House Committee on Science, Space, and Technology, “Scholars or Spies: Foreign Plots Targeting America’s Research and Development.” April 11, 2018. Unclassified.

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by  2018-04-11

SCHOLARS OR SPIES:
FOREIGN PLOTS TARGETING AMERICA’S
RESEARCH AND DEVELOPMENT
JOINT HEARING
BEFORETHE
SUBCOMMITTEE ON OVERSIGHT &
SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY
COMMITTEE ON SCIENCE, SPACE, AND
TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
APRIL 11, 2018
Serial No. 115–54
Printed for the use of the Committee on Science, Space, and Technology
(
Available via the World Wide Web: http://science.house.gov
U.S. GOVERNMENT PUBLISHING OFFICE
29–781PDF WASHINGTON : 2018
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California ZOE LOFGREN, California
MO BROOKS, Alabama DANIEL LIPINSKI, Illinois
RANDY HULTGREN, Illinois SUZANNE BONAMICI, Oregon
BILL POSEY, Florida AMI BERA, California
THOMAS MASSIE, Kentucky ELIZABETH H. ESTY, Connecticut
JIM BRIDENSTINE, Oklahoma MARC A. VEASEY, Texas
RANDY K. WEBER, Texas DONALD S. BEYER, JR., Virginia
STEPHEN KNIGHT, California JACKY ROSEN, Nevada
BRIAN BABIN, Texas JERRY MCNERNEY, California
BARBARA COMSTOCK, Virginia ED PERLMUTTER, Colorado
BARRY LOUDERMILK, Georgia PAUL TONKO, New York
RALPH LEE ABRAHAM, Louisiana BILL FOSTER, Illinois
DANIEL WEBSTER, Florida MARK TAKANO, California
JIM BANKS, Indiana COLLEEN HANABUSA, Hawaii
ANDY BIGGS, Arizona CHARLIE CRIST, Florida
ROGER W. MARSHALL, Kansas
NEAL P. DUNN, Florida
CLAY HIGGINS, Louisiana
RALPH NORMAN, South Carolina
SUBCOMMITTEE ON OVERSIGHT
RALPH LEE ABRAHAM, LOUISIANA, Chair
FRANK D. LUCAS, Oklahoma DONALD S. BEYER, Jr., Virginia
BILL POSEY, Florida JERRY MCNERNEY, California
THOMAS MASSIE, Kentucky ED PERLMUTTER, Colorado
BARRY LOUDERMILK, Georgia EDDIE BERNICE JOHNSON, Texas
ROGER W. MARSHALL, Kansas
CLAY HIGGINS, Louisiana
RALPH NORMAN, South Carolina
LAMAR S. SMITH, Texas
SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY
HON. BARBARA COMSTOCK, Virginia, Chair
FRANK D. LUCAS, Oklahoma DANIEL LIPINSKI, Illinois
RANDY HULTGREN, Illinois ELIZABETH H. ESTY, Connecticut
STEPHEN KNIGHT, California JACKY ROSEN, Nevada
RALPH LEE ABRAHAM, Louisiana SUZANNE BONAMICI, Oregon
DANIEL WEBSTER, Florida AMI BERA, California
JIM BANKS, Indiana DONALD S. BEYER, JR., Virginia
ROGER W. MARSHALL, Kansas EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
(II)
C O N T E N T S
April 11, 2018
Page
Witness List ............................................................................................................. 2
Hearing Charter ...................................................................................................... 3
Opening Statements
Statement by Representative Ralph Lee Abraham, Chairman, Subcommittee
on Oversight, Committee on Science, Space, and Technology, U.S. House
of Representatives ................................................................................................ 5
Written Statement ............................................................................................ 7
Statement by Representative Donald S. Beyer, Jr., Ranking Member, Sub-
committee on Oversight, Committee on Science, Space, and Technology,
U.S. House of Representatives ............................................................................ 9
Written Statement ............................................................................................ 11
Statement by Representative Lamar S. Smith, Chairman, Committee on
Science, Space, and Technology, U.S. House of Representatives ..................... 13
Written Statement ............................................................................................ 15
Statement by Representative Eddie Bernice Johnson, Ranking Member, Com-
mittee on Science, Space, and Technology, U.S. House of Representatives .... 17
Written Statement ............................................................................................ 18
Statement by Representative Barbara Comstock, Chairwoman, Subcommittee
on Research and Technology, Committee on Science, Space, and Technology,
U.S. House of Representatives ............................................................................ 20
Written Statement ............................................................................................ 22
Witnesses:
The Honorable Michael Wessel, Commissioner, U.S.-China Economic and Se-
curity Review Commission
Oral Statement ................................................................................................. 24
Written Statement ............................................................................................ 27
The Honorable Michelle Van Cleave, former National Counterintelligence Ex-
ecutive
Oral Statement ................................................................................................. 39
Written Statement ............................................................................................ 42
Mr. Daniel Golden, Author, Spy Schools
Oral Statement ................................................................................................. 50
Written Statement ............................................................................................ 53
Mr. Crane Hassold, Director of Threat Intelligence, PhishLabs
Oral Statement ................................................................................................. 68
Written Statement ............................................................................................ 70
Discussion ................................................................................................................. 104
Appendix I: Answers to Post-Hearing Questions
The Honorable Michael Wessel, Commissioner, U.S.-China Economic and Se-
curity Review Commission .................................................................................. 128
The Honorable Michelle Van Cleave, former National Counterintelligence Ex-
ecutive ................................................................................................................... 130
Mr. Daniel Golden, Author, Spy Schools ............................................................... 131
(III)
IV
Page
Mr. Crane Hassold, Director of Threat Intelligence, PhishLabs ......................... 132
Appendix II: Additional Material for the Record
Documents submitted by Representative Donald S. Beyer, Jr., Ranking Mem-
ber, Subcommittee on Oversight, Committee on Science, Space, and Tech-
nology, U.S. House of Representatives ............................................................... 134
SCHOLARS OR SPIES:
FOREIGN PLOTS TARGETING AMERICA’S
RESEARCH AND DEVELOPMENT
WEDNESDAY, APRIL 11, 2018
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON OVERSIGHT AND
SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY,
Washington, D.C.
The Subcommittees met, pursuant to call, at 10:01 a.m., in Room
2318 of the Rayburn House Office Building, Hon. Ralph Abraham
[Chairman of the Subcommittee on Oversight] presiding.
(1)
2
lAi\1ARS SM<TH l!''•''' EDOlF BERNICE -.>OHNSON
CH•\IRM•\N RANKi\:GME\18!:R
[:ongress of the 'llnited eStates
House of Rcprcscntatiocs
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
2321 RAYBURN HOUSE OFFICE BUILDiNG
WASHINGTON, DC 20515-6301
[phone]
Subcommittee on Oversight and Subcommittee on
Research & Technology
Scholars or Spies: Foreign Plots Targeting America's
Research ami Development
Wednesday,April11,2018
10:00 a.m.
2318 Rayburn House Office Building
Hon. Michael Wessel, Commissioner. U.S.-China Economic and Security Review
Commission
Hon. Michelle Van Cleave, former National Counterintelligence Executive
Mr. Daniel Golden, Author. Spy Schools
Mr. Crane Hassold. Director of Threat Intelligence. PhishLabs
3
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HEARING CHARTER
April!!, 2018
TO: Members, Subcommittees on Oversight and Research and Technology
FROM: Majority Staff, Committee on Science, Space, and Technology
SUBJECT: Oversight Subcommittee and Research and Technology Subcommittee joint
hearing: Scholars or Spies: Foreign Plots Targeting America's Research and
Development
The Subcommittees on Oversight and Research and Technology will hold a joint hearing
entitled Scholars or Spies: Foreign Plots Targeting America's Research and Development on
Wednesday, April 11, 2018, at l 0:00 a.m. in Room 2318 of the Rayburn House Office Building.
Hearing Purpose:
The purpose of this hearing is to explore foreign nations' exploitation of U.S. academic
institutions for the purpose of accessing and engaging in the exfiltration of valuable science and
technology (S&T) research and development (R&D). The FBI has warned the academic
community about foreign exfiltration ofS&T R&D, including that funded by the National
Science Foundation, NASA, and other federal grant-making agencies, for many years, and has
urged measures be taken to protect against this threat. 1 Witnesses will discuss the extent of the
threat and what can be done to prevent or mitigate the foreign exfiltration of S&T R&D from
U.S. academic institutions, without stifling collaborative research activities within the academic
sector.
Witness List:
• Hon. Michael Wessel, Commissioner, U.S.-China Economic and Security Review
Commission
• Hon. Michelle Van Cleave, former National Counterintelligence Executive
• Mr. Daniel Golden, Author, Spy Schools
• Mr. Crane Hassold, Director of Threat Intelligence, PhishLabs
1 See e.g., Higher Education and National Security: The Targeting ofS ensitive, Proprietmy and Classified
Information on Campuses ofH igher Education, FBI (Apr. 2011 ), https:l/www.fbi.gov/file-repositorylhigher
education-national-security.pdti'view; Counterintelligence Strategic Partnership Note: Preventing Loss ofA cademic
Research, FBI (June 20 15), https://research.umbc.edu/files/2015/07/SPIN -15-006-Preventing-Loss-of-Academic
Research.pdf; Counterintelligence Strategic Partnership Note: Chinese Talent Programs, FBI (Sept. 2015),
https://compliance.fiu.edu/documents/SPIN%20-%20Chinese%20Talent%20Program.pdf; Press Release, FBI, FBI
Director Appoints National Security Higher Education Advisory Board (Sept. 15, 2005), https://archives.fbi.govl
archives/news/pressrel!press-releases/fbi-appoints-national-security-higher-education-advisory-board.
4
Staff Contact:
For questions related to the hearing, please contact Tom Connally or Travis Voyles of the
Majority Staff at 202-225-6371.
5
Chairman ABRAHAM. Good morning. The Subcommittee on Over-
sight and Research and Technology will come to order.
Without objection, the Chair is authorized to declare recess of the
Subcommittee at any time.
This hearing will be entitled ‘‘Scholars or Spies: Foreign Plots
Targeting America’s Research and Development.’’ I’m going to rec-
ognize myself for five minutes for an opening statement.
Again, good morning. Welcome to the joint Oversight and Re-
search and Technology hearing ‘‘Scholars or Spies: Foreign Plots
Targeting America’s Research and Development.’’ This hearing is
an opportunity to address the vulnerability of U.S. academic insti-
tutions to the threat of foreign exfiltration of valuable science and
technology research and development.
Exfiltration is a new word being used to describe the surrep-
titious removal of data, as well as R&D, both of which we’ll discuss
today. We look forward to hearing from former government and
private sector experts about the magnitude and consequences of
this threat. We are also interested in learning what actions must
be taken to prevent or mitigate this threat in the future without
stifling the collaborative research activities that are critical to the
United States academic sector.
Over the past few years, case after case has been reported at our
universities and colleges, all with similar themes. After obtaining
access to data and other valuable information, individuals, includ-
ing professors, students, researchers and visitors—some with
strong ties to a foreign nation—attempt to take that knowledge to
foreign governments, universities, or companies.
As a medical doctor myself, I found one case particularly con-
cerning. A former associate professor at New York University, spe-
cializing in MRI technology, had been working on research spon-
sored by a grant from the National Institutes of Health. According
to prosecutors in the initial charges, this individual colluded with
representatives from a Chinese-sponsored research institute and
concealed the fact that he patented technology developed with NIH
funds for the purpose of licensing it to a Chinese medical imaging
company for literally millions of dollars.
This case and others demonstrate the targeting of the innovation
and intellectual property from our country’s greatest minds and in-
stitutions and, in some cases, the ability for foreign nations to gain
easy access by exploiting the lax security posture of our academic
institutions.
The Science Committee has continuously engaged in vigorous
oversight of federally funded basic research and technology, par-
ticularly research with a clear path to commercialization and a di-
rect benefit for U.S. businesses and government. A significant
amount of academic research and development is funded by the
American taxpayers. Just last year, the Federal Government spent
approximately $1.5 billion on research and development, in addi-
tion to the even larger amount of funding provided by private sec-
tor U.S. companies and universities.
If this nefarious activity is aimed at recipients of federal grant
programs, then it is the American taxpayers that are unwittingly
funding the technological advancements and innovative break-
6
throughs that allow foreign nations to improperly gain a competi-
tive economic advantage.
China has publicly proven itself to be the most aggressive in the
targeting of U.S. research over the past decade. China has heavily
invested increasing amounts of financial and physical resources to
support a science and technology industry that is based on the
transfer of basic science, which allows that country to prioritize ad-
vanced development and commercialization over basic and funda-
mental research. Essentially, China steals our fundamental re-
search and quickly capitalizes by commercializing the technology.
While much of the discussion and examples used in today’s hear-
ing may focus on China, I want to be clear that this committee is
very concerned about all foreign nations and agents that are inap-
propriately attempting to take advantage of America’s research and
development. China’s efforts in particular have provided useful ex-
amples to analyze, mainly because of their open and aggressive tac-
tics. However, the recent DOJ charges based on Iran’s actions are
further confirmation that this problem is not confined just to
China, and we should assume a number of other bad actors are
also making similar attempts.
Taking that into account, bolstering the cybersecurity of federal
information systems has been among the Committee’s top prior-
ities. I am hopeful that the discussion here today will highlight ef-
forts to accomplish this objective and make prevention a priority of
all recipients of taxpayer dollars. Whether physical or cybersecurity
threats, it is clear that our academic institutions are not taking all
the necessary steps to adequately protect this vital research.
I look forward to the insight of our witnesses today, which will
help us assess these important issues and determine whether addi-
tional questions need to be asked of our partners in the executive
branch, as well as in academia. We hope to better understand the
next steps that must be taken to safeguard the competitiveness
and security of federally funded research and development, espe-
cially the role of U.S. academic institutes.
[The prepared statement of Chairman Abraham follows:]