Cheng’s is scheduled for November 30, 2021, in Texas; and Professor Saw-Teong “Simon” Ang’s for February 7, 2022, in Arkansas. The ruling in the Hu case shows critics of the China initiative are right to object to its overreach; DOJ should carefully scrutinize the facts of these pending cases to ensure that they are worthy of prosecution, and it must undertake a full review of the “China initiative” to address its flaws.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.