(WATCH) Search for Spies

(Originally aired: Feb. 5, 2023)

We’ve long reported about the need to protect American technology amid Chinese efforts to steal it. But today’s cover story makes the case for the possibility that the way we’re doing it is causing more harm than good and leading to innocent scientists being charged as spies. As the Chinese proverb says, “A bad beginning makes a bad ending.”

The following is a transcript of a report from “Full Measure with Sharyl Attkisson.” Watch the video by clicking the link at the end of the page.

Physicist Xiaoxing Xi says his rude awakening came early one morning in May of 2015.

Xiaoxing Xi: These armed agents, you know, with their gun drawn and they’re running into the house and running around and yell, “FBI, FBI.” And so they ordered my wife and two daughters coming out of their bedrooms with their hands raised, and it was very, very scary.

Xi says he couldn’t imagine what he’d done wrong. At the end of a two-hour interrogation at FBI offices in Philadelphia, the agents finally answered his question about why he was arrested.

Xi: And that’s when they told me — for having made a device called a “pocket heater” for my Chinese collaborator, which was totally false, and I knew it could never, it could not possibly be true.

Sharyl: What thoughts went through your mind?

Xi: Well, the very first word I uttered was, “That’s absurd.”

The FBI accused Xi of sending colleagues in China sensitive information about a superconductor device called a “pocket heater.” Temple University removed him as chair of its physics department, and his nightmare was officially underway.

But it turns out the FBI was mixed up. Actually, Xi’s communications with his Chinese colleagues were disclosed, perfectly legal, and had nothing to do with pocket heaters.

Sharyl: Did you ever figure out how the government got confused and thought that you were working on a pocket heater instead of what you were really working on?

Xi: What we do know is that the FBI agent who investigated my case made up evidence, and he was told that I was not talking about the pocket heater before he went ahead and charged me. My legal team contacted top experts in my research field, and they provided affidavits. We gave them all my communications with my Chinese collaborators. And they look at them, and they say, “Well, all these emails are not about pocket heater. They are about the research of his own.” And so my lawyer made a presentation to the government, and then a few weeks after that, they dropped the case.

Xi is suing the government, accusing “law enforcement agents of abus[ing] the legal process by obtaining indictments and search warrants based on misrepresentations or by fabricating evidence.” The FBI denies wrongdoing.

By most accounts, the U.S. has good reason to worry about Chinese efforts to steal American intellectual property and technology, as this FBI video explains.

FBI video: Behind the scenes, it is a complex relationship where each country sees the other as a potential adversary.

It’s estimated that China is stealing up to $600 billion in U.S. trade secrets every year.

FBI video: The Chinese Communist party will pull out all the stops to obtain technology from the West, and even use members of academia to help them meet one of their top strategic goals, modernizing their military.

But Xi insists his case and others like it aren’t protecting American technology; they’re doing the opposite, having a chilling effect on foreign-born scientists who are helping the U.S. fill a critical science and technology gap.

Xi: So, you know, you’re talking about these people stealing secrets or intellectual property. These people are the people who are creating these intellectual properties. The former Secretary of Energy, Steven Chu, was saying this is not just shooting at your foot; you’re shooting at your head by driving away all these talents who are making these important discoveries and innovations.

Watchdogs say Xi’s case, where federal officials charged the wrong man and even allegedly falsified evidence, is part of a disturbing pattern of scientists racially-targeted because they’re Chinese.

Sharyl: Were you familiar with the case of Wen Ho Lee when this happened to you?

Xi: We all know of that case, yes.

Wen Ho Lee was a Chinese-American computer scientist. He was at the center of a story I broke internationally more than 20 years ago while reporting for CBS News. China had secretly obtained some of America’s most sensitive nuclear weapon secrets. The FBI wrongly blamed Lee, calling him a spy. And, as I reported, the FBI lied about Lee’s polygraph. They claimed he’d failed, when he’d passed it with flying colors. He was held in solitary confinement for nine months but never charged with spying.

After FBI misconduct was revealed, Lee pleaded guilty to just one count of mishandling data, no spy charges, and was released with an extraordinary apology. The judge said those who led Lee’s prosecution “embarrassed our entire nation and each of us who is a citizen in it.”

President Bill Clinton also questioned his justice department’s actions.

President Bill Clinton (Sept. 14, 2000): I think that it’s very difficult to reconcile the two positions, that one day he’s a terrible risk to the national security, and the next day they’re making a plea agreement for an offense far more modest than what had been alleged.

But no apologies from Attorney General Janet Reno whose department pursued the questionable prosecution.

Attorney General Janet Reno (Sept. 14, 2000): I think Dr. Lee had the opportunity from the beginning to resolve this matter, and he chose not to, and I think he must look to himself.

Lee eventually sued and won a settlement from the federal government and the New York Times, the Associated Press, the LA Times, The Washington Post, and ABC.

His daughter later spoke about the larger questions her father’s example raised.

Questioner (Dec. 4, 2000): What are the steps necessary for you or for Chinese-Americans or second-generation immigrants to deal with this problem and not to make this thing happen again?

Alberta Lee/Daughter of Wen Ho Lee (Dec. 4, 2000): I think the ideal is always that people will perceive you as an individual and not as a stereotype. But I don’t know how to combat racism. I wish I knew how.

Wen Ho Lee’s case may have faded from the headlines over the years, but a string of more recent examples raises similar questions. In 2013, two Chinese-American scientists at Eli Lilly were charged with passing valuable secrets to a Chinese drug company. A year later, charges were dropped. It turned out the information was neither secret nor proprietary.

In 2014, a Chinese-American at the National Weather Service, Sherry Chen, was arrested after she sent information to an old classmate in China. Charges were dropped after it was determined the material wasn’t secret and had been publicly available. Last November, Chen, like Wen Ho Lee, won a taxpayer-funded payment from the federal government: $1.5 million.

In 2020, the FBI arrested a Chinese-American doctor at the Cleveland Clinic for alleged improper, undisclosed research ties to China. He was fired. More than a year later, his case, also dropped.

Sharyl: And in looking at the other side, in fairness — there is a Chinese threat to our technology; I think it’s well established. How would you think it could be better balanced that the United States is vigilant in protecting its technology and its secrets, but at the same time not accusing innocent people of doing something wrong?

Xi: I want to say that the fact that the Department of Justice is spending this much resource on these innocent Chinese-American academics, the question I would ask is, are they really catching real spies, right? Are they spending taxpayers’ money responsibly in protecting our country.

Sharyl: How did this impact your life?

Xi: Oh, that’s dramatic. That’s significant. Most people do not realize that when the government charge somebody, it’s not necessarily true, right? They all assume that “the government charged somebody; this guy must have done something wrong.” So, we always carry that, you know, stigma, right? And so, we “must have done something wrong.” So that’s very damaging.

The FBI declined our interview request, but has denied racially targeting scientists of Chinese descent.

FBI Director Christopher Wray was asked about the subject at an appearance last December.

Christopher Wray/FBI Director (Dec. 2, 2022): But then sometimes there are criminal cases. You mention some that we lost, some that we dropped. There of course have been quite a few that we won as well. And I respect the decisions of juries and judges that have found against us.

Xi says he’s determined to try to help make it where other Chinese-American scientists don’t share a similar life-altering experience.

Xi: One thing is the fear that it created in our mind, right? Not only my mind; my wife, my daughters, we all learned how government can twist something, which is nothing, to charge somebody, right? Even if they are innocent.

Sharyl (on-camera): Prosecutors recently asked a judge to dismiss criminal charges against a New York City police officer and Army reservist whom the FBI had charged with being a Chinese spy in 2020.

Watch story here.