Judge Acquits Nanotechnologist as Pressure Mounts on DOJ China Initiative

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Publication date: 
September 16, 2021
Number: 
83

A federal judge has acquitted nanotechnologist Anming Hu on charges that he defrauded NASA by failing to disclose contracts with a Chinese academic institution. The judge found Department of Justice prosecutors presented unconvincing evidence of malign intent, echoing broader criticisms that many DOJ ‘China Initiative’ cases are ill-founded.

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Anming Hu on campus at the University of Tennessee, Knoxville

Anming Hu on campus at the University of Tennessee, Knoxville.

(Image credit – Ivy Yang, courtesy of Anming Hu)

On Sept. 9, U.S. district court judge Thomas Varlan acquitted nanotechnologist Anming Hu on charges of wire fraud and making false statements that revolved around his nondisclosure of work with the Beijing University of Technology (BJUT). The Department of Justice had argued that the nondisclosure constituted a scheme to defraud NASA, since it might otherwise have made him ineligible for funding he received through the agency’s Jet Propulsion Lab (JPL) and Marshall Space Flight Center.

Hu’s case is one of a number DOJ has brought against scientists as part of its China Initiative that are focused solely on alleged concealment of ties to Chinese institutions. The department argues such concealment reflects a systematic effort by the Chinese government to exploit the U.S. research system, even if no outright theft or espionage is involved. However, critics of the initiative are multiplying, charging that DOJ is aggressively prosecuting individuals who have no nefarious intent and, at worst, committed minor administrative infractions.

Those criticisms are reflected in Varlan’s acquittal of Hu. After the case went to trial in June, the jury ultimately failed to reach a verdict, with two jurors unconvinced Hu acted inappropriately. To avoid a second trial, Hu requested the acquittal from Varlan, who ultimately agreed no reasonable interpretation of the evidence would conclusively support that Hu knowingly violated any disclosure requirements or that his nondisclosure involved any intent to flout NASA’s rules.

Case hinged on NASA rule barring collaboration with China

In their case against Hu, DOJ prosecutors presented two contracts with BJUT covering the years 2016 through 2021 that provided for compensation of about $4,700 per month, depending on the amount of time actually worked, with a minimum expectation of two months of work each year. A 2016 curriculum vitae obtained from Hu’s computer also listed employment with BJUT dating back to September 2013.

As evidence Hu concealed his work with BJUT, prosecutors showed that he did not list the affiliation on a CV he submitted when he was hired by his primary employer, the University of Tennessee, Knoxville (UTK), in November 2013. Nor did he list it in 2018 as part of his application for tenure at UTK, nor on UTK forms requiring disclosures of outside interests.

However, while UTK officials testified Hu would have been expected to disclose his BJUT affiliation on those documents, Varlan did not agree with prosecutors that the omissions were demonstrably a scheme to defraud and make false statements to NASA. In the case of the interest disclosure, the form itself cited “receiving payments for services exceeding $10,000” as an example of an interest requiring disclosure, plausibly suggesting lesser amounts could be excluded.

Varlan further noted that in preparing materials to apply for funding from JPL, Hu conveyed information to contacts at the lab concerning his collaborations with BJUT and China’s National Synchrotron Radiation Lab. The JPL contacts and UTK officials ultimately deleted references to Chinese institutions from the application, explaining to Hu they would fall afoul of NASA rules barring collaborations with China.

For a decade, Congress has attached a provision to NASA’s annual appropriation that bars the agency from expending funds to collaborate “with China or any Chinese-owned company” unless explicitly authorized by Congress.

JPL officials testified that they would have regarded it as problematic had they been aware Hu’s collaborations involved an employment arrangement. However, Varlan questioned whether Hu was necessarily aware of that. Varlan noted that JPL documents made no mention of China-related funding restrictions applying to universities, and that some documents from UTK and JPL included language suggesting the restriction does not apply to “faculty, staff, and students” and “fundamental research.”

Varlan also posited that Hu would not have necessarily known about a 2015 advisory notice in which NASA clarified that the restriction of cooperation with “China or any Chinese-owned company” encompasses universities because they are incorporated under Chinese laws. Varlan concluded that, given the doubt about Hu’s understanding of the restrictions, prosecutors could not prove his intent to defraud and make false statements to NASA, which is a requirement of guilt under those statutes.

Beyond the ambiguity of UTK’s and NASA’s disclosure requirements, Varlan also agreed that Hu’s behavior attested against any intent to deceive NASA. In particular, Hu’s first omission of his BJUT affiliation well predated his first application for NASA funding, and that application was originally prompted by a NASA researcher. In addition, Hu readily volunteered information about his collaborations with Chinese institutions during the application process.

Concerning the wire fraud charges specifically, Varlan also ruled that the alleged scheme was not chargeable under that statute because it did not involve any attempt to deprive NASA of something of value, since Hu did the work proposed in exchange for the funding he sought.

Prosecutors had argued that Hu deprived NASA of “research conducted by an individual who would not cause NASA to violate the China Funding Restriction.” Varlan, though, concluded that federal fraud statutes only apply to more tangible deprivations of property, citing overturned convictions involving New Jersey’s “Bridgegate” scandal and a 1997 case in which a research firm obtained a NASA contract through a corrupt arrangement.

Investigators’ understanding of research activities questioned

Critics of the China Initiative argue that, although technology theft is a legitimate national security concern, federal investigators have taken to scouring collaborations between U.S. and Chinese researchers and seized on administrative missteps in an overzealous search for malfeasance. The critics allege this strategy has unfairly targeted ethnically Chinese researchers, caused serious harm to innocent researchers, and spread fear within the research community.

In Hu’s case, Varlan noted that FBI agents began to investigate Hu in 2018 based on suspicions of economic espionage and surreptitious participation in China’s Thousand Talents Program that were ultimately deemed unfounded. Nonetheless, the investigation continued until it ultimately landed on the NASA funding restriction issue.

Varlan further reflected that the agent in charge “acknowledged that he did not have substantial experience or knowledge of the grant processes of government agencies or university conflict-of-interest policies, nor was he familiar with the ways in which universities engage with government agencies for purposes of sponsoring proposals.”

Hu was arrested in February 2020 and, as a Canadian citizen, was unable to renew his authorization to work in the U.S. Consequently, UTK fired him in October 2020.

This summer, DOJ also dropped a case against Cleveland Clinic researcher Qing Wang, who was fired the day after the FBI arrested him for allegedly concealing funding received through a Chinese talent recruitment program. Wang’s lawyer recently told the Washington Post that the funding had in fact been disclosed to the clinic and the National Institutes of Health, which was funding Wang’s research. “The information was all there. It just wasn’t where the NIH was looking,” he asserted.

Protests from research community grow sharper

This week, the American Physical Society posted a letter APS President Jim Gates recently sent to Attorney General Merrick Garland and the White House that criticizes DOJ’s China Initiative. (APS is an AIP Member Society.)

Citing cases of dropped or dismissed charges, Gates wrote,

We are witnessing reputations being tarnished and careers in ruins. Moreover, the federal government’s current response to research security concerns is negatively impacting the U.S. scientific enterprise broadly. … Some university professors are being advised by administrators to cease participating in collaborations with their counterparts from China simply to avoid the possibility of any scrutiny from federal science agencies.

Gates called for directing the China Initiative away from disclosure issues and renaming it to make it country-agnostic, noting that the limitation to China has raised concerns the initiative spurs racial profiling. Among other recommendations, he also called for the federal government to review past cases for violations of due process and to compensate for damage to careers, as well as to provide a “window” during which researchers could correct past oversights in disclosure.

Last week, 177 Stanford University faculty members listed similar grievances in an open letter to Garland, stating that “these actions do not just affect the prosecuted faculty but affect the many more university researchers who are targeted, investigated and feel threatened by inquiries initiated without prior evidence of significant wrongdoing.” The letter calls for the China Initiative to be terminated and for DOJ to develop an “alternative response to the challenges posed” by China.

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