Uncertain Future for China Initiative After It Closes Two Cases

Last week, the federal court in Boston dismissed the charges against Massachusetts Institute of Technology (MIT) engineering professor Gang Chen after the Department of Justice (DOJ) formally notified the court that, in light of new information, it could “no longer meet its burden of proof at trial.” The next day, the government agreed to dismiss 58 out of 59 counts against former University of Arkansas electrical engineering professor Simon Saw-Teong Ang. Ang agreed to plead guilty to one count of making a false statement to the Federal Bureau of Investigation (FBI). These resolutions may be evidence of a new approach to the China Initiative, which then-Attorney General Jeff Sessions launched in November 2018 with the objective of countering perceived Chinese national security threats. Given the mounting criticism of the China Initiative for racial profiling and the dismissal of 10 of its cases, the closure of Chen’s and Ang’s cases suggest a revamp of this Trump-era program.

Prosecutors charged Chen in early 2021 through a three-count criminal complaint. He was accused of failing to disclose his financial ties to China when applying for funding from the US Department of Energy (DOE), and failing to disclose the existence of a China-based bank account. Specifically, DOJ alleged that Chen failed to disclose, to DOE and MIT, that he served as an “overseas expert” for the Chinese government at the request of the Chinese Consulate in New York, on the advisory board of Southern University of Science and Technology, as a “review expert” for the National Natural Science Foundation of China, as a “Strategic Scientist” for a Chinese-owned enterprise, and as an advisor for the China Scholarship Council. According to the allegations, Chen accepted $19 million from DOE and other US agencies to further his research, without ever disclosing his ties. All of the charges against him have been dismissed.

Similarly, Ang was initially charged in a criminal complaint in May 2020. He subsequently was indicted in July 2020 and charged a year later in a superseding indictment with 59 counts consisting of wire fraud, passport fraud, and false statements. The government alleged that, between 2016 and 2018, Ang received funding from NASA and the US Air Force as well as from China for serving as a National Distinguished Expert for the national Thousand Talents Program, being the recipient of the Qilu Friendship Award, and serving as a “Huashan Scholar” Chair Professor of Xidian University. In addition, the government alleged that Ang was affiliated with and worked for several Chinese companies. According to the government, Ang failed to disclose these affiliations to his university employer, despite its conflict-of-interest policy, or to the funding agencies. Despite these extensive allegations, Ang ultimately pled guilty to a single false statement charge related to the FBI’s interview of him as part of its investigation. The government dismissed all of the charges related to the purported conduct that triggered the investigation, namely, misrepresentations in grant applications and conflicts of interest.

When the DOJ promoted both of these indictments in its press releases, it cast their alleged activities as “pervasive threat[s]” to national security and suggested that Chen and Ang could face significant jail time. In hindsight, this rhetoric was overblown. Despite these setbacks for the China Initiative, it is still active, though its future still remains to be seen. The China Initiative recently did lead to a jury conviction of Harvard University professor Charles Lieber for failing to disclose his financial ties with a Chinese university, but that case had particularly strong evidence. Attorney General Merrick Garland has told Congress that “China is a serious threat to our intellectual property” and “a serious threat with respect to espionage.” More recently, however, Garland has directed the head of DOJ’s National Security Division, Matthew G. Olsen, to review the China Initiative and whether a China-exclusive program is needed.

We recommend that universities that receive federal funding thoroughly review their grants applications and processes to ensure that the information being reported to the government on behalf of a professor is accurate and complete. As we previously advised, universities should review fully relevant documents (e.g., emails, payments, travel logs) to understand the facts and circumstances surrounding a professor’s relationship with a foreign country. Universities also should provide faculty and staff with training on grant application procedures and federal funding requirements. We will be following the Initiative’s actions here on Enforcement Edge. If you have questions, reach out to any of the authors or your other trusted Arnold & Porter contacts.

© Arnold & Porter Kaye Scholer LLP 2022 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.